House Crafting Housing Bill Aimed at Individuals

WASHINGTON — House Democrats, opposed to the Senate's focus on helping home builders, moved Tuesday to reshape housing legislation to help more homeowners.

"We need to provide relief to the buyers and families themselves, not just the banks and builders," Rep. Charles Rangel, D-N.Y., said in a statement. House Democrats intend to put "families first," he said.

On Wednesday, Rangel's Ways and Means Committee will vote on his legislation to provide tax breaks to homeowners, first-time home buyers and developers of low-income housing.

In contrast to the Senate, Rangel will not offer about $25 billion in tax breaks to home builders and bankers.

Also Wednesday, House Financial Services Committee Chairman Barney Frank, D-Mass., will hold a hearing on his bill to provide $300 billion for federal guarantees of mortgages for troubled borrowers if lenders make them more affordable.

Rangel said he designed his bill to "complement" Frank's legislation. The House's Democratic leadership could combine the two into a single package for a House floor vote.

Rangel's bill was introduced even as more bad sales news was released by the National Association of Realtors. The group said its index of pending sales of existing homes dropped to 84.6 in February from the previous month's revised 86.2. This measure of housing market activity was the lowest since the index began at 100 in 2001.

Meanwhile, the Senate is swiftly moving toward a vote on its version of housing legislation. The Senate emphasizes tax breaks for home builders, lenders and other money-losing businesses.

On Tuesday afternoon, the Senate voted 92-6 to limit debate on that package, setting the stage for a Wednesday vote.

While, all six "no" votes came from Republicans, the vast majority of their colleagues backed the bill. So it came as something of a surprise when the White House offered a negative assessment of the Senate bill.

At a news briefing, White House press secretary Dana Perino said elements of the Senate legislation would "likely do more harm than good by bailing out lenders and speculators and passing on costs to other Americans who play by the rules and honor their mortgage debt obligations."

Senate Banking Committee Chairman Chris Dodd, D-Conn., and the committee's top Republican, Richard Shelby of Alabama, wrote the package. Its centerpiece is a "carryback" provision that lets businesses increase to four years, from two, the time they could apply losses suffered in 2008 and 2009 to past tax bills. That would help builders offset profits made during boom times with their recent losses.

The Senate, at the prodding of Sen. Johnny Isakson, R-Ga., also included a provision creating a tax credit of up to $7,000 over two years for people who buy foreclosed homes.

The House measure does not include the carryback breaks and scratches Isakson's tax credit plan. Instead, it would create a temporary tax credit of as much as $8,000 for first-time buyers, and increase the availability of tax credits for investors in low-income housing.

In an e-mail, Isakson defended his plan, saying he wants "qualified buyers to get off the sidelines" and start buying homes in foreclosure. "I hope the House leaders will reconsider their exclusion of the tax credit to get foreclosed homes off the market," he wrote.

Rangel's bill is similar to the Senate's in that it would create a standard deduction for property taxes, which would help more than 28 million homeowners who do not itemize on their federal tax returns. And like the Senate, it would expand the authority of state and local housing finance agencies to use tax-exempt bonds to help refinance mortgages.

Rangel said he would include ways to offset the cost of his legislation, which would be about $11 billion over the coming decade. Together, the Rangel and Frank packages represent Congress's most dramatic effort to respond to the nation's housing sector meltdown.

The Senate Banking Committee is working on a bill similar to Frank's FHA legislation.

No matter what legislation each chamber passes, the House and Senate will ultimately have to agree on a single package, which can be sent to President Bush for his signature. Democrats in both chambers say they are determined to find common ground to pass legislation this spring.

Jim Manley, spokesman for Senate Majority Leader Harry Reid, released a statement condemning the White House for offering excuses to "do nothing to help the thousands of American families facing foreclosure each day."