A Call to Extend the Homebuyer Tax Credit Meets White House Resistance

Enacted as part of February’s economic stimulus bill, the popular $8,000 tax credit for new homebuyers expires Nov. 30, prompting calls among some lawmakers to extend it for the sake of struggling consumers and a sputtering housing market.

Those calls gained some volume this morning in the Senate Banking Committee, where Chairman Chris Dodd (D-Conn.) reiterated the importance of granting the extension before the program expires six weeks from now.

“In addition to helping middle class families achieve the dream of homeownership, the tax credit has helped to stabilize housing prices and the market at large,” Dodd argued in a statement. “The credit is set to expire in five weeks. But the work of stabilizing the housing market won’t be done.”

Dodd, along with Sen. Johnny Isakson (R-Ga.), have sponsored a bill to extend the credit through next June. The Obama administration, though, is wary of the additional costs following news that deficit spending hit $1.4 trillion in the fiscal year that ended Oct. 1. Indeed, Shaun Donovan, secretary of the Department of Housing and Urban Development, told Dodd’s committee Tuesday that the administration isn’t ready to commit to the homebuyer tax-credit extension, arguing that officials first want to weigh the costs versus the benefits.

“I am mindful that these proposals can be very expensive,” Donovan said, “especially at a time of significant budget deficits.”