New Direction for Energy Independence, National Security, and Consumer Protection Act and the Renewable Energy and Energy Conservation Tax Act of 2007

Floor Speech

NEW DIRECTION FOR ENERGY INDEPENDENCE, NATIONAL SECURITY, AND CONSUMER PROTECTION ACT AND THE RENEWABLE ENERGY AND ENERGY CONSERVATION TAX ACT OF 2007 -- (Senate - April 10, 2008)

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FIRST-TIME HOMEBUYERS' TAX CREDIT

Mr. CARDIN. Mr. President, in a short while, the Senate will be voting to approve H.R. 3221, the Foreclosure Prevention Act. It is a good bill with some good provisions; namely, $10 billion for mortgage revenue bonds, $4 billion for community development block grants, and $200 million for foreclosure prevention counseling. I regret, however, that we missed two opportunities to make it even better. The first missed opportunity was our failure to adopt Senator Durbin's provision regarding bankruptcy. I am still mystified why a bankruptcy judge can reduce the principal or modify the mortgage loan terms on a vacation home but not on a primary residence. The second missed opportunity, in my estimation, was our inability to adopt an amendment Senator Ensign and I offered to establish a $7,000 nonrefundable tax credit for first-time homebuyers. I regret that the Parliamentarian ruled our amendment out of order and we never had a chance to vote on it.

The amendment Senator Ensign and I offered was timely, targeted, and temporary: eligibility for the credit would be phased out for single filers whose adjusted gross income, AGI, is between $70,000 and $90,000; for married couples filing a joint return, eligibility for the credit would be phased out if their AGI is between $110,000 and $130,000. These phase-out levels are identical to the phase-out levels contained in the District of Columbia's first-time homebuyers' tax credit. The credit would be available only for the purchase of a primary residence made within 1 year of the date of enactment.

We need to encourage prospective buyers to get off the sidelines and back into the market. An important segment of that population--39 percent nationwide--consists of first-time homebuyers. Recently, first-time homebuyers have accounted for 65 to 67 percent of sales in Baltimore.

The District of Columbia had a similar tax credit and it worked. Through the end of last year, first-time homebuyers who purchased a home in the District were eligible for a $5,000 tax credit. The credit helped 3,000 to 4,000 people become home owners each year, and it boosted buyers' interest in neighborhoods where home ownership rates lagged.

I think this amendment, if adopted, would have made a good bill better. I hope the House will incorporate a first-time homebuyers' tax credit provision in its version of this bill.

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