The popular and widely successful tax credit for first-time homebuyers is being pushed by senior Democrats in the Senate to bring a plan to a vote that would extend the new homebuyers tax credit for another year while at the same time slowly phasing it out during that extension period.
Majority Leader Harry Reid, D-Nev., and Senate Finance Committee Chairman Max Baucus, D-Mont., proposed this extension which expires on November 30th. Their hope is to extend it through March 31st while during the next subsequent three quarters of 2010 its value would drop by $2,000 for each quarter.
The vote may take place in Senate as early as this week, and the plan appears to be aimed at countering a far more expensive $17 billion bipartisan plan that would extend the credit through June 30, 2010 while its value would remain at $8,000. Furthermore, the bipartisan plan would increase the income cap for eligibility as well as opening up the credit to all buyers and not just first-time homebuyers only.
Some Senators are also trying to couple the homebuyer tax credit extension to another piece of legislation that would extend unemployment benefits by up to an additional 20 weeks. The unemployment benefits bill may face a key test vote as early as today.
There have been some tax credit supporters that have been outspoken and have said that the credit has helped revive the ailing housing market and they feel that if the credit would not be allowed to be extended beyond the November 30th deadline that home sales would drop off dramatically.
Senator Reid tried to schedule a vote on other competing measures yesterday but Senate Republican Mitch McConnell of Kentucky, who is demanding votes on other unrelated GOP proposals, blocked that initiative.