Obama Signs Unemployment Insurance Extension, Home Buyer Credit Friday

November 6, 2009 6:53 a.m. EST

Washington, D.C. (AHN) - The House moved quickly on Thursday to pass an extension of jobless benefits and a home buyer tax credit, giving final congressional approval to a measure that had been delayed for weeks due to partisan disagreements. President Barack Obama signs the bill into law on Friday, the same day the Labor Department reports on latest unemployment numbers.

The House voted 403-12 to pass the Worker, Homeownership, and Business Assistance Act of 2009. All opposing votes came from Republicans, including Reps. Michael Burgess (R-TX), Jeff Flake (R-AZ), Scott Garrett (R-NJ), and the head of the conservative caucus, Republican Study Committee Chairman Tom Price (R-GA).

The chamber passed the measure in September by a vote of 331-83 but needed to approve amendments introduced by the Senate, which passed the bill on Wednesday by 98-0.

The legislation extends jobless benefits nationwide to 14 weeks. States with unemployment rates of 8.5 percent or higher get an additional six weeks of insurance. The extension would cost $2.4 billion, and will be paid for with an extension of the federal unemployment tax (FUTA), which proponents have pointed out the Bush administration had proposed extending last year.

Nationwide unemployment was at 26-year high of 9.8 percent in September, putting the total of unemployed since the recession began in December 2007 to 15.1 million. New jobless numbers will be released on Friday.

"Every dollar spent on unemployment benefits generates more than $1.60 in new economic demand. It's good for businesses, it's good for workers," Speaker Nancy Pelosi (D-CA) said in a floor speech before the vote.

House Republicans had warned that the bill would extend benefits for a period totaling nearly two full years, giving credence to "the concerns of noted economist Martin Feldstein, who previously testified that extended unemployment would 'create undesirable incentives for individuals to delay returning to work. That would lower earnings and total spending.' "

In the Senate, Republicans had blocked the bill and accused Democrats of not allowing any of their proposed amendments, including one seeking to prevent any assistance to the Association of Community Organizations for Reform Now (ACORN), banned several weeks ago from receiving any federal funds by lawmakers and other government agencies because of undercover videos showing some of its workers giving what appear to be illegal advice.

The legislation has a measure attached to it that expands an $8,000 tax credit for first-time home buyers that is due to expire on Dec. 1.

The National Association of Realtors had been pushing hard to extend the credit, as well as include other types of home buyers, saying the legislation has helped stabilize the housing market and raise sales, which are projected at 5.1 million this year.

The attached measure extends credit for first-time home buyers until April 30, 2010, and provides $6,500 tax credit to buyers who "move up" or "trade-in" their home for a better one, so long as they lived for at least five years in the house they are leaving.

Buyers with higher incomes can now qualify for either credit, with the earnings cap amended to $125,000 for an individual or $225,000 for a couple. The original bill phased out the $8,000 tax credit to individuals earning between $75,000 and $95,000, or $150,000 and $170,000 for couples.

The measure, championed by Sen. Johnny Isakson (R-GA), a Republican who spent decades in the real estate industry, costs $10.8 billion over ten years. It retains its limit to homes purchased for up to $800,000. Provisions strengthening the authority of the IRS to oversee the processing of credits have also been included in light of reports of rising fraudulent claims. A HUD-1 settlement statement will now be required when claiming credits.