here's the most likely scenario, I believe, and I've been told by my sources, from Concept Capital's Washington Research Group:
The key vote will be Tuesday – as we discuss in today’s calendar note – as Senators need to approve a motion to proceed to the Unemployment Insurance bill. We believe there are enough votes to pass the motion, which means the Senate will then start considering amendments. Sens. Isakson and Dodd will then offer their amendment to extend the tax credit and open it to all buyers and to raise the income cap to $300,000 adjusted gross income for joint filers from the $150,000 AGI cap now in effect.
That bill would cost nearly $17 billion, which is why we expect the amendment to be defeated.
Then Senate Majority Leader Reid and Senate Finance Committee Chairman Baucus will offer the amendment to extend the homebuyer tax credit through 2010, though it would phase out starting April 1 by $2,000 per quarter. This also would include a modified expansion of net operating loss carrybacks and be paid for with a delay in the worldwide interest allocation rules. Senators will offer many other unrelated amendments. We would expect those to be defeated.
The goal is then to pass this bill in the Senate on Wednesday so the House may approve it Thursday.
Will This Happen
This is certainly a chaotic process but our conversations continue to lead us to believe that there is a window for success this week. Our view remains unchanged since Thursday that the Reid phase-out plan is the one that will be adopted.
Senate Nears Deal on Keeping Tax Credit for Home Buyers
Published: Wednesday, 28 Oct 2009 | 5:01 PM ET Text Size By: Reuters
The Senate's top Democrat and top Republican each voiced support on Wednesday for extension of a soon-to-expire $8,000 tax credit for home buyers, but left unclear when the chamber would act.
"There has been general agreement by a significant number of senators, Democrats and Republicans, to get this done," Senate Majority Leader Harry Reid, a Democrat, said on the Senate floor.
The chamber's top Republican, Senator Mitch McConnell, also said most senators support the measure. "I certainly share his view," McConnell said.
The tax credit for first-time home buyers, which has helped lift the housing market out of its worst slump since the Great Depression, is set to expire on Nov. 30 and senators have been negotiating over how best to extend it.
Under an agreement reached by key senators, the tax credit would be extended through the end of April and be expanded to cover repeat buyers who have been in their homes at least five years, sources familiar with the plan said.
First-time buyers would continue to get an $8,000 credit, while repeat buyers of primary residences would be eligible for a credit of $6,500, the sources said.
They said the credit would be available for individuals making up to $125,000 a year and couples earning up to $225,000 per year.
Timing of a Vote Uncertain
While extending the credit enjoys widespread support, its fate is caught up in a spat between Reid and McConnell over unrelated issues.
Reid had wanted to attach a bill to extend the homebuyer credit as an amendment to legislation to lengthen insurance benefits for unemployed workers. The Senate voted to take up the insurance benefit bill on Tuesday, but did not attach the homebuyer tax credit to the measure.
Current DateTime: 02:03:03 28 Oct 2009
LinksList Documentid: 33520657
New Home Sales Post Surprise DropMortgage Applications FallSenate Vote on Home-Buyer Credit Unlikely TodayTrack the DJ Housing Index HereRealty Check with Diana Olick
Despite that apparent roadblock, Senate Finance Committee Chairman Max Baucus, who has been involved in negotiations over the tax credit, told Reuters late on Tuesday that he expected the Senate would vote on the bill sometime this week.
"There are various paths and whichever works first is the one that is going to be" followed, he said, referring to the possibility that the Senate could vote on the bill independently or as part of separate legislation.
A spokeswoman for Reid said the unemployment insurance measure could get pushed to next week as lawmakers try to resolve differences over unrelated issues, which would delay consideration of the homebuyer credit extension.
"We will get this extension passed," she said.
A report last week showed sales of previously owned homes hit a two-year high in September as buyers rushed to take advantage of the credit before its expiration date. However, a report on Wednesday showed new home sales, a much smaller segment of the market, tumbled unexpectedly last month.
Separately, a report from the Mortgage Bankers Association on Wednesday that demand for mortgages has fallen for the past three weeks as buyers move to the sidelines.
A buyer would have to close on the purchase of a home before Nov. 30 to take advantage of the current tax credit.
Home prices in 10 largest cities rise for the third straight month in August, a sign a housing recovery taking hold: Case-Schiller (story developing)
Current DateTime: 01:03:47 27 Oct 2009
LinksList Documentid: 26742256