Garrett vs. 1.4 million Home Buyers

Live in the 5th congressional district? You can get reporting at Blog the Fifth you won’t find in your newspaper, plus context on some of the nutty, nutty things your congressman does, plus opportunities to join up with efforts to make a change there. – – – Promoted from the diaries by Rosi.

Cross posted from Blog the Fifth

Representative Scott Garrett finally explained why he voted against extending unemployment benefits and the first time home buyer tax credit:

So, in sum, we have a program rampant with fraud, which gives taxpayer dollars to people who don’t legitimately qualify, and fails to appropriately credit the individuals that do qualify. It’s clear that employees of the IRS were aware of the problems with claims process for this program, as the inspector general found 53 cases of IRS employees filing “illegal or inappropriate” claims for the credit. In its current form, this program costs taxpayer about $1 billion a month and is expected to cost $15 billion for the year. Rather than terminate this program, Congress voted on November 5 to expand the program to homeowners looking to buy a replacement principle residence. How many more four-year olds will fraudulently receive taxpayer money under this program before Congress realizes this is a terrible idea?

Voting to expand this program would have been irresponsible of me, and an abdication of my responsibility as a guardian of taxpayer dollars. The Homebuyer Tax Credit Program was a poison pill to otherwise well-intended legislation.

It bears repeating that Garrett was one of 2.7% of the House to vote no on this bill, so it hardly was a poison pill.

It also bears repeating that Garrett has never stood up with the same conviction regarding funds going to fraud in Iraq, which has funded those who kill our troops.

Garrett gave a number of stats that, while far from ideal, pale in comparison to the good the program has done.  From the Gazette, here are the numbers that were largely reported (bolding Garrett):

19,300 electronically filed 2008 tax returns where people claimed the First-Time Homebuyer Credit, yet had not purchased a house, claiming that they intended to do so in the future. Cost to the taxpayer: $139 million.

74,000 credit claims by filers who it was later determined weren’t first-time homebuyers. Cost to the taxpayer: $500 million.

580 taxpayers younger than 18 years of age who claimed First-Time Homebuyer Credits; the youngest of whom was a four-year old. Cost to the taxpayer: $4 million.

3,200 individuals claiming credits thought to be alien residents, which are prohibited from receiving most Federal public benefits. Cost to the taxpayer: $20.8 million.

It’s unfortunate to see that if you add all the numbers together that roughly 6.5% of claims were fraudulent.  However, the IRS is pursuing criminal investigations and suspending rebates, so those folks will be dealt with in time.

In the meantime, it also means that 93.5% of the submissions appear to be valid, which means roughly 1.4 million new homeowners have been helped by the program.

Garrett’s statement explaining his vote against the bill is nothing more than a spotty claim to righteousness that makes the perfect the enemy of the good.  Garrett seems to want to poison the discussion by ignoring the good the program has done, as well as the measures being taken to correct the program.  That’s a disservice to constituents and all of the home buyers and sellers within the district who benefit from the program.

Comments (6)

  1. princetonblue

    I can’t believe I’m agreeing with Garrett, but most economists agree that the home buyer’s tax credit is not a good idea.  It’s a very populist plan, and the real estate industry pushed for it, but it’s essentially a gift to home sellers and mortgage-holding banks with little direct effect on the economy.   There are better, more progressive ways to get the economy moving again.

    Reply

Leave a Comment

Your email address will not be published. Required fields are marked *