The U.S. Senate Tuesday voted overwhelmingly to proceed on a bill tackling the nation's housing market crisis with a range of tax breaks for corporations and some help for homeowners, even as the Bush Administration said it won't support the bill.
Final Senate action on the measure, which has a long list of possible amendments pending and is estimated to cost as much as $20 billion, was likely this week.
The bill easily surpassed the 60 votes needed for the Tuesday test vote, winning broad bipartisan support from 92 senators.
Montana Democratic Sen. Max Baucus, a supporter of the bill, said it "would help homeowners, homebuyers and homebuilders." The legislation faces opposition from the Bush administration.
The White House called the bill too costly and raised questions about key provisions including a tax break for buyers of foreclosed homes.
The Senate bill would give a $6 billion tax break to home builders and other businesses by extending a rule letting them count current losses against taxes from prior profitable years.
In place for 2008 and 2009 only, the rule would allow loss carry-backs for four years instead of the current two years.
"This loss carry-back is simply a gift" to home builders and other companies, said Sen. Judd Gregg, a New Hampshire Republican, in Senate floor debate. "There's no reason we should be stepping up with this special gift to that part of our economy," he said.
The bill would also let money-losing corporations accelerate their use of certain accumulated tax credits to make new business investments.
It would raise the limit on the size of loans that may be insured by the Federal Housing Administration to $550,000, while setting up a $7,000 tax credit, spread over two years, for buyers of homes in or near foreclosure.
The bill would allow issuance of $10 billion more in tax-free revenue bonds to help borrowers refinance their mortgages, and give all home owners who pay property taxes a standard deduction of $500 for single filers and $1,000 for joint filers.
At present, only taxpayers who itemize may deduct state and local property taxes.
Finally, the bill would direct $4 billion in federal grant money to communities to buy and fix up foreclosed homes, while devoting $100 million in federal money to debt counseling.
White House: 'Serious Concerns' About Bill
President Bush cannot support a homeowner rescue bill drafted by U.S. Senate lawmakers because it contains too many costly and extraneous elements, his spokeswoman said Tuesday.
Specifically, the White House rejects provisions that would give a tax break to buyers of foreclosed homes and provide other tax breaks, said White House spokeswoman Dana Perino.
"We have serious concerns that these elements and others would do little to help homeowners avoid foreclosure or reduce housing inventory," Perino said.
The legislation is being debated in the Senate this week and could face a vote on Tuesday or Wednesday.
The bill was a compromise between Democrats and Republicans who are facing pressure to staunch the flow of home foreclosures that could be pushing the national economy into a recession.
The U.S. House of Representatives is due to take up its own version of a housing aid bill in coming days.
If the president opposes the measures drafted on Capitol Hill, lawmakers will need more votes of support to override any veto.