This week, House and Senate Congressional leaders completed the process of formally selecting appointees to the newly established Joint Select Committee on Deficit Reduction, which is charged with developing at least $1.2 trillion in budget cuts over the next decade.
The new “super committee” is comprised of a total of 12 Representatives and Senators, appointed by Senate Majority Leader Harry Reid (D-NV), House Speaker John Boehner (R-OH), Senate Minority Leader Mitch McConnell (R-KY) and House Minority Leader Nancy Pelosi (D-CA). Appointees include:
• Senate Democratic Appointees: Sens. Patty Murray (D-WA) (co-chair), Max Baucus (D-MT) and John Kerry (D-MA)
• Senate Republican Appointees: Sens. John Kyl (R-AZ), Rob Portman (R-OH) and Pat Toomey (R-PA)
• House Republican Appointees: Reps. Jeb Hensarling (R-TX) (co-chair), Dave Camp (R-MI) and Fred Upton (R-MI)
• House Democratic Appointees: Reps. Xavier Becerra (D-CA), James Clyburn (D-SC) and Chris Van Hollen (D-MD).
Many of those selected to the committee have significant experience working on a bipartisan basis and ten of the 12 selected have served at least 20 years in Congress.
New focus was brought upon the committee in the wake of Standard and Poor’s downgrade of America’s credit rating and subsequent tumble of stock prices. While the committee has a deadline of November 23 to develop its debt reduction plan (Congress must vote on the measure by December 23), significant pressure is building for a plan to be ratified as soon as possible.
The committee will be looking at ways to cut spending and raise revenue. At potential risk of elimination are several tax provisions of key concern to the manufactured housing industry, including:
• New Energy Efficient Home Credit (IRC 45L): manufacturers that build Energy Star-rated homes are eligible to receive a $1,000 tax credit while modular home builders are eligible to receive a $2,000 tax credit by exceeding the International Energy Conservation Code (IECC) by 50 percent. The credit is set to expire in December of 2011.
• Treatment of Carried Interest: Carried Interest allows real estate investment trusts, private-equity firms and other partnerships to pay tax rates that are lower than the rates on ordinary income. An increase in the tax treatment could potentially impact those communities held in trust.
• Mortgage Interest Deduction: Despite its popularity among homeowners, real estate agents, and builders, talk is building on Capitol Hill and in policy circles of scaling back or eliminating the mortgage-interest tax deduction.
