Republican candidates offer few details on housing and foreclosure
By Brian A. Bernardoni
As we all know, the devil is in the details, especially in real estate. In the second of two articles on the housing policies and the 2008 presidential campaign, let’s take a look at the top two Republican candidates and where they stand on real estate related issues.
Some say that “all politics (and real estate) is local.” If that is the case, then presidents set the tone, and the two Republican candidates clearly have the nation’s attention. While it seems likely that Sen. John McCain (R-Arizona) will win the Republican nomination, in an attempt to be fair, we reviewed the positions of both McCain and former Arkansas Governor Mike Huckabee (R-Arkansas) to see what the future might bring should they seize the White House in November. Supporters of Ron Paul will be disappointed, as mathematically he is out, at least for now.
First, let’s start with the bad news. Both Mike Huckabee and John McCain say very little about foreclosures and even less about reviving the housing market. However, they both have plans for stimulating the economy.
Stimulating the Economy
Should John McCain win in November, in 2009, his economic plan would cut taxes on the middle class and further seek legislation to require a 3/5 majority vote in Congress to raise taxes. McCain would also lower the Corporate Tax Rate from 35 percent to 25 percent and would make the Research and Development Tax Credit permanent. In addition, he would maintain the current rates on dividends and capital gains and would allow for the expensing of equipment and technology investments.
McCain would permanently repeal the Alternative Minimum Tax and would make the Bush income and investment tax cuts permanent. In order to finance his plan, he offers reforms and the reduction of spending. Realtors should be happy that McCain wants to ban internet and cell phone taxes.
Huckabee supports a Fair Tax, which would be a national retail sales tax as a replacement for federal income and payroll taxes. In the proposal, a monthly rebate will offset the tax on purchases up to the poverty line. This simple effort would also repeal corporate taxes and essentially dismantle the IRS. In the Fair Tax, only purchases of new goods would be taxed.
The rebate is an interesting concept, in that everyone will be reimbursed on purchases up to the poverty line, meaning that, in Huckabee’s words, “we’re not taxed on necessities.” Huckabee assumes prices will drop as the cost of goods will not be inflated by corporate taxes, the cost of tax compliance and also Social Security matching.
Mortgage Crisis and Foreclosure
While the Web sites for the respective candidates are light on the subject matter, both candidates (upon being pressed) have made strong comments on the subject of mortgages.
Huckabee has been consistent in opposing a mortgage bailout and wants as little government intrusion as possible in this matter. He would prefer that lenders and borrowers work together on bailouts. Huckabee insists that a market-based approach is best in dealing with foreclosure, and has indicated that the consequence of past lending problems and overreaction from the government may make lenders less willing to lend in the future. Huckabee stated on NPR that there is a “culpability on the part of the lenders and the borrowers,” who he calls “greedy” and “over ambitious” respectively.
McCain has remained consistent, as well, favoring the Bush efforts to date; however, recent comments indicate that he would like to see simpler mortgage documents and transparency in the transaction. He favors adjustments for borrowers who were eligible for better terms and has mentioned that he would like changes in the rating system institutions utilize. On foreclosure, McCain has been “cautiously optimistic” that meetings with subprime lenders and borrowers will yield positive results.
The Housing Market
On the campaign trail, McCain has made it clear that he would pursue policies to allow people to afford their own homes. His Web site, however, is light on subject matter and details. Huckabee focuses primarily on the Fair Tax plan and adds no details on housing.
Is Real Estate Critical?
The lack of details on housing begs the question: is real estate critical in the eyes of the GOP? Before I get tagged as being harsh on the lack of details on real estate and housing by the Republican frontrunners, it should be noted that both McCain and Huckabee have plans based on tax reform, a core platform of the Republican Party. If you buy into the Huckabee Fair Tax – which would make Chicago’s sales tax monstrous, especially after CTA and County Board increases – you may see some logic in the plan, and view it as a way for people who can save money to spend money on housing. McCain’s plan, which would more or less stay the course economically in respect to President Bush, invokes a similar trickle-down approach, especially if he is successful in moving his agenda through Congress.
On the Hill where the stimulus plans are crafted and passed, Realtors can be assured that the National Association of Realtors and its team of volunteers and lobbyists are keeping members abreast of the housing issues that face this country, from eminent domain to property taxes and from foreclosure to FHA Reform. While both parties have plans, Congress will ultimately have to approve one plan that will make constituents happy. The timing of such a plan is what is critical and remains an open question.
For details on what our lobbyists are proposing and pushing on the hill, visit Realtor.org, and you can reach out to me directly for details on any legislation.
The devil in the details, fellow Realtors, and your direction and participation in the process can make a difference, no matter who you vote for.
BRIAN A. BERNARDONI IS THE DIRECTOR OF GOVERNMENTAL AFFAIRS FOR THE CHICAGO ASSOCIATION OF REALTORS AND IS ALSO THE CHAIRMAN OF THE GOVERNMENTAL AFFAIRS DIRECTORS FOR THE NATIONAL ASSOCIATION OF REALTORS FOR 2007-2009. HE CAN BE REACHED AT BBERNARDONI@CHICAGOREALTOR.COM.
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