The Latest On Negotiations Over The Stimulus: School Construction In, Home-Buyer Credit Out?
The Latest On Negotiations Over The Stimulus: School Construction In, Home-Buyer Credit Out?
House and Senate conferees met for more than nine hours of closed-door negotiations yesterday to reconcile their differing versions of the economic stimulus bill. Senate Majority Leader Harry Reid said he hoped an agreement could be reached by today, but declined to detail the progress made.
Politico’s Glenn Thrush is reporting that the Senate may yield on including a $15,000 home-buyer’s credit in the stimulus:
The key here, House Dems say, was Obama’s Monday press conference in which he signaled his strong intention to back Pelosi on a handful of key spending initiatives, especially $21 billion in school construction and technology grants, $10.3 billion in COBRA insurance and $8.6 billion in new Medicaid coverage for the unemployed…House Democratic staffers see several areas of potential accommodation with the Senate, including alterations to the mixture of tax cuts and spending that could result in scaling back a $15,000 homebuyer tax credit, a favorite of the Senate GOP.
First Read reported that $15 billion in school construction could be added to the bill, in lieu of the credit. This would be a fantastic swap, and Congress should make sure it happens.
As the Wonk Room has explained, the home-buyer’s credit is poorly targeted, more useful to wealthier households, and won’t actually help the housing market. Kash Mansori at Econbrowser wrote that “all the house purchase tax credit will do is to modestly increase the number of houses sold each month… with no noticeable impact on house prices.” A panacea for our economic woes, it is decidedly not.
School construction, meanwhile, can provide significant stimulus, quickly. As the Center for American Progress’s Michael Ettlinger explained:
[T]he American Society of Civil Engineers estimates that spending $127 billion to $268 billion is needed to bring school facilities to a good condition. The projects these funds would pay for are among the infrastructure investments that can be brought up to speed very quickly. The construction sector, which would benefit most from this funding, has enormous idle capacity and more idle workers than any other industry.
The Senate’s “compromise” bill, as it stands now, would create about half a million fewer jobs than the House bill, despite costing $20 billion more. The rumored amendments would begin to address that disparity.
Cross-posted on The Wonk Room, which is following the latest developments on the economic recovery package.
GRASSLEY: Any construction, whether it's school, university, or whether it's highways or any other construction that can be done within the two-year period of time, I would support that.
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Hilarious photo of Harry receiving a direct brain transfusion from outer space.
February 11th, 2009 at 10:41 amNevar….
LOL! But I think it’s just a probe, not a transplant, and as usual the space-aliens are not going to find any intelligence in that cranium.
February 11th, 2009 at 10:46 amMaybe they’re running out of space, and needed a little more…
February 11th, 2009 at 10:46 amIf that’s supposed to be a brain probe, no wonder the aliens can’t find anything. they’re entering thru the wrong end of his body.
February 11th, 2009 at 10:47 amGood move.
While the home-buyer credit sounds nice, it seemed to me to be one of those measures that has more political effect than practical effect. The people even able to contemplate buying homes in this economy, with the credit market the way it is, are already wealthy. Plus, it is a one-time credit that won’t even find it’s way into the economy for quite some time.
School construction, on the other hand, has immediate and long-term impact that outweighs any benefit a home-buyer credit would provide.
Good call, IMHO.
February 11th, 2009 at 10:48 amWith so many people out of work, and more getting the axe every day, the stimulus bill needs to contain more than tax cuts. Tax cuts don’t do a lot for those that don’t have an income! Time to kick the obstructionists to the gutter and move on. Obama promised bipartisanship, he tried and they spit on him. Until their “Country First” slogan becomes a reality – screw ‘em.
February 11th, 2009 at 10:48 amAgain I ask…… why are the Democrats negotiating with terrorists? The republicans want to destroy America and the American way of life. Pete Sessions outed himself as an “insurgent” following a “Taliban” model.
We need to isolate and destroy the “evildoers within” !!
February 11th, 2009 at 10:52 amI am contemplating buying a home and I’m not wealthy. Of course, I’m looking for houses in the $160-$170K range. My credit is good, debt/income ratio good.
I’m poised to do my part and help spur the economy, but I haven’t heard anything about what’s going to be done for people like me.
What could be done? I’d like some down payment assistance.
February 11th, 2009 at 10:54 amNo, I think the hand on the right reaching towards him has a USB flash drive. Hopefully they’ll try copying some balls over to Harry’s hard drive.
February 11th, 2009 at 10:54 amI think it’s one of those flashy light thingys from MIB.
February 11th, 2009 at 10:57 amThey just love to argue. They are like Nero fiddling while Rome burned. School construction is good. Real help for homeowners are good. Tax cuts for the rich are bad. (They aren’t hurting.) Get the darn thing passed! It will take awhile to get things going and we don’t have the luxury of time right now.
February 11th, 2009 at 10:59 amTweedster and LiberalVoter….
I think you’ve both summed it up.
In particular the proposed home-buyer’s credit presumably would take affect when exercised, in the following tax year.
What’s breathaking about this is that wasn’t the bank bailout supposed to ‘unfreeze’ credit and loan-making? It’s one admission that the bailout was and is a failure.
And because it would be only those with enough financial security already who would benefit (they need to put up the 15K first, then get the credit later) it would also encourage a certain amount of speculation–when what’s needed is stabilization.
ANS/OR others with enough money to consider using it may not bother, because until the market stabilizes and then offers to the chance of some growth, the potential buyer is looking at slow turnover–unless the home can be rented, in which case more speculation may occur precisely when renting needs to be affordable.
February 11th, 2009 at 11:06 amcitizen_pain, Nevar….
I think the hand on the right is holding a shiv.
February 11th, 2009 at 11:10 amOr a Pez dispenser..
February 11th, 2009 at 11:17 am“Here, Uncle Harry, would you like one?”
I wish that range EXISTED in my area. QQ
February 11th, 2009 at 11:29 amI’m also looking to buy and hoping beyond hope that I can find a 2 BR for under $450,000
That’s crazy. Hose values are all over the place in Lex KY. There are houses on the market anywhere from 110K up to 2,3 million.
For 170K or so, I could get a 3-4 BR, 2.5 bath, about 2000 sqf, garage, yard, etc.
That’s why I am so anxious to jump on one, but I am waiting to see what kind of assistance I’d get.
February 11th, 2009 at 11:33 amWhy is Grassley one of the negotiators??? Shouldn’t they be Spectre, Collins and Snowe?
Grassley voted no; who care what he thinks???
Do the Republicans get a chance to filibuster the post-conference-committee compromise?
February 11th, 2009 at 11:41 amI thought Harry WAS a PEZ dispenser.
February 11th, 2009 at 11:47 amSeriously, I think someone is going to catch hell for allowing the remote control to be in the picture.
February 11th, 2009 at 11:52 amHarry Reid must friggin GO!!! make the republicans go before the american people and fillabuster. make THE REPUBLICANS tell the american people why the REPUBLICNAS think it’s a better idea to contiune giving tax cuts to the wealthy and screw you. Harry Reid is a faliure!!!
February 11th, 2009 at 12:41 pm