The cloture vote in the Senate on extending unemployment benefits for an additional 14 weeks in all states, and 20 weeks in states with more than 8.5% unemployment, set for last Friday didn’t happen. The vote is rescheduled for Tuesday afternoon, depending on whether or not Senators can agree on proposed amendments on extending and expanding the homebuyer tax credit in the stimulus package, and extending business loss tax carry back provisions an additional two or three years.
Present leadership plans are to pass whatever final package is approved in the Senate, and send it to the House without any conference committee, for action later this week. Senate Majority Leader Harry Reid and Senate Finance Chairman Max Baucus are proposing a one year extension of the homebuyer tax credit, to begin phasing down from the $8,000 in the stimulus package in April, 2010. Real estate and housing construction interests oppose this version of the measure, citing April through June as the best home sales months of the year. Senator Johnny Isakson of Georgia proposes a seven month extension of the full $8,000 credit to carry through the summer selling season.
National Association of Realtors President Charles McMillan says the summer months are needed to bring down housing inventories to a normal six month level. “We can achieve a consistent six month supply if the $8,000 tax credit is extended without phase outs through mid 2010. Consumers, particularly first time buyers, need certainty about the amount of the credit so that they can plan their transaction without any worry that a timing problem would penalize them,” he said in a letter to Majority Leader Reid.
The Reid/Baucus proposed amendments also include extending the tax loss carry back from two to four years, but using it only in 2008 or 2009 tax years, with a 20% reduction in the credit. Senator Jim Bunning of Kentucky wants a five year carry back, for both 2008 and 2009 losses, with no reduction, but that would involve a costly $16.3 billion revenue loss. The proposed offset to the cost of extending the tax loss carry back is a $17.1 billion revenue raiser involving a requirement that corporations report transactions with each other on 1099 forms to the government.
Finally, funding of the unemployment benefit extension is also controversial. Reid and Baucus want to extend the federal unemployment payroll tax to cover the $2.4 billion cost, while business groups and Republicans oppose extending the payroll tax, and seek instead to fund the extended benefits from unspent stimulus cash.
Present leadership plans are to pass whatever final package is approved in the Senate, and send it to the House without any conference committee, for action later this week. Senate Majority Leader Harry Reid and Senate Finance Chairman Max Baucus are proposing a one year extension of the homebuyer tax credit, to begin phasing down from the $8,000 in the stimulus package in April, 2010. Real estate and housing construction interests oppose this version of the measure, citing April through June as the best home sales months of the year. Senator Johnny Isakson of Georgia proposes a seven month extension of the full $8,000 credit to carry through the summer selling season.
National Association of Realtors President Charles McMillan says the summer months are needed to bring down housing inventories to a normal six month level. “We can achieve a consistent six month supply if the $8,000 tax credit is extended without phase outs through mid 2010. Consumers, particularly first time buyers, need certainty about the amount of the credit so that they can plan their transaction without any worry that a timing problem would penalize them,” he said in a letter to Majority Leader Reid.
The Reid/Baucus proposed amendments also include extending the tax loss carry back from two to four years, but using it only in 2008 or 2009 tax years, with a 20% reduction in the credit. Senator Jim Bunning of Kentucky wants a five year carry back, for both 2008 and 2009 losses, with no reduction, but that would involve a costly $16.3 billion revenue loss. The proposed offset to the cost of extending the tax loss carry back is a $17.1 billion revenue raiser involving a requirement that corporations report transactions with each other on 1099 forms to the government.
Finally, funding of the unemployment benefit extension is also controversial. Reid and Baucus want to extend the federal unemployment payroll tax to cover the $2.4 billion cost, while business groups and Republicans oppose extending the payroll tax, and seek instead to fund the extended benefits from unspent stimulus cash.
