HOUSING CRISIS -- (Senate - March 04, 2008)
Mr. McCONNELL. Mr. President, I wish to take a few moments of my leader time, not to interfere in the record with this discussion that has been ongoing between the Senators from Kansas and Washington.
Last week we debated housing. Democrats want to raise monthly mortgage payments on everyone who wants to buy a new home or refinance an existing one. Republicans have a broader, bolder plan. We want to create the economic conditions that make home ownership easier--more jobs and higher wages. Our first priority is to help families who are either facing foreclosure or seeing the values of their homes drop as a result of other foreclosures nearby.
This morning I want to talk about one specific action we can take to help these families. Home values are falling not only because of cut-rate sell-offs by banks but also because areas with high volume and vacant homes often see an increase in crime and neglect. One thing government has done in the past to the help reverse a slide in home values is to make tax credits available to people who pick up foreclosed homes in affected areas. This worked in the mid-1970s when a period of easing credit led to overconstruction and higher interest rates. Congress responded with a $6,000 tax credit spread over 3 years for anyone who bought a new home for their primary residence. This is what they did back in the 1970s. Home values were stabilized. Inventory dropped, and the housing market recovered.
Congress should do the same today. Senator Johnny Isakson of Georgia, a real expert in real estate and housing, who spent decades in that field, has a fabulous idea. He saw the good effects of the tax credit that Congress provided back in the 1970s. Now he is proposing a $15,000 credit spread over 3 years for people who buy newer homes with a first mortgage in default or single-family homes in the possession of a bank. Let me say that again. He is proposing a $15,000 tax credit spread over 3 years for people who buy newer homes with a first mortgage in default or single family homes in the possession of a bank. Buyers must occupy those homes as their principal residence to be eligible. We are not about to let speculators come in and make the current problem even worse.
This is one idea Republicans are proposing to help families struggling with the painful effects of the housing downturn. I mentioned some of these ideas yesterday. We will discuss others as the week goes on.
A lot of families need urgent relief. They should know the Government is doing everything it can, without damaging our long-term economy, to help them through a very difficult stretch. We certainly should avoid measures that make the underlying situation worse, as the centerpiece of the Democrats' response to the housing situation would certainly make happen.
I yield the floor.