A campaign to extend and expand the housing tax credit officially got underway on Capitol Hill last week.
Bills have now been introduced in both the Senate and the House to open up the credit, to all buyers, keep it on the books through next year, and get rid of the current income limitations.
On the House side, two Texas congressional representatives - one a Democrat, the other a Republican - have filed bills calling for a broadening of the first-time buyer credit to cover all home purchasers in the coming year, whether they already own houses or not.
Democratic Congresswoman Eddie Bernice Johnson of Dallas wants to extend the November 30 expiration date for the credit through the end of 2010. Her bill would also remove the income limits of the current program, which start phasing down the amount of the credit at $75,000 for singles and $150,000 for married couples.
Johnson's Republican colleague from the Dallas-Ft. Worth area, Kenny Marchant, also introduced a bill that would open up the credit to all buyers, without income limits, but only through June of next year.
But Congressman Marchant's bill adds a whole new element to the mix - a $3,000 tax credit for people who refinance their home loans. Why? Marchant says the idea is to encourage more people to “take advantage of (today's) low mortgage rates,” or to use the money to build equity in their homes “if they're a little underwater.”
In the Senate, Georgia Republican Johnny Isakson introduced a bill last week that would nearly double the maximum credit to $15,000, open to anyone who buys a house, regardless of income.
Isakson, who's a former realty company executive, has pushed for a $15,000 credit before - most recently during debate over the national economic stimulus package last February. Congress didn't buy it.
Meanwhile, the influential “Business Roundtable” lobby group, which represents some of the largest corporations in the country, urged Congress last week to broaden the credit to $15,000 -- along the lines suggested by Isakson.
So with the big push for a larger and longer tax credit getting underway, should potential home buyers assume these efforts are going to be successful and worth postponing a purchase?
None of the bills is likely to get much attention from the tax committees in the House or Senate until the Fall - maybe a month or two before the November 30 expiration date for the first-time buyer credit.
Although a short-term extension of the $8,000 credit is a distinct possibility, opening up the program to all buyers will be an uphill battle.
Don't count on it.