Tax Reformers Eye Breaks for Housing

Mortgage deductions and other benefits are costing more than forecast. With a rising federal budget deficit, they may be scaled back.

By David Streitfeld
Times Staff Writer

October 8, 2005

Just as the nation's housing boom appears to be slowing, debate is starting among policymakers about reining in one of the most sacred cows of American public policy: the mortgage-interest deduction and other generous tax benefits granted to homeowners.

A presidential commission on tax reform will take up the subject for the first time Tuesday. "Everything's on the table," said Charles Rossotti, a panel member who was commissioner of internal revenue from 1997 to 2002.

The mortgage-interest deduction saved homeowners $61.5 billion last year. No one expects the commission to recommend its elimination.