Writing for U.S. News & World Report, Jason Gold explains the impact of the fiscal cliff on homeowners.
With the clock ticking, the nation is engrossed in Washington’s horse wrangling over the fiscal cliff, a nasty double whammy of spending cuts and tax hikes that experts predict could usher in another crippling recession.
But while Democrats defend entitlements and Republicans defend against tax increases, no bigger constituency seems to be more in the cross-hairs than homeowners. The popular mortgage-interest deduction (MID), long thought to have hands-off status, is now on the table as lawmakers try to steer the country away from plunging headlong over the fiscal cliff.
To what degree eliminating or reducing the MID, which costs the government an estimated $98 billion annually, impacts the housing market is debatable. While a potential change in the MID has caused a great deal of coverage in the news—and no doubt great anxiety for the average homeowner—most can sit back and take a deep breath … for now. The MID won’t be part of the fiscal cliff fix.