Washington DC, February 1, 2008.

The American Homeowners Grassroots Alliance urges the U.S. Senate to pass the Senate Finance Committee’s improvements to the House economic stimulus package when it votes on the amendments next week, and to move to a conference with the House of Representatives and quickly work out any differences. “The Senate Finance Committee’s changes substantially improve the ability of the package to help the nation’s 75 million homeowners and prevent a recession” said American Homeowners Grassroots Alliance President Bruce Hahn. “It is also addresses other important issues that affect the housing market, helps more homeowners, and adds relatively little to the cost,” he added.

The one year economic stimulus package passed by the House of Representatives increases to $729,750 maximum loan limit eligible for purchase by Fannie Mae, Freddie Mac and FHA programs, provides cash rebates to taxpayers, and provides investment incentives for business. The Grassroots Alliance believes that the Fannie Mae, Freddie Mac and FHA program loan limit increases will help reduce foreclosures by enabling many more homeowners to refinance their mortgages at lower rates. It is not a total solution to foreclosures, but anything that reduces foreclosures will help stabilize home prices, which benefits all homeowners. The infusion of cash through rebates to taxpayers earning less than $75,000 individually or $150,000 per couple will help stimulate the economy by putting the money in the hands of consumers most likely to spend all or most of that money, maximizing the stimulative effect.

The Finance Committee package, which had bipartisan support, would add some new provisions to the House economic stimulus package and modify the rebate provisions. It is slightly more costly ($157 billion first year cost vs. $146 billion for the House bill) and would add new provisions to the House package that would benefit homeowners and the economy in several ways. The new tax incentives in the Senate Finance Committee stimulus package add little to the cost of the package (about $5.5 billion) but will help homeowners and stimulate further recovery in the housing sector. They will put money back into the economy by encouraging the purchase of energy-efficient home-related products and services, and put money back in the hands of American homeowners by lowering their monthly energy bills, which is especially important to those homeowners who have seen their energy costs soar as a result in the increase in home heating oil prices. According to the American Council for an Energy-Efficient Economy the incentives could reduce carbon emissions by 97 MMT of carbon and energy costs by $22 billion thru the year 2030. They include:

Like the House economic stimulus package the Senate Finance Committee package provides cash rebates. They are slightly less generous but are more fair, applying to more homeowners as well as to disabled veterans. The Senate version would extend rebate eligibility to 20 million seniors and 250,000 disabled veterans who will also receive rebate checks of $500 per individual, $1,000 per couples and $300 per child. In the house bill the rebates are $600 for individuals and $1,200 for couples. The cutoffs for rebate eliility were doubled, from the House’s $75,000 individual/$150,000/couple to $150,000/300,000. “This will put money in the hands of many senior homeowners on fixed incomes who have had a difficult time keeping up with real estate tax increases, and is an opportunity for our country to show thanks and respect for the 250,000 disabled veterans who have sacrificed so much for their country,” according to AHGA’s President. “American homeowners are happy to accept a slight reduction in the rebates if it means that seniors and disabled veterans can also share in the proceeds.”

The Senate plan also extends unemployment insurance benefits for 13 weeks in all states and ads another 13 weeks for states at risk of high employment. AHGA supports this provision as well, because it will help so many homeowners in many states or industries with depressed economies and will also put additional money back into the economy quickly. For homeowners in many industrial states it may not be enough to save their homes from foreclosure, but at least it will enable them to feed their families and buy a little more time for them to find a job. There is also high unemployment in many business sectors that serve homeowners. The extension would help unemployed real estate agents, construction workers, mortgage executives and many others who serve American homeowners.

The Senate will vote on the Senate Finance package and possibly a separate series of other measures during the week of February 4. Among them are proposals giving more help for low-income people to pay for winter heating, fund municipal bonds to help homeowners facing foreclosure, and temporarily expanding benefits for the poor who rely on food stamps. AHGA believes these amendments would also help many American homeowners who need our help and would also offer additional economic stimulus.

Some Republicans are expected to filibuster the Senate Finance package and any other amendments to the House economic stimulus package because of the additional cost or because it will slow the process. Many homeowners are Republicans (about 1/3, according to a 2000 Presidential exit poll, and many of the remainder are fiscal conservatives as well (1/3 of homeowners were Democrats and 1/3 Independents in the same poll). AHGA respects the need for fiscal prudence, but believes that the slight increased cost (7.5%/$11 billion) is well worth it and should not present a major hurdle in light of President Bush’s and the overwhelming House Republican support for the $146 billion the House package. The difference can be whittled down in conference, and in any event the additional cost could be more than offset if both parties simply agreed to eliminate all earmarks in future spending bills.

Even with the potential expansion of the House economic stimulus package by the Senate the week of February 4, Congress can still easily achieve the February 15 deadline it has set to send the package to the President. To do that the Senate and House would have to name conferees immediately after the Senate votes and agree to send the compromise version of the package back to their respective bodies for final approval quickly.

The differences in cost between the two measures are so minor and the benefits of the provisions the Senate wants to add are so self evident, that legislators should be able to work out those differences quickly. AHGA urges all American homeowners to contact both of their U.S. Senators by email and/or telephone and urge them to support all of these measures. The phone numbers and email addresses of all U.S. Senators are available in the Congressional lookup on the AHGA website.