An $8,000 home-buyer’s tax credit that was included in the economic stimulus package is set to expire on November 30, but there’s a growing push in the Senate to reauthorize the credit through 2010.

When it was first being debated, we here at The Wonk Room pointed out that the credit is poorly targeted and doesn’t do much to incentivize home purchasing that wouldn’t have happened anyway. But instead of acknowledging these problems, Sen. Johnny Isakson (R-GA) wants to not only reauthorize the credit, but double it, remove the income cap, and make buyers who already own a home eligible for it:

“I’m working the floor now to make everyone aware that the $8,000 credit sunsets on Nov. 30,” Isakson, a Georgia Republican, said in an interview today. The former real estate executive, says he is “talking to everybody and anybody”…Isakson’s legislation would extend the program through the end of 2010, almost double the credit to $15,000 and remove restrictions that prohibit individuals who already own homes or earn $75,000 — $150,000 for couples — from getting the tax break.

Isakson, who professes great concerns about the deficit the rest of the time, is advocating a needlessly expensive gift to the real estate industry, dressed up as an economic recovery aid. This credit has already cost $15 billion, which is more than twice its original estimates. Calculated Risk found that this broke down to $43,000 per additional buyer, which would increase to $30 billion, or approximately $60,000 per additional buyer, if the credit were expanded and extended.

The reason that the credit costs so much per additional house sold is because most people claiming it would have bought their house anyway. By the National Association of Realtors’ own admission, 1.8 to 2 million credits will result in only 350,000 additional sales that would not have taken place without the credit. And by removing the income cap, that incentive is reduced even further, as its unlikely that the money would push the super-rich into purchasing houses that they otherwise wouldn’t have, but they can claim the credit anyway.

Also, since Isakson’s plan opens the credit up to people who already own homes, many of the credits will be dispersed without resulting in the net purchase of a home, as people will be simply leaving one home for another. Finally, it will likely lead to unnecessarily propped up home prices, as people spend more on homes than they otherwise would have — and we all saw the effect that artificially inflated home prices can have on the economy.

In the end, extending the credit would amount to nothing more than a boon for the real estate industry, at the federal government’s expense. And with that in mind, it should come as no surprise that the real estate industry is far and away Isakson’s largest donor.

Yesterday, the Federal Reserve announced that, henceforth, it is going to extend its consumer protection oversight to the non-bank subsidiaries of banks, which as the Washington Post noted, is “a group of lenders that includes several major originators of subprime loans.” The Fed intends for the announcement to indicate its newfound seriousness regarding consumer protection:

The policy, which will take effect immediately, also provides for the investigation of consumer complaints against these nonbank entities…The policy announced today builds upon the groundwork of the pilot program and responds to a need for more effective supervision and consumer protection.

But this move seems to be aimed more at fending off the drive to take away the Fed’s consumer protection responsibilities (via creation of a Consumer Financial Protection Agency or CFPA) than any meaningful change of heart on the Fed’s part. “Is this trying to make up for the vulnerable position they’re in?” asked Cornelius Hurley, a professor at the Boston University School of Law and a former Fed lawyer. “It certainly sounds that way.” Federal Reserve Chairman Ben Bernanke has been vociferously opposed to the CFPA proposal. “I understand why some would want to see a new agency that would be fully committed to this area. And, I’m not criticizing that,’’ Bernanke has said. “I’m simply saying that…we believe we can continue to do good work in this area.’’

The Fed’s new policy announcement actually fits in perfectly with the Fed’s tendency to announce consumer protection initiatives long after the horse has already left the barn. For instance, the Fed was warned about the spread in subprime and predatory lending by the Greenlining Institute in 2004, and by Edward Gramlich, a member of the Reserve Board itself, in 2005. However, it didn’t get around to issuing its “Guidance on Nontraditional Mortgages” until September, 2006, at which point subprime loans constituted 20 percent of mortgage originations, totaling $600 billion. Even then, the guidance was a list of best practices, not a ban on predatory products.

Jim Carr, of the National Consumer Reinvestment Coalition, said that, “even if the Fed were proposing a regime that was as comprehensive as the law, it wouldn’t take away the inherent conflicts between the Fed’s support for the banks versus its protection of consumers.” Indeed, it’s fine if the Fed wants to take a stab at policing predatory lending, but it has shown no competency in that area in the past, so the drive to create the CFPA shouldn’t get hung up by the Fed’s promises.

Earlier this morning Senate Finance Committee Chair Max Baucus (D-MT) unveiled his committee’s health care bill, which has no public option and mandates that everyone buy insurance. While Baucus has failed to garner support from any congressional Republicans and has outraged progressives, there has been one very positive response to his proposal.

Following Baucus’ announcement, HealthNet shares increased by 3%, United Health Group Inc shares rose by 2.7%, Humana Inc. grew by 2.6%, Wellpoint stock gained 1.7% and Aetna Inc rose 1.6%:

Earlier this week, ThinkProgress interviewed Wendell Potter — a former health insurance executive — who pointed out that “every time there is an article in a big newspaper questioning the success of progressives in getting a good bill passed, the stock will go up.” “The analysts/investors don’t think any good reform is going to happen, or anything that would happen that would adversely affect the insurance companies,” he said. Watch it:

In fact, since the President signaled that he is backing away from the public option, health insurance stocks have been on the rise. “Health-care investors are starting to breathe a sigh of relief as they feel the worst case could be averted,” John Sullivan, director of research at Leerink Swann, told the Wall Street Journal in August. “Health-care stocks have risen 22% since late February, when President Barack Obama began his push for an overhaul; the overall market is up 38%” between late February and August.

Health Care for America Now (HCAN), a pro-reform health care advocacy group, started a new advertising campaign on Tuesday that calls for a public option. “The commercial, entitled ‘How to Get Rich,’ says the insurance industry is motivated by greed.” It references Ronald Williams, chief executive of Aetna, who received a compensation package of $24 million in 2008. Watch the ad:

Appearing at a Morgan Stanley healthcare conference yesterday, Williams said, “I continue to believe that there is not the support, particularly in the Senate, for a government plan.” He told the audience that a public option could affect the health insurance companies’ profits over time. “[E]mployers might very well choose to take advantage of the government rates and that long-term it’s not good for the healthcare system.” By which, Williams means it’s not good for Aetna.

Earlier this week, Williams was interviewed on Fox Business, where he urged President Obama to focus on the “80 percent” of things they can agree on. In an ironically revealing moment, Williams stumbles when he tries to explain his priorities for health reform. “Our focus is really on trying to get something done that’s good for the — American people,” he said, hesitating and pausing with his mouth hanging open before mustering out the last two words. Watch it:

Last month, Williams pledged to pursue profits rather than add or keep enrollment. “We have a clear bias toward profitability over growth,” he told investment analysts.

Full disclosure: HCAN is currently running paid ads on ThinkProgress.