National Association of Home Builders leadership, learning late this past Friday that efforts to work in support of the Republican-led House on its tax reform framework had failed to gain traction on a pro-housing and homeownership linchpin, abruptly withdrew its blessing of the process on Saturday.
Instead, the NAHB has shifted back into ranks with other real estate trade groups who oppose the tax reform proposal expected to come to light to the broader Capitol Hill legislative community this week.
"All the resources we were going to put into supporting are now going to go into opposing the plan," NAHB Chief Executive Officer Jerry Howard told Politico staffer Lorraine Woellert.
And NAHB Chairman Granger MacDonald came out with a statement over the weekend on the association's new position on Republican efforts on a plan, which he says, "effectively abandons the nation’s long-standing commitment to housing."
“Lawmakers missed a golden opportunity to give the American people a tax reform package that would boost middle-class families and promote greater housing opportunity for Americans across the economic spectrum.
“This plan is particularly disappointing, given that the nation’s home builders warned that the proposal would severely diminish the effectiveness of the mortgage interest deduction and presented alternative policies that would retain an effective housing tax incentive in the tax code."
At issue is the fact that Republican lawmakers look at the mortgage interest deduction as an opportunity to claw back government spending to fund its huge annual revenue losses after proposed tax cuts for individuals and companies. By almost doubling the standard deduction and eliminating personal exemptions, and repealing state and local tax deduct-ability, the mortgage interest deduction would lose relevance for all but the wealthy. Wall Street Journal staffer Richard Rubin writes:
According to estimates from the Tax Policy Center—which includes assumptions about blanks left in the House GOP plan—the current Republican framework would leave 4% of taxpayers claiming the mortgage-interest deduction, down from 21% today.
House Ways and Means Committee Chair Kevin Brady had given support to a new tax credit--proposed by groups including the NAHB--that would combine local real estate taxes with mortgage interest, but that didn't fly with House leadership, and Speaker Paul Ryan broke the news to the NAHB's Howard.
"I don’t think it's fair of the speaker to take a concept that his own committee chair is in favor of and deep-six it without vetting it with the conference," Howard said (to Politico's Woellert).
"He told me there wasn’t enough time and the concept would not be put into the document," Howard said. "I told the speaker candidly we had shopped the proposal to the White House and we had support there."
Now, the NAHB is back in lockstep with the National Association of Realtors in opposition to the legislative effort, along with other housing and mortgage trade groups. As a draft of the legislation focuses on the measures it will take for lawmakers to pay for cuts to individuals' and corporations' taxes, fissures are springing up that could prevent the tax reform proposal from getting the support it needs to advance to its next stage of consideration.
