Washington Update - 04/04/2008 (Plain Text Version)

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Senate Housing Bill Contains Builder Priorities

NAHB’s intensive long-term lobbying efforts paid dividends when the Senate this week unveiled its bipartisan blueprint for housing legislation that includes several NAHB priorities:

FHA modernization. The maximum FHA-insured loan would increase to 110 percent of a region’s median home price, up to a maximum of $550,000; the current limit is 95 percent of a region’s median home price, up to $362,000. The minimum downpayment requirement for such a loan would be 3.5 percent.
Home-buying tax credit. Home buyers would receive a $7,000 tax credit spread out over two years for purchasing homes in foreclosure or when foreclosure proceedings have begun.
Net operating loss (NOL) carryback. Businesses that lose money in 2008 and 2009 would be able to use those losses to offset taxes they paid for the previous four years, compared with the two-year carryback allowed under current law.
Mortgage revenue bonds. States would be provided new authority to issue $10 billion bonds to be used to refinance subprime loans, mortgages for first-time home buyers and multifamily rental housing.

In addition, the legislation, entitled the Foreclosure Prevention Act of 2008, would also:

Provide local governments with $4 billion in Community Development Block Grants, which could be used to purchase and rehabilitate foreclosed properties.
Allow home owners who do not itemize their taxes to deduct up to $500 ($1,000 for married couples filing jointly) worth of property taxes.
Provide $100 million in additional funding for housing counseling for mortgage borrowers at risk of default.
Give soldiers returning from service more time before lenders can start foreclosure proceedings and also increases the VA loan guarantee amount.

This bill is an important first step in the process to enacting comprehensive housing legislation that will shore up our industry and the economy. It is anticipated that the Senate could hold a final vote on this measure as early as next week.

Meanwhile, House leaders are signaling tentative signs of support for the Senate measure but also indicating that changes will have to be made as they work to prepare their own housing fix. For example, House Financial Services Committee Chairman Barney Frank (D-Mass.) has said that he wants to go further to overhaul FHA and plans to hold hearings on his foreclosure bill next week. The House Ways and Means Committee is also expected to unveil housing-related tax legislation next week. NAHB is working closely with the House to ensure NAHB's priorities are included in the bill.

As the legislative process moves ahead, NAHB will continue to work on a bipartisan basis with lawmakers in both chambers with the goal of enacting the best legislation that will jump-start housing and keep the economy moving forward -- including a more robust home buyer tax credit with broader applications.

After the Senate bill was introduced, NAHB sent a letter to Majority Leader Harry Reid (D-Nev.) and Minority Leader Mitch McConnell (R-Ky.) praising the Senate for moving forward on this carefully crafted compromise. NAHB urged Senators to oppose amendments that could unravel the bipartisan agreement, such as one put forth by Sen. Richard Durbin (D-Ill.) that would alter how primary residency mortgages are treated during bankruptcy. A follow-up letter was sent to every Senator opposing the Durbin amendment and designating it as a “key vote” because of the potential of this amendment to cause renewed turmoil in the credit markets. In a victory for NAHB, the Durbin amendment was subsequently tabled on a 58-36 vote.

NAHB is currently tracking several amendments that may be voted on next week in the Senate. Of particular interest are amendments to expand the home buyer tax credit, attach the House-passed GSE reform bill and strike the NOL provisions.

A letter was also sent to the Senate leadership refuting accusations by the Laborers International Union of North America (LiUNA) that the net operating loss carryback provision was a bailout for the housing industry. LiUNA had distributed a document on Capitol Hill entitled, A Multi-billion Dollar Bailout for Those at Fault: Corporate Homebuilders, the Housing Crash and the Mortgage Crisis. NAHB noted that NOL is a “well-accepted economic stimulus proposal for responding to economic crises … and “is critical to helping home builders of all sizes to weather this economic storm.” The NAHB letter went on to rebut point-by-point every allegation made in the LiUNA document.

On the Public Affairs front, NAHB CEO Jerry Howard embarked on a financial media tour in New York earlier this week to discuss NAHB’s housing priorities and policy initiatives being debated on Capitol Hill. Howard did a live studio interview on CNBC’s Closing Bell with Maria Bartiromo and was also interviewed by the LA Times, CQ, AP, Bloomberg, CNN Money and Politico.

After the Senate plan was unveiled, Howard provided NAHB’s perspective on the legislation in interviews with Bloomberg TV, CNN, AP, Roll Call, Nightly Business Report, CNN Money and Builder magazine. In addition, NAHB Chief Economist Dave Seiders also discussed the Senate housing bill on CNBC’s Closing Bell.

Continuing our ongoing ad campaign calling on Congress to move quickly to jump-start housing and the economy, NAHB ran an ad in the March 29 issue of the National Journal urging lawmakers to “act now to break the downward spiral in the housing market before it is too late.” The ad will also run in the April 5 edition.

For more information on the Senate housing bill, contact Greg Brown at 800-368-5242, x8421. To learn more about the Durbin bankruptcy bill, contact J.P. Delmore at x8412.

Bipartisan Small Business Health Insurance Bill Introduced

This week a bipartisan group of U.S. senators, including Majority Whip Dick Durbin (D-Ill.), Olympia Snowe (R-Maine), Blanche Lincoln (D-Ark.) and Norm Coleman (R-Minn), proposed legislation designed to make insurance more available and affordable for the 47.1 million employees of the nation’s 5.8 million small businesses. The bill, S. 2795, would address the top problem for many small businesses and the self-employed -- the high cost of providing health care for their employees. The legislation would:

Allow small businesses to band together and spread the risk over a large number of participants in order to obtain lower premiums.
Provide tax credits for small business owners to offset contributions to employee premiums.
Ban the ratings of patients' health status in order to protect businesses from large rate increases simply because one employee gets sick.

For more information, contact Erin Tario at 800-368-5242, x8413. [return to top]

Senate Panel Holds Hearing on OSHA Violations

On April 1, the Employment and Workplace Safety Subcommittee of Senate Health, Education, Labor Committee held a hearing titled,“Serious OSHA Violations: Strategies for Breaking Dangerous Patterns.” The hearing focused on the need for upper management to make safety a priority in the workplace and to increase efforts to fully integrate OSHA standards and other requirements to ensure a safe working environment. Senators agreed that OSHA violations should be addressed on a broad-based approach and patterns of violations across companies and industries should be recognized and fixed on a wide scale. While the poultry industry was specifically highlighted, Senator Ted Kennedy (D-Mass.) pointed to the construction industry, stating “similar willful neglect by OSHA affects the construction industry. The safety of thousands of construction workers is jeopardized every year by unsafe ladders and scaffolds.” For more information, contact Erin Tario at 800-368-5242, x8413. [return to top]