Senate Unanimously Approves Isakson Amendment to Stimulate Housing Market

Note: The most important statement in this release is the very last one (in bold, my emphasis). We need to burn up the phone lines, keep the fax machines in full gear and keep those emails zipping into his inbox. Please join in the effort to kill this bill. - jmd

The U.S. Senate today unanimously approved an amendment by U.S. Senator Johnny Isakson, R-Ga., to stimulate the nation’s declining housing market by offering a $15,000 tax credit to individuals who purchase a home in the next year.

“It is time to fix America’s problem, not throw money at the symptoms. It is time to fix housing first. It is rare that we have a road map to success in times of difficulty, but this country has once before realized a housing crisis every bit as bad as the one we have today and economic troubles every bit as dangerous,” Isakson said. “We have a pervasive housing problem, and we have a historical precedent that works. I am proud this Senate has joined together, learned from history and repeated a method that worked by adopting this amendment.”

Specifically, Isakson’s amendment to the pending economic stimulus bill would provide a direct tax credit to any homebuyer who purchases any home. The amount of the tax credit would be $15,000 or 10 percent of the purchase price, whichever is less. Purchases must be made within one year of the legislation’s enactment, and the tax credit would not have to be repaid.

The amendment would allow taxpayers to claim the credit on their 2008 income tax return. It also seeks to prevent misuse by only allowing purchases of a principle residence and by recapturing the credit if the home is sold within two years of purchase. The amendment would sunset the current $7,500 housing tax credit on the date of enactment.

Isakson has pushed hard for a non-repayable tax credit for homebuyers because he knows that it will work. In the mid-1970s, America faced a similar housing crisis when a period of easy credit and loose underwriting flooded the market with new construction. Interest rates rose, the economy slowed and America was left with a three-year supply of vacant homes. Congress responded by passing a $2,000 tax credit for anyone purchasing a new home for their principal residence. Isakson believes the results were clear and swift as home values stabilized, housing inventory dropped and the market recovered.

Last year, Isakson introduced legislation to specifically target those homes that were causing the unprecedented increase in housing inventory by offering tax credits to individuals purchasing a foreclosed home or a home where foreclosure is pending. In April 2008, the Senate passed legislation to stimulate the nation’s declining housing market that included Isakson’s proposal. However, the final version of the legislation that was signed into law included only a $7,500 tax credit for first-time homebuyers that must be repaid over a 15-year period. Isakson’s amendment that passed today would sunset that $7,500 tax credit.

Isakson spent more than three decades in the real estate business, beginning his business career in 1967 when he opened the first Cobb County, Ga., office of a small, family-owned real estate business, Northside Realty. Isakson later served as president of Northside for 20 years, presiding over the company’s growth into the largest independent residential real estate brokerage company in the Southeast and one of the largest in America.

Isakson has not made a decision regarding his vote on the overall economic stimulus legislation.

Johnny Isakson's response to my email to vote NO on porkulus

I sent an email with thoughts on the "stimulus". Strip it of every bit of pork that can be negotiated out of it, then when it's as thin as possible, vote no anyway. I phrased it better than that... It's definitely a form letter, didn't expect anything more. I didn't suggest any projects as the form letter indicates.

Since I sent me email a lot has happened and things are changing minute-by-minute in Washington. I've read conflicting stories about what's going on behind the scenes so I'm in a wait-and-see mode (although I'm still sending emails and calling Senators).

One good thing that's happening is that more and more people are becoming aware of how little there is in this pork package that will do anything to help us.

I think Nancy Pelosi is going to ultimately be the fall 'guy' on this one. She was SO gleeful when she rammed it through. I was watching as she took the count and they zeroed in on her face. She was gloating, smiling so big I thought her face would crack from the tension. Now she's dealing with dissension in the ranks, possibly an Obama White House that isn't happy with her and a Senate that is busily stripping her Christmas list of wants out of the bill. (see my last post)

OK, I'll quit typing and let you read Isakson's letter (emphasis is mine):

Thank you for contacting me regarding President Obama's Economic Stimulus plan. I appreciate your thoughts and the opportunity to respond.

Recently President Obama has been meeting with Majority Leader Harry Reid and Speaker Nancy Pelosi regarding his ideas for a second economic stimulus. At this time I am unsure as to whether I will or will not support this legislation due to the fact that there is no bill text to evaluate at this point, only constantly changing news reports. My staff and I, however, are glad to hear your thoughts on suggested projects that you believe should be included in this proposed plan. Rest assured I will strongly advocate on the behalf of Georgia projects for maximum investment.

As our nation continues to struggle through the current economic crisis it is important to stay focused on the recovery aspects. I believe the key to returning stability to the economy lies within the housing market. We must find a way to keep people in their homes, stabilize foreclosures and return consumer confidence to the marketplace. Once stability comes back to the housing market, you will see investors and small business begin to reinvesting in job creating activities, which will put hard working Americans back to work. I am committed to taking the necessary steps to work with my Senate colleagues to make this come to pass. Our nation has always demonstrated a strong resiliency and I am confident we will once again bounce back stronger than ever, where hard working Americans are at the front lines of economic prosperity.

Thank you again for contacting me. Please visit my webpage at http://isakson.senate.gov/ for more information on the issues important to you and to sign up for my e-newsletter

Presidential Line-item veto?

Giving the release posted below a quick glance caused me to do a double-take. Giving the President line-item veto power is something that is talked about often enough, but rarely does anyone attempt to do anything about it in Congress.

It takes away some of their power for one thing. It also puts the President in play as they bargain and cajole.

All those extras that are attached to bills aren't done simply to sneak something through. They are bargaining chips.

Let's say the Democratic party wants a bill of some sort pushed through but they need 20 more votes. Whoever wants the bill goes to those opposed and those who are on the fence and starts working on them.

"What's it going to take to get you to vote yes on this bill?"
"Well, I'm thinking you need to change this little bit here and it might be easier to swallow."
"Darn, that's one that we've already discussed and we can't budge on that."
"Hmm, let's see. Did I tell you about that bridge I wanted for my constituents? The company that will build it made some huge donations to my campaign."

Yeah, that last bit about the donation to the campaign isn't something I'd expect any of them to verbalize... but we all believe that payback is part of it, don't we?

I'm sure there are many other things in play when it comes to all those "extras" that get tagged onto the end of the bills that slide through. I would imagine they might also be used as a reward for someone who's toeing the party line, or as a help for someone in a tight race needing to bring home some pork.

Give the President line-item veto power and he gets to play in the game, too. Plus, he looks good doing it, too, as he can say he's just saving the tax payers money.

As I've written in previous blogs, neither Party wants to take a chance that a President from the other Party would have line-item veto power. Thus, the bill proposed below really surprised me. My first thought was this might have a chance of sliding through as it's the END of the President's term and the Democrats are probably thinking they've got a good shot at taking the Presidency. It was proposed by a Republican, too!

Then I read the release through to the end. There's a line in there that seems to nullify the idea of a Presidential line-item veto. AFTER he uses his red pen, it then has to be affirmed by Congress. Can you see the cat fights coming? Can you see the extra time it will take to get a bill through? Can you see any real chance of it working any differently than it does now?

I'm going to have to think on this one more and watch to see what happens as it goes forward. I can see that this would give the President more yelling power. He'd be able to bring attention to some of the pork. He'd also be on the line when he DIDN'T call attention to certain additions.

I like a lot of what Isakson is proposing, it's broader than just line-item veto power for the President.

I'm going to read the following release again and maybe, if time permits, I'll go pull up a copy of the proposal in its entirety and see if I can make some sense of it!

Isakson Co-Sponsors Constitutional Amendment to Give President Line-Item Veto Power
1/24/08 U.S. Senator Johnny Isakson, R-Ga., today announced that he is co-sponsoring a constitutional amendment that would allow the President to use the line-item veto to either eliminate or reduce appropriations in any bill passed by the Congress.

“We must take bold and immediate steps to end the reckless spending that is threatening the future of our nation,” Isakson said. “This amendment will give the President much-needed authority to remove items from appropriations bills that are considered wasteful on a national perspective.”

Isakson noted that governors in 43 states – including Georgia – have line-item veto authority.

Congress passed a line-item veto bill in 1996, but the U.S. Supreme Court ruled it unconstitutional. The 1996 bill allowed the president to cancel, but not reduce, spending items in appropriation bills. The legislation Isakson is co-sponsoring would give the President more flexibility by allowing him to cancel or reduce any appropriation passed by Congress.

“One of the problems we have in America with deficit spending is spending money on projects that by anybody's definition are unnecessary projects,” Isakson said. “We need to have politicians justifying what they just spent rather than promising what they will spend.”

Isakson said he is committed to trying to pass legislation to curb federal spending and to demand more accountability from programs that receive federal dollars. To that end, Isakson has co-sponsored several pieces of legislation in addition to the line-item veto:

· The Stop Over-Spending (“S.O.S.”) Act would create a line-item veto mechanism for the President to use to eliminate wasteful spending and require Congressional affirmation for any deletions proposed by the President. It would implement procedures to automatically slow the rate of growth for mandatory programs if Congress fails to meet deficit reduction targets and reinstate statutory caps on discretionary spending. In addition, the S.O.S. Act would create two new bi-partisan commissions. The first would study the accountability and efficiency of government programs. The second commission would examine and provide solutions to the impending entitlement crisis.

· The Commission on Congressional Budgetary Accountability and Review of Federal Agencies Act would establish a bipartisan commission to review federal agencies and programs in an effort to eliminate federal spending on programs that are duplicative, wasteful, inefficient or outdated.