Wednesday, November 5, 2009

U.S. Senator Johnny Isakson (R-GA)
Floor Statement on Expanding the Homebuyer Tax Credit
Remarks as Delivered on the Senate Floor

Mr. President, I rise in full support of the extension of the unemployment insurance compensation. I rise also to express my thanks to a number of people in this body.

First, as everybody knows, we adopted a substitute to the unemployment compensation bill by Senator Reid. Senator Reid, the majority leader, has been instrumental in seeing to it this bill not only passes but that enhancements are made to this bill to help the U.S. economy, and it is totally paid for and a net positive to the Federal Treasury. I appreciate more than I can express Senator Reid's hard work to help this take place.

Secondly, I thank Max BAUCUS, chairman of the Finance Committee. Senator Baucus and his staff have been unbelievably cooperative in helping us find the pay-fors to match and actually exceed the cost of the home buyers tax credit which will be extended in this legislation.

Senator Dodd, chairman of the Banking Committee, 3 weeks ago hosted a 3-hour hearing in the committee on the housing tax credit and the housing market. Without his giving us that time to bring forward the issues that are so pressing in our country today, I am not sure we would be standing here at all. So I am greatly appreciative of Senator Dodd.

I particularly thank Chris Cook on my staff for the work he has done in helping make this take place.

Lastly, but not least, I thank Mr. Richard Smith, a private citizen, a person in the housing industry who dedicated countless hours of his life in the past month to educate people on the positive effects of what we are about to do.

Briefly, I want to say the following: We learned about 8 months ago that a tax credit for first-time home buyers worked. It worked to bring back the entry level marketplace in housing, and it helped to begin to stabilize the housing market which led us in late 2007 into the difficulties we have experienced over the last 20 months. Extending it is important, as long as everybody still understands permanent extension would be bad. Extending it to next April, which this bill does, with a closing no later than June 30, allows the American housing market and first-time home buyers to exercise their right to take tax they pay, convert it to equity in the investment and net appreciating asset, and help stimulate what is the rock-solid base of the American economy.

We also add, in addition to the $8,000 credit extension for first-time home buyers, a move-up buyer tax credit of $6,500. This is the cornerstone of the substitute before us now. It offers to any previous homeowner who has lived in their home for at least the last 5 years the opportunity to sell that home, invest in a new home, and take up to a $6,500 tax credit. That is going to help us boost what is the problem in the U.S. housing economy today, and that is what is called the move-up market. It is the gentleman who is transferred from Delaware with Hercules to Brunswick, GA, who cannot sell his house in Wilmington and cannot buy a house in Brunswick because the markets are so frozen and the move-up market is dead. Now he has an opportunity to sell that house and have an incentive for its purchase in Delaware and an incentive to come and reinvest that money in Georgia in a house in Brunswick. It will make a measurable difference over the next 7 months in our economy.

We also raised the means test on income from $75,000 to $150,000, which is in the current credit, to $150,000 and $225,000 in the new bill for both move-up buyers as well as first-time home buyers. Those income thresholds will open the incentive to more Americans and I think will show a measurable increase in the amount of business that takes place.

In response to the Internal Revenue Service concerns we expressed a few months ago on fraud, we put in every single request they made for fraud to see to it the HUD-1 is attached to tax statements, to see to it there is no fraudulent claim of the money, and to see to it the IRS has every tool they can to prosecute to the fullest anybody who would abuse this credit.

Lastly, we have one exemption to the payback. As the Presiding Officer knows, the credit has to be paid back if somebody sells their house within the first 3 years of occupancy and moves. That is because they are required to own it at least 3 years. That payback is waived if they are a member of the U.S. military who has redeployed in our military in the United States or overseas. It is not right for them to respond to our country's call and then penalize them on the tax credit if they used it before by not knowing they would be called or moved again.

Again, I thank Senator Reid, Senator Baucus, and Senator Dodd for their tremendous work. I thank the Members of this body for their positive vote of 85 to 2 on cloture on Monday night and hopefully what will be a very positive vote tomorrow night to extend and pass the first-time home buyers credit and add to it the move-up buyers home credit.

I add to this list everybody who has an interest, everybody who thinks it is a great opportunity. It is a great opportunity, but it ends on April 30 for contracts and on June 30 for closing. It would not be in the best interests of the United States or this Senate to extend this credit. Part of the benefit of a tax credit is the scarcity or the urgency of its sunsetting. This tax credit will sunset on April 30, 2010, and it will not be extended. Closing will have to take place by June 30 or it will not count.

I urge all Americans who have always dreamed, if they are a first-time home buyer, of having a home of their own or Americans who have been gridlocked in the failure of our move-up market to actually move up and work, you have a 7-month opportunity that is good for you, it is good for the United States of America, and it is good for this economy.

I yield the floor by thanking all the Members of this body and urging them to vote in favor of the adoption of the substitute and ultimately on the passage of the bill.