Recovery and reinvestment

The American Recovery and Reinvestment Act, passed Friday by both houses of Congress, runs 1,041 pages long and is described as a $787 billion economic stimulus package. One thing it doesn't have is a full $15,000 home buyer tax credit sought by industry groups, including the National Lumber and Building Material Dealers Association (NLBMDA).

The NLBMDA's president and CEO Michael O’Brien issued a statement Monday, explaining the positive and negative aspects of the act:

"We are pleased that NLBMDA-supported tax provisions, which extend bonus depreciation, Section 179 direct expensing and energy efficient tax credits, among others, were adopted in the final conference report. However, we are disappointed that Congress did not adopt the more robust $15,000 home buyer tax credit, limited the application of the net operating loss carryback provision, and rejected an amendment to provide 4 percent mortgage financing under certain circumstances."

Under the package, first-time home buyers would receive an $8,000 tax credit, which they would not have to pay back to the government. An earlier version of the bill called for a $15,000 credit.

As for net operating loss carrybacks, the final act includes the provision for companies with revenues under $5 million, and it will only apply to losses accumulated in 2008. The carryback provision allows companies to convert losses into tax refunds. The final version's weakened carryback provision disappointed big builders, particularly.

Still, the Congressional Budget Office says the act could create 800,000 to 2.3 million jobs by the end of 2009 and 1.2 million to 3.6 million by the end of 2010.

The NLBMDA's chairman Paul Hylbert, CEO of ProBuild Holdings, added his own prepared statement: “We will continue to work with Congress, the administration, our housing industry allies and our members to achieve an effective housing recovery plan as soon as possible so that we can develop, once again, a robust and vibrant housing market as a critical element of a strong economy.”