American Jobs And Closing Tax Loopholes Act Of 2010 - Continued

Floor Speech

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Mr. DODD. Mr. President, I wanted to take a few minutes today to speak in support of the amendment offered by my dear friend and colleague from Nevada, Harry Reid. I am proud to be cosponsoring this important amendment. Last November we passed, with bipartisan support, an amendment that extended the very successful first time homebuyer tax credit and expanded it to the ``move up buyer.'' My good friend from Georgia, Senator Isakson was instrumental in crafting this extended and expanded tax credit and I want to commend him for all the work he has done on this issue. Under that legislation, which we worked on together, homebuyers who were eligible for the credit had to sign a binding contract for their new home by April 30 and close by June 30 to receive the credit.

As of April, the Internal Revenue Service estimates that 2.6 million Americans have used the credit. The National Realtors Association reported that home sales rose by 6 percent between March and April this year as Americans clamored to qualify for the credit. That increase marked the third consecutive month that home sales grew. And that is exactly what this legislation was intended to do--spur home sales and bring the housing market back to life.

There are between 55,000 and 75,000 eligible homebuyers who entered into contracts to purchase a principal residence by April 30, but who will not get the benefit of the homebuyer tax credit because they do not close by June 30. There are a variety of reasons this might occur: the seller is unable to secure a timely approval from their lender for sales related to distressed properties; recent natural disasters have damaged the property; or the homebuyer has experienced delays in the processing of their Federal mortgage program application.

This amendment would extend the closing date deadline from June 30 to September 30 so that these eligible homebuyers can still claim the credit. I want to make very clear that this amendment does not extend the credit to new applicants--they must still meet all the eligibility requirements and be under contract by April 30. This amendment just gives them more time to close the deal.

At the end of the day, this amendment is really about fairness for the thousands of homebuyers who might be ineligible for the credit simply because it is taking longer than usual to complete their paperwork. It is simply unfair to allow homeowners who played by the rules to lose this credit due to administrative challenges beyond their control. I also want to note that this provision is fully paid for by denying corporations the ability to deduct punitive damages from their taxable income. Once again, I thank the majority leader and his staff for crafting this fiscally responsible amendment to help homebuyers. I urge all my colleagues to vote for this amendment.

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