Mortgage interest deduction — safe for now
The National Commission on Fiscal Responsibility and Reform — a task force put together by President Barack Obama — on Friday decided against sending a national budget reduction plan to Congress.
The budget reduction report, which was to save $4 trillion over 10 years, would have been presented to Congress if 14 of the 18 members on the commission approved of it. The final vote — 11 for the plan and 7 against — was just enough to keep the report from being taken up by Congress for consideration. Click here if you’d like to review the 66-page report, which was released Dec. 1.
According to Bloomberg News, the items contained in the report include a recommendation to increase taxes $1 trillion by 2020 by scaling back or eliminating hundreds of tax deductions, exclusions and credits such as those letting homeowners write off interest on their mortgage payments. The plan also called for cutting Social Security benefits, raising the gas tax by 15 cents, reducing discretionary spending by $1.6 trillion and cut Medicare by more than $400 billion.
Perhaps the most controversial proposal in the report was a measure to reduce the mortgage interest deduction (MID) for people purchasing homes. That suggestion got the National Association of Realtors (NAR) hopping mad. You can read about the NAR’s attempts to rally its 1.1 million members against the proposal by clicking here.
What, exactly, was the proposal that got the NAR so up in arms? A measure turning the deduction into a 12 percent credit available to all home owners, rather than the current deduction that is tied to income. The mortgage size was to be capped at $500,000 and interest on mortgages for second homes and on home equity loans wouldn’t be eligible.
First Arkansas News has followed this story since Nov. 21 and will continue to do so.
Benton resident. Rogue journalist. Recovering attorney. Email = Ethan@FirstArkansasNews.net.