In any case, minimizing foreclosures alone won't revive housing. If the recession and unemployment worsen, foreclosures will increase, because people without jobs and income can't make their monthly payments.
The best way to limit foreclosures is to promote an economic recovery by stimulating home buying. It's true that the recent "stimulus" plan included a tax credit of up to $8,000, but that was restricted to first-time buyers and made "refundable," meaning people could receive the money even if they didn't owe taxes. These are younger and poorer buyers — the weak credit risks of today's crisis. They won't rescue housing.
The administration and Congress, though pledging to restore economic growth, care more about protecting foreclosure victims and promoting homeownership among the young and poor. Politics trumps economics.
The GOP plan, which Cantor said would be released this week, will include changes to the tax code's provisions on gifts and capital gains, including changes that would make it easier for owners to sell investment properties, he said. The proposal will also include an idea Republicans pitched as part of the stimulus debate to give any home buyer who puts 5% down an immediate tax credit.
"There seems to be a real reluctance on the part of this administration to do anything other than help first-time buyers," the Virginia Republican said. "If we want to get this housing market back, which will get the economy moving again, you can't just look at first-time buyers."
After House GOP lawmakers voted unanimously against President Obama's $787 billion stimulus plan earlier this year, Democrats have tried to paint Republicans as a party devoid of ideas or, in their own words, "a party of no." Democrats took aim at Cantor in particular this morning in a Politico story.