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Corporate interests shouldn't hijack homeowners' relief bill

Much has been made of Barack Obama's comments about people in Pennsylvania's small towns being bitter. Hoping to slow his momentum, Sen. Hillary Clinton has used the comment and tried to paint Obama as elitist and out of touch.

In truth, many people, including plenty living in small towns in the Rust Belt, are bitter. They are bitter about the loss of jobs and economic opportunity in this part of the country. And, many Pennsylvanians are bitter about a poor job-growth record that trails all but a few other states.

On top of all that, many Pennsylvanians are bitter about politicians in Washington, D.C., and Harrisburg who are more interested in helping themselves or their major campaign contributors than average citizens.

And Congress appears to be on the verge of giving more voters another reason to be bitter and cynical.

The Senate version of the "Foreclosure Prevention Act" contains huge tax breaks for big business. There might be a few crumbs of relief for struggling homeowners, but there are big bucks for homebuilding corporations that made hundreds of millions of dollars in profits a few years ago, but are struggling now. The Senate bill also has tax breaks for companies unrelated to housing, such as Ford and General Motors.

Among the now-struggling homebuilders is Pennsylvania-based Toll Brothers, Inc., whose founder and CEO was paid $50 million by the company last year and has taken home $99 million over the past five years.

Hurt by the steep decline in the high-end housing market, Toll Brothers joined forces with 14 other big corporate homebuilders and hired a lobbying firm that met with staff members of the Senate Finance Committee. The result of that effort is a huge tax break that would allow Toll Brothers and others to charge their current losses against gigantic profits of three or four years ago.

Terence M. O'Sullivan, president of the Laborers International Union of North America, is right when he says, "Tax breaks for corporate homebuilders won't help stabilize the housing market, won't create jobs and won't prevent a single foreclosure."

Even Sen. Christopher Dodd, D-Conn., admitted the bill tilts too heavily toward corporate interests. Speaking of the Senate's efforts, Dodd said, "Quite candidly, what we've done does not quite live up to the title. We have more work to do."

Maybe the Senate bill should be called "This Is AMust-Pass Bill Giving Away Money In An Election Year, So Let's Help The Big-Money Interests Whose Donations Ensure Our Re-election Act."

With the national obsession with the subprime-finance crisis and the related collapse of housing prices in some parts of the country, there is political pressure for Congress to do something. So far, it's mostly talk, and it remains to be seen who actually will be helped.

So far, it looks like those with lobbyists will be helped the most. And, unfortunately, it doesn't mean average taxpayers or even struggling homeowners.

Leaders in the House are suggesting that corporate homebuilders and their lobbyists will not have the same influence with them. Therefore, it is possible that the tax breaks for big homebuilders will be removed in favor of assistance targeting struggling homeowners when it comes time to reconcile House and Senate versions of a foreclosure relief bill.

Writing in U.S. News and World Report magazine, editor-in-chief Mortimer Zuckerman said of housing relief legislation, "The Senate version is as close to a boondoggle as you can get. The worst provision is retroactive tax breaks for homebuilders and banks, which is nothing more than a typical response to powerful lobbyists of these two groups. Please explain why these institutions deserve benefits at taxpayer expense, given their overwhelming business misjudgments of the past half-decade — never mind the huge profits they made."

Taxpayers should demand that their representatives in Congress strip out the big tax breaks for these corporate interests. The housing relief bill should be targeted and limited, and should not help speculators or those whose involvement in housing was based on greed or dishonesty — or those who made hundreds of millions of dollars when times were good.

As the Financial Times wrote, "The prudent should not have to bear the cost of the profligate."

If Congress passes a bloated bailout or boondoggle, it will not only be rural Pennsylvanians who are bitter — and angry.

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