LABORERS’ O’SULLIVAN BLASTS SENATE
MORTGAGE AID BILL AS BUSINESS BREAK

Drawing on findings from his own union’s study, and research uncovered elsewhere, Laborers President Terry O’Sullivan has blasted the Senate’s version of the mortgage aid bill as a business boondoggle.

Speaking at a mid-April press conference called by foes of the measure--which raced through the Senate shortly before, O’Sullivan cited the $6 billion in tax breaks the legislation would give to the nation’s builders and bankers--the very people who created the sub-prime mortgage crisis and ensuing credit crunch in the first place.

“The Senate legislation gave corporations and Wall Street billions in tax breaks,” he said. “Tax breaks for corporate home builders won’t help stabilize the housing market, won’t create jobs and won’t prevent a single foreclosure. If anything, this multibillion-dollar windfall will make things worse.”

Analysis by the Laborers shows the nation’s top homebuilders would be big beneficiaries from the Senate’s measure. That includes some who lent money to non-credit-worthy borrowers, using the “sub-prime” mortgages with low introductory rates and “reset” provisions that drastically raised interest and payments.

Their key break in the bill would let them apply their losses from this year and last to the tax payments they made before then on their profits, costing the Treasury billions.

Meanwhile the Senate-passed measure gives homeowners about to lose their mortgages and homes no help, but it gives a $7,000 repayable tax credit to new buyers of foreclosed homes. It also authorizes, but does not actually dole out, millions of dollars to cities and towns hard hit by the foreclosure crisis--such as Cleveland and Detroit--to buy and maintain foreclosed properties.

The New York Times reported that bankers and builders would not be the only profiteers from the Senate mortgage bill. It said provisions affecting alterative minimum tax credits for corporations, inserted by Sens. Debbie Stabenow (D-Mich.) and George Voinovich (R-Ohio) could yield millions of dollars to airlines and $40 million to each of Detroit’s ailing “Big Three” auto companies.

Right now the airlines and car firms can’t take credits for past corporate alternative minimum taxes--because they’re hemorrhaging money. The provision would let them take the credits even if they don’t owe any taxes.

The tax-writing House Ways and Means Committee started work on its own version of the mortgage bill during the week of April 21, and the first thing it did--at the request of Chairman Charles Rangel (D-N.Y.), was to strip out the corporate tax breaks.

It also plans to heavily rewrite the bill to aid the half-million or so families who face foreclosure on their homes this year due to the sub-prime mortgage crisis.

The Laborers’ analysis of the benefits of the bill for the builders and bankers can be found on the union’s website, www.liuna.org.