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NAHB sees relief in tax credit

Politico
by VICTORIA MCGRANE

The nation’s home builders are switching lobbying tacks as the industry seeks relief from the mounting housing crisis.

The National Association of Home Builders announced Wednesday that its new top priority is to secure passage of a tax credit for first-time homebuyers, worth up to $7,500, that’s part of a housing tax package approved by the House Ways and Means Committee.

After intense analysis and internal polling, the association concluded that the tax credit was the most stimulative policy option on the table, said Jerry Howard, the group’s executive vice president and chief executive officer.

“Our members overwhelmingly believe that this tax credit concept is just the ticket to get them out of the doldrums,” he said. “They’ve given us the marching orders to shift our focus.”

The decision comes after months of pursuing another policy option to help the industry through the economic slowdown — a tax provision to allow home builders and other hard-hit industries apply current losses to past tax years and claim refunds.

In early April, the Senate passed its own housing bill that included just such a “carry back” provision. It would cost $6.1 billion over 10 years.

The measure, though, drew howls from many corners. Labor unions, consumer advocates, civil rights leaders and even CNN’s Lou Dobbs complained the Senate bill was nothing but a handout to corporate interests.

On Wednesday, members of the Laborers’ International Union of North America, representing residential construction workers, protested the home builders at their conference, some dressed in pig suits to portray what they say is the group’s greed.

Howard said the harsh feedback had nothing to do with the home builders’ shift in strategy. “We’re used to the rough-and-tumble, bare-knuckles” nature of the legislative process, he said.

Moreover, he said, his group began talking about the benefits of tax credits in December, when Congress first started considering economic stimulus legislation. The issue didn’t gain any traction, but the carry back option had been used during past downturns, Howard said.

The home builders did not embrace the Senate bill’s tax credit because it would be available only to people who purchased foreclosed homes, which in their view would not stimulate the industry. So the association pushed for the carry back provision, which Sens. Max Baucus (D-Mont.) and Chuck Grassley (R-Iowa) had tried — but failed — to attach to the economic stimulus bill in February.

Then the home builders saw the bill that Ways and Means Committee Chairman Charles B. Rangel (D-N.Y.) put together. The group’s economists, and ultimately its members, decided “this is the way to go,” instead of the carry back provision, Howard said.

He said the new position had the support of a “significant” number of the association’s biggest members. In January, several of those large home builders hired an outside lobbying firm, the C2 Group, to push for the carry back provision after it failed to become part of the stimulus bill.

The home builders still support the carry back provision. It’s just no longer their top priority.

And the fact that the House provision is less controversial means it has a better chance of becoming law — even if that wasn’t a factor in the home builders’ decision making.

“It appeals to both Republicans and Democrats because it helps homebuyers,” said Scott Talbott, senior vice president of government affairs for the Financial Services Roundtable, which supports both the carry back and first-time homebuyer credits.

To view original story http://www.politico.com/news/stories/0408/9992.html

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