The co-chairs of the president’s National Commission on Fiscal Responsibility and Reform have published a discussion draft of budget proposals aimed at reducing the federal budget deficit. The Commission’s ideas deserve to be taken seriously for highlighting and considering the nation’s long-term fiscal challenges, even if some of the proposed policy changes are ill-suited to short-term macroeconomic goals or long-term policy commitments. Among the proposed changes are many that would negatively affect homeowners and businesses in the housing sector. (NAHB’s official reaction to the discussion draft can be read here.)
The report from the co-chairs, former Senators Alan Simpson and former White Chief of Staff Erskine Bowles, proposes fundamental changes to America’s tax code, as well as changes to federal spending and entitlement programs. The co-chairs’ proposals affecting the tax code is actually a menu of three (or five, depending on how you count them) tax reform proposals.
For future and recent homebuyers, homeowners, and housing sector stakeholders, the proposed changes are harmful, reducing housing demand and producing windfall losses for existing homeowners.
The following links examine the proposals in detail: