News

November 6, 2009

UPDATE: Obama signs homebuyer, jobless bill assistance

Applicant pool of first-time buyers to grow under proposal Obama is expected to sign today.

By Andrew M. Seder aseder@timesleader.com
Times Leader Staff Writer
Andrew M. Seder on Facebook   |   @TLAndrewSeder on Twitter

4:03 p.m. UPADATE

WASHINGTON (AP) — President Barack Obama signed a $24 billion economic stimulus bill into law Friday, giving tax incentives to prospective homebuyers and additional jobless benefits to those idled by the business slump.

The bill-signing came a day after the House, displaying rare bipartisan agreement over the troubling employment picture nationally, voted 403-12 to pass the measure. The Senate had approved it unanimously on Wednesday.

The White House said the law, which also includes tax cuts for struggling businesses, builds on provisions in the $787 billion stimulus package enacted last February to avert an economic meltdown.

"The need for such a measure was made clear by the jobs report that we received this morning," Obama said, citing Friday's government report the jobless rate hit 10.2 percent last month, the highest since 1983.

He called it a "sobering number that underscores the economic challenges that lie ahead" and vowed that "I will not rest until all Americans who want work can find work."

For their part, lawmakers stressed that the fourth unemployment benefit extension in the past 18 months was necessary because initial signs of economic recovery have not been reflected in the job market.

"The truth is that long-term unemployment remains at its highest rate since we began measuring it in 1948," said House Majority Leader Steny Hoyer, D-Md. About a third of the 15 million people out of work have gone at least six months without a job.

The law provides another 14 weeks of benefits to all out-of-work people who have exhausted their benefits or will do so by the end of the year, estimated at nearly 2 million. Those in states where the jobless rate is 8.5 percent or above get an additional six weeks.

The Labor Department reported Friday that that employers shed another 190,000 jobs in October. Obama said job creation traditionally lags behind economic growth, but he acknowledged that is small comfort to those seeking work.

"So although it will take time and it will take patience, I am confident that our economy will recover," Obama said. "I'm confident that we're moving in the right direction. And I promise that I won't rest until America prospers once again."

Later, presidential spokesman Robert Gibbs sought to put the unemployment numbers in context.

"You've heard me say for months that we believe that 10 percent was going to come," Gibbs said. He said the White House is heartened by the decrease in unemployment claims and the fact that, overall, the economy is growing again.

"But I believe — I think most would tell you — that the (unemployment) rate is more likely than not to get a little worse before it gets better," Gibbs said.

The extra 20 weeks could push the maximum a person in a high unemployment state could receive to 99 weeks, the most in history. Unemployment checks generally are for about $300 a week.

The tax credits, added by the Senate, center on extending the popular $8,000 credit for first-time homebuyers that was included in the stimulus package. The credit, which was to expire at the end of this month, will be available through next June as long as the buyer signs a binding contract by the end of April.

The program is expanded to include a $6,500 credit for existing homeowners who buy a new place after living in their current residence for at least five years.

The cost of the unemployment benefit extension, about $2.4 billion, is offset by extending a federal unemployment tax that employers must pay.

___

The bill is H.R. 3548.

6:51 a.m.

President Barack Obama is expected to sign legislation today that would extend the popular first-time homebuyers’ tax credit into next year, and expand the qualified applicant pool to those who currently own homes.

The House voted 403-12 Thursday to approve the measure, which was set to expire at month’s end. The Senate did the same the day before by a 98-0 tally. The credit, which is worth 10 percent of the purchase price of a home up to a maximum of $8,000, has been deemed a success by senators and Realtors, who said the enticement has helped spur the economy and given renters a chance to secure the American dream.

Complaints by some homeowners that they were excluded from the incentive were answered by extending the credit, though only up to $6,500, to those who have owned homes at least five years. The new home must be purchased for less than $800,000 and must be occupied as a primary residence.

To qualify for the new incentive, buyers in both groups have to sign a purchase agreement by April 30, and close by June 30. The credit would be extended an additional year, until June 30, 2011, for members of the military serving outside the United States for at least 90 days.

The original incentive was part of Obama’s economic stimulus package that Congress approved in February. It required deals to be closed by Nov. 30. But its popularity helped spur members of Congress to begin extension discussions.

“This is probably the last extension,” Sen. Johnny Isakson, R-Ga., told the Associated Press. A former real estate executive, Isakson helped champion the credits.

About 1.4 million first-time homebuyers have qualified for the credit through August. The National Association of Realtors estimates that 350,000 of them would not have purchased their homes without the credit.

Darren Snyder, a broker and president of Marilyn K. Snyder Real Estate in Wilkes-Barre, praised the extension and said it will give many people who have wanted to take advantage of the offer but couldn’t a few more months to do so.

“It gives them time to save for a better down payment,” Snyder said. He said extending it to many current homeowners was also the right thing to do.

The boost the incentive has given to the struggling economy hasn’t just been to Realtors, mortgage companies and homebuyers. Those buying homes also stimulate the economy by purchasing furniture, paint, carpets and other items.

“Real estate really drives the economy,” Snyder said.

All local legislators voted in favor of the extension.

Rep. Paul Kanjorski, D-Nanticoke, praised its positive impact on the economy.

“The homebuyer tax credit has first and foremost provided a valuable resource for many individuals and families to help them to buy a home for the first time, as long as they have the financial means to afford it.

“It has also helped stimulate our economy by encouraging responsible investments in a part of the market that was deeply affected by our country’s financial problems,” Kanjorski said.

Tweet	Follow @TLnews