Tax reform remains a possibility this year and should the conversation about it begin members of Congress will benefit hearing from REALTORS® to reduce the chance they make decisions that could hurt markets, a lawmaker, Hill staff, and analysts said at forums in Washington yesterday.
“We really value your judgment because of your sense of the local economy and also because you know what your neighbors think,” said Rep. Chris Van Hollen (D-Md.), ranking minority member on the House Budget Committee.
Van Hollen made his remarks before a group of politically active REALTORS® in town for a day of orientation on federal issues of importance to real estate.
Staff professionals on Capitol Hill who work with members of Congress told REALTORS® lawmakers have a lot on their plates, making it difficult to predict the likelihood of their tackling tax reform. But a staff person on the House tax-writing Ways and Means Committee says the committee chair, Rep. Dave Camp (R-Mich.), would like to see comprehensive reform passed out of his committee this year.
Would the mortgage interest deduction be part of the mix? It can’t be ruled out, the staff aides and other speakers said, so REALTORS® have to remain engaged and be able to sift through proposals that would be unacceptable to them and proposals that would be less bad. “Some proposals will be worse than others,” Van Hollen said. He added that his sense is that many members of Congress believe supporting home ownership is a “good policy choice” and that he will “certainly oppose any effort” to change or dismantle MID.
Van Hollen and Hill staffers said Congress is facing three more “fiscal cliff”-like deadlines that will keep the economy in a state of uncertainty: the deadline for the automatic, across-the-board cuts to federal programs, known as the sequester, which is March 1; the deadline for raising the debt ceiling, which is May 19; and the deadline for extending a continuing resolution, which is a temporary budget measure for keeping the federal government operating in the absence of a congressionally passed appropriations bills, which expires March 28.
A panel of analysts at the orientation agreed that for most of the public and for many lawmakers the issue of whether the federal government should support home ownership is largely decided, and it’s in favor of maintaining a path for a broad swath of households. “I think that’s where the country is,” said Jaret Seiberg, managing director and financial services policy analyst for Guggenheim Securities.
“There isn’t a snowball’s chance in hell that any of these programs are going away,” said George Mason University professor Anthony Sanders, referring to FHA, Fannie Mae, and Freddie Mac, among other ways the federal government is involved in home ownership.
The more immediate issue is how any modifications to these entities or to tax incentives for home ownership, including MID, would be designed, and it’s on that point that the analysts and staffers echoed Van Hollen’s point about the importance of REALTORS® staying engaged, because REALTORS® are the ones who can explain to lawmakers the impact different proposals can have on markets. The worst thing that can happen is for lawmakers to make changes without understanding the impact of what they decide.
“Come in to see us and tell us how these different ideas impact the market,” said one of the staff aides on the House tax-writing committee.