House Speaker John Boehner of Ohio, center, followed by Senate Majority Leader Harry Reid of Nev., left, and Senate Minority Leader Mitch McConnell of Ky., approaches the microphones outside the White House in Washington on Friday.
WASHINGTON -- With the House and Senate back on Capitol Hill for the lame-duck session, preliminary negotiations aimed at keeping the country from careening off the “fiscal cliff” began in earnest last week.
The big issues -- how to reduce federal spending and raise federal revenues -- are getting most of the attention. But buried in the discussions are questions that could affect millions of homeowners and buyers:
The betting among lobbyists and other analysts is that it's unlikely that Congress will be able to pull off a major rewrite of the tax code during the lame-duck session.
But reducing housing preferences will be a bruising fight. Plus any changes to the write-offs would need to be phased in over an extended period of years, given housing's important role in the economy.
Renewal of the mortgage debt forgiveness legislation may well be the most time-sensitive housing issue during the lame-duck session. If it expires at the end of the year,the IRS would treat debt cancellations as ordinary taxable income.
With several bills pending in the House and one in the Senate that would extend the program for a year or two, lobbyists say there is a slightly better-than-even chance Congress will extend the debt forgiveness provisions, unless the entire fiscal cliff negotiations implode.
Could some of the other housing issues -- energy-conservation and mortgage insurance premium deductions especially -- get sidetracked during the lame-duck session? Absolutely. Although the Senate Finance Committee approved a bipartisan bill to renew these and dozens of other tax code preferences in August, it never came to a vote in the full Senate and its fate is uncertain. Because neither of the housing extensions is weighty enough to pass on its own, they probably will need to be included in a much larger omnibus bill to survive the session.