Strong bipartisan majority approves two measures designed to spur economy
WASHINGTON – U.S. Rep. Gabrielle Giffords today voted with a strong bipartisan majority in the House to extend both unemployment compensation benefits and a credit for first-time homebuyers.
“With Arizona having a 9.1 percent unemployment rate and the nation’s second-highest foreclosure rate, both of these extensions are crucial,” said Giffords. “The credit for homebuyers will provide badly needed assistance to the struggling construction and real estate sectors of the state’s economy.”
The measures, widely viewed as critical to the economic recovery, were included in legislation that was approved in a 403-to-12 House vote. The Worker, Homeownership and Business Assistance Act of 2009, H.R. 3548, now goes to President Obama for his signature. A similar bill passed the Senate on Wednesday.
The Worker, Homeownership and Business Assistance Act would extend unemployment insurance by up to 14 weeks for jobless workers and extend benefits for six additional weeks for workers in states, including Arizona, with unemployment levels over 8.5 percent. Arizona’s 9.1 percent unemployment rate is the nation’s 22nd highest.
The maximum unemployment benefit in Arizona is $240 per week – less than the national average of about $300 per week.
The 14-week extension would supplement the 26 weeks of benefits Arizona offers and the federally funded extensions of up to 53 weeks that Congress approved in legislation last year and in the stimulus bill enacted in February.
The extension is estimated to cost $2.4 billion over 10 years. The cost will be fully paid by an extension, until June 30, 2011, of the Federal Unemployment Tax Act.
“Extending unemployment benefits is one of the most cost-effective and fast-acting ways to stimulate the economy because the money is spent quickly,” Giffords said. “The legislation we passed today is a real win-win for Arizona – we are helping the unemployed and businesses get through these difficult times.”
The bill also extends expiration of the First-Time Homebuyer Tax Credit. The credit now is scheduled to end Dec. 1, but that would be extended to April 30, 2010 under the bill approved today.
For home purchases made after Jan. 1, 2009, the tax credit is equal to $8,000 or 10 percent of the purchase price of the home, whichever is less. The credit must be repaid if the home is sold within three years.
The extension would cover homes that are under a binding contract before April 30, 2010, allowing an additional 60 days to close.
The extension was strongly supported by the National Association of Realtors, which said the credit is responsible for stabilizing housing prices.
There now is a 7.8 month supply of housing on the market – close to the six-month supply that is considered a “normal” housing inventory reflecting a stable market, the Realtors said. “We strongly believe that we are within sight of a ‘normal’ market,” the Realtors association said in a statement.
From July through September, there were 50,342 home foreclosures filed in Arizona, according to RealtyTrac. Arizona’s rate of one foreclosure for every 53 homes is the second-highest in the nation, trailing only Nevada.