This vote was on whether to allow an amendment that would have repealed the current $8,000 tax credit for first-time homebuyers with a new $15,000 tax credit for the purchase of a principal residence. The amendment was offered to a bill that would add $2 billion to the popular “Cash for Clunkers” program, which gives vouchers to people to trade in older, less fuel-efficient cars for newer, more fuel-efficient ones.
Isakson said the $8,000 homebuyer tax credit, which was put into place in 2008, has worked well and that entry-level housing has begun to recover. He said his amendment would build upon that success by bumping up the amount of the tax credit and expanding the base of people that are eligible for it.
“Right now we are stagnant. The problem is not with first-time buyers. It is with move-up buyers. It is the fellow who has transferred from Atlanta, GA to Hartford, CT who can’t sell the house in Atlanta because there is no buyer for it and can’t buy a house in Connecticut because he doesn’t have the equity out of Atlanta. This tax credit does not take other people’s tax money and give it to you to buy a house. It gives you a credit against the taxes that you owe. Rather than buying a depreciable asset such as a car, you are buying an appreciable asset such as real estate. It has a multiplier effect,” Isakson said.
Debbie Stabenow, D-Mich., said she supports expanding the first-time homebuyers tax credit, but not added to the Cash for Clunkers bill.
“The reality is, if we were to adopt this amendment to help those who are interested in buying a home, we would hurt people who need to buy an automobile and the stimulus that has worked so well, so quickly. So I would ask for a “no” vote on this particular amendment simply because, at this point in time, we know what this is all about. Let’s face it. We know what is happening here. Those who are opposed to the underlying bill, … know if there are any amendments that are adopted, then the entire program will be ended. It will be done,” Stabenow said.
Carl Levin, D-Mich., then made a parliamentary maneuver to defeat the amendment on the grounds that it violated the Senate’s rules on spending practices. Isakson then called a vote to waive the rules for his amendment, which is what this vote was on.
By a vote of 47-50, the waiver motion was rejected. All but one Republican present voted for the motion. Of Democrats present, eight voted for the motion and 47 voted against it, including the most progressive members. The end result is that the motion to waive the rules was defeated, Isakson’s amendment was defeated with a parliamentary maneuver, and the bill went forward without language that would have replaced the $8,000 first-time homebuyer tax credit with a $15,000 principal residence tax credit.