Today's cloture vote to end the filibuster on the Tax Extenders Bill has failed to pass. The Tax Extenders Bill includes provisions to extend the Home Buyer Tax Credit time to close eligible purchase contracts from June 30 to September 30 and to extend unemployment benefits.
Most reports indicate that this means the end of the efforts to extend the home buyer tax credit.
The flood insurance program extension had also been part of the Tax Extenders Bill. Earlier this week the House separated flood insurance so that flood insurance can be moved forward without the burden of the other provisions in the Tax Extenders bill. Click here see note for June 23 update.
Unemployment insurance, less directly related to housing, is a big part of this bill that will not be passed. With unemployment rising each week, and more devastatingly, long term unemployment a high levels - almost 7 million. The economy needs these families to be able to survive. Indications are that unemployment may be considered with upcoming legislation for small businesses, but it is possible that efforts to extend unemployment insurance coverage will not be continued.
(Update - Lane Bailey in a comment below provided this link to studies about the impact of extended unemployment on job searches.)
Rural Development Guarantee Program is suffering from inaction, as far as I can tell. Local Rural Develoment departments are issuing conditional guarantees, with a higher funding fee. This is in anticipation that Congress will soon refund the Guarantee program, but with higher funding fees.
Some lenders are accepting loans applications for Rural Development loans. We are still, at this time, offering USDA Rural Development home financing under the conditional guarantee.
Congressional inaction on funding Rural Housing and on the Flood Insurance program is unforgiveable. Failure to pass the provision to extend the Home Buyer Tax credit closing date and unemployment insurance period is hurtful for millions.
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Richard Smith |
American Acceptance Mortgage, Inc |
FHA, VA, Rural Development, Conventional, Jumbo,
Reverse Mortgages, FHA 203k Renovation
Home financing in Tennessee and Georgia.
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Richard Smith Conventional, FHA, FHA 203k, HUD $100 down purchases, VA, Jumbo VA, Rural Development, Jumbo, FannieMae Homepath, Home Equity Line of Credit (HELOC). |
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This blog represents the opinions of Richard Smith. The posts and comments written on the blog do not represent the opinions or positions of Stearns Lending, Inc. |
Studies have shown that when extensions to unemployment are discontinued, employment begins to rise...
Maybe that plan will work this time. So far though - not so good.
Do you have links to the studies about the impact of unemployment extensions and changes in actual employment?
Here are a few... I Googled 'extended unemployment benefits effects of employment study' without quotes. There are a couple of items quoted that connect the end of benefits with jobs being found... and a few other points.
Lane,
I had asked this question about studies on the effects of unemployment benefits on job searches to discussion list I participate in, to see if there are adverse economic benefits to unemployment benefits. They provided a couple surveys with similar findings- I do like this summary you provided. And will look it over more closely. And post it to the referenced discussion group.
I hope this report is correct, that the jobs are there and we have just kept people from accepting them because we have paid unemployment benefits.
With this information I look for our unemployment figures to improve very soon.
Why do you think that the harmful impact of unemployment benefits is not part of the debate over whether to extend benefits? All I have heard is that we need to balance the deficit and cannot afford these benefits.
I am adding the survey to the actual post. Thanks.
Richard... I think that the problem isn't as much the cost of the benefits adding to the deficit as it is pushing people back into being productive... (Let's call it 'tough love politics'). Instead of spending money to support those people, they generate money and revenue. But that also decreases the power of government.
I just have not heard the argument during the political debates that unemployment benefits should not be extended because it keeps people unemployed. Only that we cannot add further to the deficit.
I still have not looked closely at the studies - I have been out of town and not had time. But I am not sure that 6.8 million people are unemployed over 6 months because they had extended benefits.
I'm not one to argue with the results of objective studies, and the summary you posted is recent, but we are dealing with a lot of unemployed and underemployed people.
It will be nice if this tough love pushed unemployment down quickly.
Richard, can you imagine a politician standing in front of the cameras and saying "I am against these extensions because a bunch of lazy bums will just soak up some more 'special vacation time' until they absolutey HAVE to go back to work. I say better sooner than later." I don't see it happening... and that is the basic idea.
Good point, though I really do not think the reason they held up unemployment benefits extension has anything to do with its help or harm to the economy or to employment in general. We will see what happens if the bill is put forward on its own merit. I have not heard any of these studies be part of the debate, of course unemployment, tax credit, and flood insurance were only minor additions to the larger bill.
Maybe we can then get a debate about what to do with unemployment benefits. How to make them work and how long they should be based on data and objective studies.