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Cynthia Tucker

Johnny Isakson’s Republican stimulus

12:28 pm September 17, 2009, by ctucker

With the first-time homebuyers’ tax credit scheduled to expire at the end of November, Sen. Johnny Isakson is leading the charge to extend it for several months, through July 1, 2010. In fact, Isakson believes that Congress should up the ante by lifting the income restrictions and making the credit available to those who already own a home. ”The market that is really suffering right now is the ‘move-up’ market,” he said.

Isakson, who formerly ran and co-owned a hugely successful real estate firm in Atlanta, was the prime mover behind last year’s proposal to offer a $15,000 tax rebate to homeowners. That was pared down and became the first-time buyers’ credit, which has boosted real estate sales and helped lead the economy back to recovery. According to The New York Times, the tax credit is responsible for the sales of as many as 400,000 homes since Congress passed the legislation.

“To let this die would be disastrous,” Isakson told me yesterday. “The best thing for the economy would be to turn the housing market around.”

I’m beginning to share some of the growing skepticism about the federal government giving ANY tax breaks for home ownership (although I have enjoyed those tax breaks myself). I’m not sure encouraging home ownership makes sense anymore, for a variety of reasons.

However, Isakson may be right about granting a temporary extension. Many economists are warning that a too-hasty end to  the massive bailouts, back-ups and other fiscal and monetary policies that the federal government has put into place could push a still-weak economy back into recession.

But there’s just one problem: the deficit. The tax credit has already cost twice as much as its proponents has forecast. The extension being pushed by Isakson and the National Association of Realtors would cost between $50 and $100 billion. (If that were being scored in over a ten-year period, like the health care plan, that would be $500 billion to one trillion.)

Isakson said he will look for ways to pay for it. “I’m willing to find the pay-fors to do it. You can’t be a fiscal consrvaive just when it’s convenient. You need to be one all the time.”

Well said.

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20 comments Add your comment

Wes

September 17th, 2009
12:52 pm

Since when does Isakson qualify as a fiscal conservative by any measure?

Jack

September 17th, 2009
12:53 pm

I really didn’t think today’s piece would be about ACORN. And I was right.

Shawny

September 17th, 2009
1:15 pm

I am not sure of the point of this blog posting. Giving people tax money back is good, particularly if the loss of govt revenue is offset by trimming govt expenses. That is all good.

The best stimulus, if you believe we need one, is to put money directly into the hands of the consumers, then let them choose what to spend it on. The worst stimulus is to take that same money and spend it in a way that the govt thinks it should be spend, and on things that we may or may not agree on, such as public works projects (and green jobs czars).

jt

September 17th, 2009
1:20 pm

Isakson said he will look for ways to pay for it. “I’m willing to find the pay-fors to do it. You can’t be a fiscal consrvaive just when it’s convenient. You need to be one all the time.”

ACORN,AMERICORE.

WHO DOES HE
THINK HE IS FOOLING?????????

Kevin

September 17th, 2009
1:22 pm

Cynthia doesn’t want to encourage home ownership?

How racist.

Midori

September 17th, 2009
1:23 pm

Yo Jack,

to quench that burning desire, why don’t ‘YOU’ write about ACORN?

jconservative

September 17th, 2009
1:58 pm

Senator Isakson will be hard put to find sources of funding for this bill. It seems everybody wants to be “revenue neutral” these days.
But there is a problem. The USA is overdrawn at the bank. Has been for years. We tried the tactic off borrowing more money to pay off the
“overdraw”. Did not work. We are still overdrawn.

How about we make a list of our bills & start paying them off? Probably have to raise taxes – is that OK? NO? You want to continue to leave the bills for the kids & grand kids? YES? OK, then that is what we will do.

Is this a wonderful country or what?

Cosby Smith

September 17th, 2009
2:00 pm

Johnny protecting his industry. Where were the hand outs when I bought my first home. Johnny is a big RINO or is tha racist. Time to get the Government out of everything as they have no clue how to fix anything but only mess it up. And cynthis, why not a blog on ACORN, millions upon millions in taxpayers money ging to such a corrupt outfit, oops sorry, did not mean to be a racist.

Ayn Rand Was Right

September 17th, 2009
2:08 pm

Let me get this straight. This program allows the tax payer to keep his or her own money to put toward purchase of a home. This property would then incur taxes, from the employed home owner (assuming one of the requirements would be to have a job) which then would be paid to the government. Not sure I see the problem here.

Our state is drowning in foreclosures, and this program is stimulating home sales. Houses cannot be crushed and removed to landfills like cars. Additionally empty houses draw vermin of both the animal and human variety. Tax credit to buy a home, home sales raise property values and lower crime rates, people spend money in their neighborhood raising sales taxes and creating jobs…still not seeing the problem with this program.

Jacks Mum

September 17th, 2009
2:12 pm

We give tax credits to people who do not pay taxes. If it is a good thing to give non-taxpayers a refund to stimulate the economy…why is it a bad thing to allow taxpayers to keep some of their tax money to buy something that incurs more taxes…seems like a win/win to me.

SorryJohnny

September 17th, 2009
2:31 pm

If you are giving a tax credit to help those in a home, upgrade; I want my $15,000 to do as I please. I don’t want a bigger home, but I do want to be on the receiving end of this deal. Why should only those who choose to upgrade receive the tax benefit? Sorry, I don’t want to make Johnny richer. But, I have a few items I would like to upgrade on that doesn’t fall under real estate. The money would be an excellent down payment on my Lexus, the auto industry is hurting as well. I didn’t have a clunker to trade.

Kevin

September 17th, 2009
2:34 pm

Let’s see-

90% of home loans are now backed by Federal agencies.
40% of home sales this year have been afforded the credit.

So the government is propping up the housing market on both ends. Nice.

And to those of you who say “letting people keep their money”– it’s a terribly flawed comparison. First, as a nation, we’re broke. Giving tax credits is like taking out a cash advance on your maxed out credit card. Second, the vast majority of first time homeowners pay no effective tax. Zero. Nada. Zilch. So it’s not their money. It’s the money of peole who actually pay tax.

Kevin

September 17th, 2009
2:38 pm

I feel your pain, Sorry Johnny.

I drive an six year old Honda that gets 30 MPG. So no cash for clunker for me.

I bought a house that I could afford. So no housing bailout for me.

I worked my tail off in school so I could get a good job that offers insurance benefits. So no (pending) healthcare freebies for me.

I work on the weekends to make sure the house stays kept up. So no “free insulation” for me.

Wait a minute. I suddenly feel racist for being angry about being penalized for doing the right thing all these years.

Jeff

September 17th, 2009
3:45 pm

Trying to re-inflate the ol’ housing bubble eh?

Isakson is doing this to increase home “values” that should not have been as high as they were to begin with.

I am looking to purchase a home in the next year, so I would definitely benefit from this program, but I think it is disgusting. Isakson describes himself as a “libertarian leaning conservative” and that is a complete joke. I am tired of government intervention in the housing market as all it is doing is artificially proping up the market and kicking the can down the road. Libertarians believe in free markets and this is far from that.

Jeff

September 17th, 2009
3:48 pm

Anyone who considers these rebates to be the deciding factor for taking out a mortgage on a home should not be purchasing a home to begin with.

Jeff

September 17th, 2009
3:50 pm

“why is it a bad thing to allow taxpayers to keep some of their tax money to buy something that incurs more taxes…seems like a win/win to me.”

Because it is an unfair and unsustainable policy. It is also interfering with the natural cycle of the market.

TnGelding

September 17th, 2009
10:49 pm

Just another GOP proposal for the wealthy. With foreclosures selling for 50 cents on the dollar, isn’t that incentive enough? What happens to the housing market if we start rounding up illegal aliens and sending them home? Unbelieveably, builders continue to build. The foreclosure process should have been stopped in its tracks 18 months ago and the loans renegotiated. And corporate America should have been given incentives not to layoff workers, especially if the company was still profitable.

Call it like it is.

September 18th, 2009
1:44 pm

Okay, Cynthia I am intrigue, why is now buying-owning a home now a bad thing? Please elaborate.

Michael

September 18th, 2009
1:55 pm

Quotes from the wrinkled old prune – Johnny Isakson.
“I’m willing to find the pay-fors to do it. You can’t be a fiscal conservative just when it’s convenient. You need to be one all the time.”
It seems old Johnny-boy is finding it really inconvenient to be a fiscal conservative these days. He’s for this tax credit for home buyers, which is a bad idea and he voted for that awful Wall Street Welfare bill (along with Chambliss) last year!

Dan

September 30th, 2009
9:58 am

Let’s all hope they allow an extension and allow all income levels a TAX CREDIT to help the very fragile housing market recover. It would only be for another 6-9 months and would get money flowing through the system again… This is direct stimulus to everyday people and the government will get all of the money back , and more, because of the stimulated market. Well worth the investment by the government..