Construction industry groups have supported the tax provisions., which are aimed at giving a boost to the economy. The measure does not include any additional infrastructure spending, however.
The Senate is slated to have a procedural vote at 5 pm Nov. 2 to block a filibuster on the legislation. If Majority Leader Harry Reid (D-Nev.) wins that vote to cut off debate, the legislation can move relatively swiftly. Unless extended, the ARRA provisions will expire soon.
Here are the elements of the legislation:
--a 14-week extension of unemployment insurance plus a further six weeks of payments for the unemployed in states whose jobless rates exceed 8.5%.
--expand ARRA's five-year, net-operating-loss carry back provision to all businesses. ARRA limits the carry back to companies whose gross receipts don't exceed $15 millionThe new provision also would allow small businesses to choose to carry back losses from 2009--ARRA only permits carrying back losses through 2008.
--extending the home buyers' tax credit--now set to expire Nov. 30--to cover housing contracts signed through April 30 and sales closing through June 30. The maximum income levels to qualify for the credit would be boosted to $125,000 for individuals, from the current cap of $75,000. The maximum for couples also would rise, to $225,000, from $125,000 now. For first-time home buyers, the credit would remain at the $8,000 provided in the American Recovery and Reinvestment Act.
The plan also would expand the credit to anyone who has lived in his or her current home for at least five years and seeks to move up to another home. Those purchasers would get a credit of $6,500. They would be subject to the same income limits as first-time buyers would.
Treasury Secretary Timothy Geithner and Housing and Urban Development Secretary Shaun Donovan issued a statement on Oct. 29 that welcomed congressional efforts to extend the first-time home purchasers' credit "for a limited time." They didn't specify how long; nor did they say anything about broadening the credit beyond first-time buyers.
But Senate banking committee Chairman Christopher Dodd (D-Conn.) said, "My guess is the President will sign it."
Sen. Johnny Isakson (R-Ga.), a key player in working out the deal, "This is the last extension of the home buyers' tax credit." Isakson, former president of a major residential real-estate brokerage, said that "tax credits like this only work by creating the sense of urgency to take advantage of it and bring the market back."
Dodd said housing "is always the critical component in economic recovery." He cited a 3% decline in home sales in September, compared with August's level and said that with the current credit set to expire on Nov. 30, "the effectiveness of that program was beginning to slip."
Jerry Howard, president and CEO of the National Association of Home Builders, issued a statement on Oct. 28 calling on Congress to continue and expand the housing credit. Howard said, "Failure to act now could derail the fragile housing recovery even before it has time to take root. The consequences would be devastating for both housing and the economy."