Isakson Criticizes Senate’s Refusal to Stimulate Housing Market by Expanding Tax Credit for Homebuyers

U.S. Senator Johnny Isakson, R-Ga., today criticized the Senate’s rejection of his amendment to stimulate housing demand and boost the economy by expanding the first-time homebuyer tax credit to a $15,000 tax credit for any buyer of any home. The Senate rejected Isakson’s amendment, which he sought to attach to the “cash for clunkers” bill, by a vote of 47 to 50.

Isakson then voted against final passage of the “cash for clunkers” bill.

“I’m disappointed in this vote on the homebuyer tax credit, because every American is suffering in this economy. Every American deserves for Congress to look for positive incentives to bring the housing market back, restore their equity, improve their values and return us back to a vibrant economy,” Isakson said. “The ‘cash for clunkers’ program demonstrates what I’ve known all my life, which is positive incentives cause positive results. The problem we have, though, is it was not the automobile market that disappeared first in America. It was the collapse of housing market.”

Specifically, Isakson’s amendment would have increased the maximum amount of the credit from $8,000 to $15,000 and expanded the current tax credit so that it applies to any buyer of any home, not just first-time buyers. The amendment also would have eliminated the income caps of $75,000 for an individual and $150,000 for a couple under the current tax credit so that there is no income limit for eligibility. The amendment would have extended the tax credit for one year from date of enactment and would have still allowed homebuyers to claim the credit on their 2009 tax return for purchases made in 2010. Finally, the amendment would have required the expansion of the tax credit ultimately to be paid for by stimulus funds.

Isakson’s amendment was endorsed by the National Association of Home Builders and the National Association of Realtors.

Isakson has pushed hard for a tax credit for homebuyers since January 2008 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, who was in the real estate industry in Atlanta at the time, says the results were clear and swift as home values stabilized, housing inventory dropped and the market recovered.

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.
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Isakson Criticizes Elimination of Expanded Tax Credit for Homebuyers

Votes Against $3.56 Trillion Budget Resolution

U.S. Senator Johnny Isakson, R-Ga., today criticized House-Senate conference negotiators for the Fiscal Year 2010 Budget Resolution for removing language authored by Isakson that would have provided for a $15,000 tax credit to individuals who purchase a home in the next year. Isakson voted against final passage of the $3.56 trillion Budget Resolution, which passed by a vote of 53 to 43.

It was the second time this year that a House-Senate conference committee has deleted Isakson’s expanded $15,000 homebuyer tax credit after it had won overwhelming approval by the Senate.

“I would like to thank the Senate for its wisdom in adopting the $15,000 credit, express my deep disappointment in the conference committee for dropping it and encourage our president and the leadership of our country to give a second thought to what this credit could do,” Isakson said. “The greatest stimulus in the world is not a gift of money. It is an incentive for American families to invest and restore confidence in the United States economy.”

On April 1, the Senate unanimously passed Isakson’s amendment to the Fiscal Year 2010 Budget Resolution that would have created a deficit-neutral reserve fund to provide for a $15,000 nonrefundable federal income tax credit for the purchase of a principal residence during a one-year period. It would also have ensured that there was room available in the Fiscal Year 2010 budget for a homebuyer tax credit to be passed at a later date.

On Feb. 4, 2009, the Senate unanimously approved an amendment by Isakson to the economic stimulus bill would have provided 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. During conference negotiations between the House and Senate on the final version of that bill, Isakson’s $15,000 tax credit for all purchasers of any home was removed. Instead, House and Senate negotiators made only small modifications to the first-time homebuyer tax credit that was enacted in 2008 as part of the Housing and Economic Recovery Act of 2008.

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, who was in the real estate industry in Atlanta at the time, says the results were clear and swift as home values stabilized, housing inventory dropped and the market recovered.