I'm a big fan of horror movies, but Congressional action on the first-time homebuyer tax credit is starting to get too scary for even me.
This tax break has become a combination Frankenstein and zombie of tax laws. When first created in 2008, it wasn't really a credit (although lawmakers called it that), but a $7,500 interest-free loan. The next year it became a real credit and was increased to $8,000. Then it was extended into 2010. And people who weren't actually first-time homebuyers were included to the tune of a $6,500 tax credit.
And today, the date when the credit should be finished, it just won't die.
In order for home purchasers to get the tax credit, they had to have signed a contract by April 30 and close on the home today, June 30. With that deadline bearing down, the House and Senate yesterday got busy on extending the settlement deadline through Sept. 30.
The House actually passed a bill authorizing the three-month extension. The Senate late last night came up with their own bill that has the same Sept. 30 final (really, they mean it this time!) closing deadline.
There are two problems, however, before this can happen.
First, the Senate bill is part of a measure that includes continuation of unemployment compensation. The House defeated such a proposal yesterday, but reportedly will take up the measure again today.
But more daunting is getting the Senate bill through that legislative body. Right now there's only a new bill, cobbled together by Majority Leader Harry Reid, D-Nev., and Senate Finance Committee Chairman Max Baucus, D-Mont. They've got to get that bill before their colleague and then get it passed.
If and when that happens, then the House and Senate bills will have to be reconciled.
Things, however, are looking better for the zombie tax credit that haunts lawmakers. I'm betting they'll work something out, if not today then soon.
The reason for my prediction? Representatives and senators will face their own scary movie if they don't do the bidding of the housing and real estate industries. It's a midterm election year horror flick called, "The Mysterious Disappearance of Campaign Contributions."