Last week, after a bipartisan agreement to move forward, the U.S. Senate began working on legislation that provides relief to those struggling through the current housing slump. This represents a positive development for families in Mississippi and across the country who are fighting to hold on to their homes.
The legislation, which the Senate should finish this week, provides help for those in need without providing a government bailout. The bipartisan plan calls for refinancing help for families suffering from unaffordable subprime loans and additional funding for counseling to help troubled homeowners avoid foreclosure. In addition, tax credits would be provided to new homeowners who purchase homes that are subject to foreclosure, helping stabilize home values for everyone.
HOUSING A NATIONWIDE CHALLENGE
While our economy continues to grow, anxiety over the housing market has slowed the robust economic growth we experienced over the past several years. These fears, in addition to higher gasoline and grocery prices, are leading many to close their pocketbooks, thus slowing the rate of economic growth.
The situation is similar in Mississippi, which has received mixed economic news. Last week we learned that the state’s unemployment rate dropped to 5.9 percent from 6.4 percent. However, the housing slump is also affecting our state. Mississippi currently ranks above all other states in the rate of mortgage payments past due. Coupled with skyrocketing insurance rates, many Mississippi families face the possibility of losing their homes.
PUSH FOR KATRINA ASSISTANCE
In addition to the refinancing funding, counseling funding, and tax credits to help move foreclosed properties off the market, this legislation represents an opportunity to provide additional assistance to Gulf Coast reconstruction efforts. To assist with rebuilding, I offered an amendment to this legislation, cosponsored by Sen. Thad Cochran, to extend tax credits included in the 2005 GO Zone legislation. The Wicker/Cochran GO Zone extension provision was approved during debate last week as part of a broader amendment to the housing legislation, and is now part of the larger bill I hope the Senate finishes this week.
Our provision is aimed at spurring construction along the Gulf Coast. Currently, the commencement date for construction eligible for the bonus depreciation portion of the GO Zone legislation is December 31, 2007. Environmental and bureaucratic delays made it impossible for many who want to rebuild to begin doing so by the December 31, 2007, deadline. Our provision drops that commencement date to allow those still wanting to rebuild to take advantage of the GO Zone legislation’s incentives.
BIPARTISAN ACTION NEEDED
The housing issues facing Mississippi and the rest of the country are challenges that need to be addressed. This year, Congress has shown the ability to put aside political differences in order to achieve bipartisan success. I am optimistic we can do the same when addressing the housing issue and find a solution that provides help for those in need without rewarding bad decisions made by investors and speculators.