LEGISLATIVE AFFAIRS: Legislative Pitfalls Ahead for Real Estate Industry If Congress Does Not Get its Act Together
Philip Weiden | August 2017
The debt ceiling is a little hard to comprehend. It is the amount of money the federal government is allowed to borrow. When the federal debt ceiling is raised it is done to pay bills that have already been incurred by the federal government. This is an important point that people fail to realize. Unfortunately, politicians of all stripes use this as a political negotiating tool.
In 2011 during negotiations, the debt ceiling was used as a tool against then President Obama and it backfired, causing the stock market to go down and interest rates to go up. On top of that, we also got a credit downgrade for the federal government—the first time that has happened in the history of the United States.
The next issue that must be dealt with by Congress by the end of September is drafting a budget for the next fiscal year. A shutdown of the federal government could very well happen. This would be bad for one major reason—the FHA could stop functioning and FHA-backed mortgages could be held up if this occurs. Congress gambled on a government shutdown in 2013 and it did not work out very well.
The National Flood Insurance Program is also being drawn up in Congress and seems to have advanced with bipartisan backing, which is a great thing. Realtors have been stressing to Congress that rates should be based on flood areas and the risk to those areas, rather than based on an arbitrary number.
NAR has also pushed back against efforts to roll back net neutrality regulations that could hurt Realtors by allowing Internet companies to charge more for better service. This could harm Realtors in their technology use and hamper their ability to use tech tools to enhance their business. Everyone should have access to equal Internet service regardless of who uses it.
Finally, the administration is now considering capping the Mortgage Interest Deduction at $500,000. This would have devastating consequences for New York. State. This has not been in any Trump Administration-released outline, but has been reported in leaks of ongoing discussions. We must put a stop to this before it happens. Keep reminding your elected officials to let Congress know how important the Mortgage Interest Deduction is for homeownership.