It looks like the Savannah Morning News dropped the ball on this one. Here is what the NAHB sent me:
Unfortunately, this is some poor reporting here. The Senate has not passed a $15k tax credit. The reporter is confused by the arcane budget process of the US Government.
The first step in funding the government is for both chambers to pass a budget resolution. The budget resolution is almost completely irrelevant. It provides an overall number on federal spending and offers a general sense of the Congress' spending priorities-that's about it. Most years, the House and Senate fail to even pass a joint resolution, and the appropriations process goes forward without it. There is probably a case to be made for abolishing the budget committee all together.
The reporter's confusion comes from an amendment to the Senate's budget resolution offered by Senator Isakson (R-GA). As you know, he's been unrelenting in his support for a $15k tax credit. His amendment, which passed the Senate by voice vote, would allow Congress to "create a deficit-neutral reserve fund for future legislation providing a nonrefundable federal income tax credit for the purchase of a primary residence in the amount of $15,000 or 10 percent of the purchase price."
What does this mean? Absolutely nothing. It does not mean that Congress will pass a tax credit or even that Congress has to consider it. It's as if you told your wife that she was permitted to open a second bank account in case you decided to save money for a home. In a sense, the amendment says Congress is permitted to do what Congress already has the power to do.
It certainly has symbolic value. And we are grateful to the efforts of Senator Isakson. But it is a concern to us that would-be buyers would misunderstand what the Senate did and delay their purchase-waiting for a tax credit that is unlikely to materialize. We've met with all of the key folks on the tax writing committees. They've made it clear to us and every other industry that they are not going to do anything more until the stimulus bill-and the existing $8k first-time buyer tax credit-have had some time to work. If there is a second stimulus (a big if), then the tax credit can be revisited. At this point, there are no plans for a second stimulus in the near future.
We are ready to pounce at the first opportunity for a bigger, expanded tax credit. The action on the Senate budget resolution is not it. It's unfortunate that the reporter misunderstood the Senate's actions.
If you have any questions about this, you know where to find me! Have a great weekend.
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