Washington Update - 04/11/2008 (Plain Text Version)

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Housing Stimulus Clears Senate, Advances in House

In an important victory for NAHB, the Senate this week passed its housing bill (H.R. 3221), the Foreclosure Prevention Act of 2008, and the House Ways and Means Committee approved H.R. 5720, the Housing Assistance Act of 2008. Both bills include NAHB priorities that would put in place important tools to address the nation’s housing crisis. The Senate bill would modernize the FHA, create a temporary home buyer tax credit for purchasers of foreclosed homes, allow businesses to carry back net operating losses for four years and expand the mortgage revenue bond program.

The House bill would create a temporary first-time home buyer tax credit up to $7,500 for the purchase of ANY home, subject to certain income limits. In a victory for NAHB, an amendment passed to raise the income limit to $140,000 for married couples, up from $110,000 (the full amount of the credit is available for singles who earn less than $70,000 annually, after which it phases out). The legislation would also make significant enhancements to the Low Income Housing Tax Credit and tax-exempt housing bond programs. This would help to maximize their effectiveness and enable builders to better develop and deliver affordable housing. Like the Senate bill, the House bill would also provide for a temporary increase in state mortgage revenue bond authority and provide tax relief for home owners who do not itemize their deductions.

As the Senate debated its housing bill, NAHB sent a letter to every senator urging them to invoke cloture to move the bill forward. NAHB designated the cloture vote as a “key vote” because of “the importance of this legislation to help relieve the current crisis in the U.S. housing market.” In a victory for NAHB, the Senate overwhelmingly voted 92-6 to limit debate on the package. NAHB was also victorious on other key vote letters regarding the Senate bill:

1. An amendment put forth by Sen. John Ensign (R-Nev.) that would extend for one year a number of critical energy efficiency incentives, including the new home energy tax credit, was adopted by a vote of 88-8. The extension includes several programmatic changes that NAHB has been seeking to make the credit more usable for our members.

2. Sen. Richard Durbin’s (D-Ill.) amendment to change bankruptcy provisions for primary residences was tabled (defeated) on a 58-36 vote.

3. NAHB designated passage of Senate bill H.R. 3221 as a key vote. The bill was approved by a strong bipartisan margin of 84-12.

In addition, NAHB sent a letter to every member of the House Ways and Means Committee urging passage of H.R. 5720. The bill was subsequently approved on a bipartisan vote of 35-5. While timing for the House floor action is unclear, the tax portion will likely be combined with the bill that comes out of the House Financial Services Committee (see story below), perhaps by the end of the month. Following House action, the two chambers will go to conference to reconcile their bills. NAHB will continue to work on a bipartisan basis to develop the most effective housing stimulus bill possible.

Media Push Complements Lobbying Efforts

In the days and hours leading up to the Senate vote, NAHB blanketed the media to get our message out. NAHB CEO Jerry Howard did a live interview with CNBC and a taped report with the Washington, D.C. FOX News affiliate on the state of the housing market and the Senate housing bill. Howard also did interviews with Reuters, Dow Jones and USA Today on the pending Senate legislation. In addition, NAHB Executive VP Bill Killmer was interviewed by AP on the same topic and NAHB tax economist Rob Dietz provided a background interview to The Washington Post on the relevant tax provisions in the Senate bill.

In a point-counterpoint, NAHB squared off with USA Today in the paper’s editorial section on April 10 -- the day of the Senate vote -- on the importance of the net operating loss carryback provision in the Senate housing bill. The headline under NAHB’s viewpoint read: “Keep Builders in Business. ‘Carryback’ tax provision would save residential construction jobs.”

Following passage of the Senate bill, NAHB issued a press release in support of the measure and the legislation that cleared the House Ways and Means Committee.

FInally, NAHB prepared a new ad to run in the April 12 issue of National Journal. The copy reads: “Housing is the key to unlocking today’s stalled economy. That’s the message that home builders will be delivering to members of Congress during NAHB’s Legislative Conference on April 30.”

For more information on the House and Senate housing stimulus bills, contact Greg Brown at 800-368-5242, x8421.

Frank, Dodd Hold Hearings on Respective Foreclosure Plans

House Financial Services Committee Chairman Barney Frank (D-Mass.) held a two-day hearing this week on his plan to allow the FHA to insure up to $300 billion worth of refinanced loans. During the first day of the hearing, FHA Commissioner Brian Montgomery announced a new plan for his agency to provide added flexibility to insure more mortgages under expansion of the FHASecure program. Montgomery said the program would encourage lenders to erase some of a failing loan amount in order to receive a government guarantee of timely payments. The Administration said the expanded program will help 500,000 borrowers by the end of the year.

Frank’s plan would put more federal money into the program and is projected to help 1 million to 2 million home owners. It is anticipated that Frank’s foreclosure bill will be voted on in committee during the week of April 21. At this time, it is uncertain whether this measure will ultimately end up as a stand-alone bill or be combined with tax-related housing legislation that passed the House Ways and Means Committee.

Meanwhile, Senate Banking Committee Chairman Chris Dodd (D-Conn.) who has offered a similar proposal to Frank’s, convened a hearing on his plan that would create a new initiative within the FHA to refinance mortgages of distressed home owners.

For more information on the House and Senate foreclosure bills, contact Scott Meyer at 800-368-5242, x8144. [return to top]

Senate Panel Holds Hearing on Clean Water Act

The Senate Environment and Public Works Committee held a legislative hearing on April 9 entitled “S. 1870, the Clean Water Restoration Act of 2007.” S. 1870 was introduced by Senator Russ Feingold (D-Wis.) with a companion bill, H.R. 2421, sponsored in the House by Rep. Jim Oberstar (D-Minn.). Over the past year, NAHB has worked to derail these bills, which seek to greatly expand the scope of the Clean Water Act (“CWA”) by removing the word “navigable” from the CWA and adding an expansive definition of “waters of the United States.” These drastic changes would result in an exponential permit increase for builders.

This hearing was a follow-up to one held in December where NAHB was able to work with the Senate EPW Committee to secure an NAHB witness on the panel. Duane Desiderio, Staff Vice President for Legal Affairs at NAHB, joined four other panelists to discuss the state of law since the Clean Water Act was passed in 1972. Through Desiderio’s testimony at the December hearing and NAHB’s written testimony submitted for the April 9th hearing, NAHB has emphasized that such an expansion of the CWA would have a detrimental effect on the home building industry. NAHB has grave concerns with any legislation that would tax the home building industry, especially during this economic downturn. Overall, the comprehensive information NAHB provided to the EPW Committee leaves the association well-positioned when additional hearings will be held later this year in both the House and the Senate. For more information, contact Annie Raymond at 800-368-5242, x8307. [return to top]