By a vote of 215 to 210, the House of Representatives passed a one-year budget enforcement resolution. While it is rare in election years for the House to pass a full budget resolution, the urgency of the fiscal situation in the nation caused the House to pass the one-year plan.

House Budget Chair John Spratt Jr. (D-SC) drafted the plan. He stated, "I am pleased to be introducing the budget enforcement resolution for fiscal year 2011. This resolution sets an overall limit of $1.12 trillion on discretionary spending in next year's appropriations bills. This limit is well below the comparable request made by the President and $3 billion below the resolution approved by the Senate Budget Committee."

The comments by Rep. Spratt follow observations during the budget committee hearings by Congressional Budget Office Director Douglas Elmendorf. He indicated that it would not be possible in a fiscally responsible manner to extend the 2001 and 2003 tax cuts for middle-income Americans. In response to his comments, House Majority Leader Steny Hoyer (D-MD) suggested that the middle-class tax cuts enacted in 2001 and 2003 could be extended for one year.

The Ranking Republican on the House Budget Committee is Rep. Paul Ryan (R-WI). He noted, "This Congress has failed to even produce a budget and it has refused to consider the tough choices to deal with our massive debt burdens – a debt burden growing exponentially larger with each kick of the can further down the road."

In addition to the limit of $1.12 trillion for discretionary programs, the budget resolution reaffirms the "pay-go" rules that are designed to require any additional tax reductions to be offset with tax increases. The resolution also states that the national debt-to-gross domestic product ratio needs "to be stabilized once the economy recovers."

Editor's Note: With the increase in expenditures and reduced taxes during the past two years, the government debt as a percentage of the economy has increased substantially. The passage of the one-year budget resolution is a small step toward stabilizing our national finances.


Home Buyer Tax Credit Extended to September 30th

With the sharp decline in home values and an increasing number of foreclosures, Congress created a temporary tax credit for first-time buyers of $8,000 and for other purchasers of new homes of $6,500. In order to qualify for the credit, it was necessary to have a signed contract for purchase by April 30, 2010. The initial deadline for closing contracts signed on or before that date was June 30.

Because many home purchasers could not meet this deadline, the House and Senate have passed the Home Buyer Assistance and Improvement Act of 2010 (H.R. 5623). This bill extends the time for closing from June 30 to September 30.

Chief Economist of the National Association of Realtors Lawrence Yun indicated that this extension of the deadline would be very important. He noted that about "180,000 homebuyers who signed a contract in good faith to receive the tax credit may not be able to finalize by the end of June due to delays in the mortgage process, particularly for short sales."

These individuals with contracts by April 30 will now be able to close by September 30 and receive their tax credits.

Editor's Note: When the tax credit lapsed for new purchases in May, housing sales declined significantly. Congress hopes that extending the deadline to close and benefit from the credit will help the housing recovery to continue.