Yesterday, Rep. Roy Blunt (R-MO), who is running for Missouri’s open Senate seat, unveiled his jobs plan at an event with the U.S. Chamber of Commerce. Of course, it’s full of the boiler plate GOP standards about cutting taxes for the rich and eliminating regulations. The St. Louis Post-Dispatch actually dinged the plan as “heavy on Republican goals — extending the key tax cuts — and talking points,” noting that “despite being a plan intended to boost jobs, it mentions the phrase ‘job-killing’ 10 times, mostly in reference to Obama policies.”
But one aspect of the plan, in particular, caught my attention. Blunt spends a lot of time in the document fearmongering about the deficit, saying “we must put a stop to this reckless and embarrassing culture of running up the bill and passing it along to our children and grandchildren.” He even advocates rescinding the stimulus money that has yet to be spent, which amounts to a tax increase on the middle class, as $65 billion in remaining stimulus funds have already been dedicated to middle class tax cuts.
But Blunt’s concern about spending evaporates when it comes to having the federal government subsidize the real estate industry, as he calls for permanently extending the home buyers tax credit, which has mercifully expired:
Recently it was announced that new home purchases had fallen off more than 30%. Clearly people respond to tax incentives and the recently-expired home owners’ tax credit is no exception. Encouraging people who can afford it to purchase homes helps employ homebuilders, real estate workers, bank employees, and keeps liquidity in the market.
The home buyer’s tax credit was enacted as part of the stimulus and then extended a couple of times, and by all accounts it was a complete and total boondoggle, costing taxpayers billions to subsidize activity that was going to happen anyway. And Blunt wants to make it permanent, removing any pretense that it’s a measure to spur economic recovery.
According to the National Association of Realtors — the real estate industry’s own lobbying arm — only 350,000 of the first 2 million credits were claimed by buyers who would not have bought their home anyway, costing “$43,000 for every new homebuyer who would not have bought a house without the tax break” up to that point. Calculated Risk figures that, when all is said and done, the credit “will probably cost taxpayers over $100,000 for each additional home sold.”
Not only that, but millions of dollars in credits were spent inappropriately, including $9 million sent to prison inmates and another $14 million to buyers who weren’t qualified for the program. The credit was even sent to some children.
Even the credit’s staunchest supporters — like Sen. Johnny Isakson (R-GA) — said that the credit’s “sunsetting is an incentive to drive people to the marketplace” and poo-pooed the notion of extending it forever, which pretty clearly turns it into a permanent subsidy to the real estate industry. But since Blunt has received far more money from the finance/insurance/real estate sector than any other in his career, maybe that’s precisely the point, no matter what it costs.