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AJC - Saxby Chambliss on Eliminating Deductions for 2nd Home Mortgages

News Article

Location: Washington, DC

By Jim Galloway

U.S. Sen. Saxby Chambliss on Monday said he's taken heart from Mitt Romney's mention of the possibility of doing away with mortgage interest deductions on second homes, and said he'd like to see a presidential debate this fall dedicated to the federal fiscal crisis that will immediately follow the November election.

"I was glad to see [Romney] at least allude to that. That's the kind of conversation that we're going to have to have," Chambliss said.

In a speech to the Atlanta Press Club, Chambliss gave an update of his "Gang of Six" efforts with U.S. Sen. Mark Warner, D-Va., to broker a bipartisan solution to the ballooning federal deficit -- and the possible end of George W. Bush-era tax cuts that will expire on Dec. 31.

The Georgia senator also warned that whoever wins the White House will have to almost immediately come before Congress to request another increase in the debt ceiling. "You remember that ugly fight last summer? It will be even less good-looking in January, I promise you," Chambliss said.

Chambliss has sailed into the wind of the tea party movement by advocating a mix of spending cuts and the elimination of tax loopholes. The latter would increase federal revenue while lowering across-the-board tax rates.

Chambliss' Gang of Six never got down to specifics, but the Simpson-Bowles debt-reduction commission in 2010 recommended the elimination of many tax deductions -- including one for interest paid on second home mortgages.

There's been little sign that the Gang of Six efforts at striking a deal had resonated on the GOP side of the presidential contest until 10 days ago, when reporters overheard Romney, now the presumptive GOP nominee, at a Florida fund-raiser, saying that he might seek to limit tax deductions for second home mortgages.

Romney aides quickly disavowed thought, saying the candidate was merely juggling ideas. And Newt Gingrich just as quickly attacked Romney for surrendering "to the class warfare rhetoric of the left."

Here's what Chambliss said this afternoon about deficit reduction:

"I hope we have a presidential debate that's committed to that issue. Let Romney get his plan together, let the president get his plan together, and let's have a real debate over what is the best way forward.

"Part of it is going to be tax reform. We know that. We didn't make any specific recommendations on second mortgages, but that's got to happen. We know that if you eliminate all tax expenditures and tax credits, that you can generate $1.2 trillion annually in additional revenue. The question is, we also know you're not going to totally eliminate mortgage interest deduction and charitable deductions -- there may be some others.

"But every time you add one of those back, you've got to pay for it out of that $1.2 trillion. So certainly, you can modify the mortgage interest deduction and still have an incentive for people to buy first homes or second homes, depending on how you couch it.

"But I was glad to see him at least allude to that. That's the kind of conversation that we're going to have to have."

In his speech to the Press Club, Chambliss also gave a familiar but cogent explanation of why the tea party movement has required an alliance between Atlanta Mayor Kasim Reed and Gov. Nathan Deal to push for federal funding for a $650 million dredging of the Port of Savannah by the U.S. Army Corps of Engineers:

"One hundred percent of Corps projects historically have come from earmarks. We are now in a post-earmark world. That means [members of Congress] can't go in and request it. So we're going to have to have it come from the Corps, or from the [Obama] administration.

"The administration has thrown some money in there at this point, and that's kind of kept the door open for us. We do know that the deepening project in Savannah is the No. 1 port project for the Corps of Engineers…

"We are leaning on the Corps right now, to make sure that they make the right request, and that we have the right kind of inroads to the White House -- to continue to emphasize the involvement of the White House in putting money forward. [Atlanta Mayor] Kasim Reed has just been a great champion. This has been a model, bipartisan effort on the part of the governor and Kasim…."

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