Senate Housing Bailout Gets Mixed Reviews

The Senate bill is heavily weighted toward tax breaks — which are not offset with corresponding spending cuts — that would cost approximately $11 billion over the next 10 years. The bill would allow property owners who do not itemize on returns to claim a deduction for their property taxes. That provision would cost $1.5 billion. It also includes language that would allow businesses to write off recent losses incurred in 2008 and 2009 over a longer period of time so they could claim greater refunds. The change would extend the write-off from two years to four years, at a cost of $6 billion. Senate Democrats originally wanted it to apply to five years as a special favor to the homebuilding industry, which has suffered massive losses in the downturn. The measure would raise the cap on mortgage revenue bonds by $10 billion so housing finance agencies could refinance subprime loans, mortgages for first-time homebuyers and multifamily rental housing. The cost of that provision is $1.7 billion.