The home buyer credit, extended and expanded over the last 3 years is set to expire at the end of this month with Congress still unable to approve the extension as part of HR 4213. However, recently released data for May 2010 shows worrying trends of sharply declining sales of existing and new homes. This has prompted Congress to take more action with the stalling of the HR 4123 bill in Congress, due to other provisions. As such 2 new bills have been introduced to try and extend the home buyer credit and also unemployment insurance – 2 key bills that Congress is likely to approve given their importance to their constituents. These bills are:
[APPROVED] H.R. 5623 – Homebuyers Assistance and Improvement Act of 2010. Among other items, this bill would extend the homebuyer tax credit of up to $8,000 for the purchase of a principal residence before October 1, 2010. The current benefits apply to cover buyers who enter into contracts before April 30 and close by June 30. This bill would extend the closing date to September 30, 2010.
The bill would provide any home buyer who entered into a contract on a home by April 30, 2010, but has been unable to go to closing within the required 60 days, an additional 90 days to close and qualify for the credit. This provision is estimated to cost $140 million
[Update on voting] The bill passed 409-5. It now goes to the Senate, where Senate Majority Leader Harry Reid, D-Nev., has sponsored a similar measure. The popular tax credit has helped to stabilize the nation’s slumping housing market. More than 2.6 million taxpayers claimed the tax credit through April — claiming $18.7 billion — according to the Internal Revenue Service.
[REJECTED] H.R. 5618 Restoration of Emergency Unemployment Compensation Act. This bill would provide an extension of unemployment insurance through November 2010, including 100 percent of the federal funding for the extended benefit program. The provision would preserve the 99 weeks of state and federal unemployment benefits. The bill will be declared as emergency spending and add $34 billion to the deficit. This bill does not extend the payment of the $25 per week additional payment that was provided in the “stimulus.”
The approval of these bills would be great news for many home buyers who signed a purchase agreement/contract prior to April 30th but are having difficulty closing before June 30th. and for the millions of unemployed who are set to lose their unemployment and insurance benefits at month end.
[Update on voting] The House today failed to pass this stand-alone bill to extend unemployment insurance benefits (H.R. 5618). The final vote was 261-155. 277 votes (a 2/3rds majority of those present and voting) were needed under the suspension of the rules procedure that was used by the Democrats in order to avoid Republican obstruction tactics.
Republicans opposed the bill because it’s costs, approximately $34 billion, were not offset with new revenue. Since the financial crisis of 2008, Congress has routinely passed UI extension bills without offsets because benefit payments to help the unemployed are considered “emergency spending” and are not subject to pay-as-you-go rules.
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Related posts:
- Extra COBRA Unemployment Benefits and Home Buyer Tax Credit Extension into 2010
- Possible September 2010 Extension to Home Buyer Credit as Builders and Home Owners Struggle to Complete Home Transactions by June 30 2010 Tax Credit Deadline
- Unemployment Benefits Extension For 2010 Passed by Congress. Tier 5 Not Approved.