UPDATE 1-US Congress diverges on housing crisis response
(Adds vote; Perino, Specter, Dodd comments; share prices)
WASHINGTON, April 8 (Reuters) - Congressional efforts to tackle the housing crisis began to strain on Tuesday under the weight of a growing number of legislative proposals and White House opposition to a bipartisan Senate tax bill.
The Senate voted 92-6 to carry on with consideration of its bill, which would offer a $6-billion tax break to home builders and other corporations, with some assistance for homeowners. Final Senate action on the measure was expected later this week.
The Senate's procedural vote on Tuesday came after the Bush administration announced its opposition to the bill, questioning its cost and key provisions.
After the White House's announcement, home builder stocks slumped. Pulte Homes Inc (PHM.N) closed off 5.8 percent at $14.94 and KB Home (KBH.N) off 4.9 percent at $26.01 amid moderately lower trading on the New York Stock Exchange.
"This is not a bill that we could support," said White House spokeswoman Dana Perino. "Fortunately, it doesn't appear likely that this bill will come to the president's desk."
Perino cited the unveiling of another tax-focused bill in the House of Representatives by Rep. Charles Rangel, chairman of the tax-writing Ways and Means Committee, revealing stark differences between the Senate and House approaches.
Lawmakers are under growing pressure from voters to address rising foreclosures and loan defaults as a historic home price bubble deflates, locking up large portions of the credit markets and pushing the economy to the brink of recession.
ENOUGH HELP FOR HOMEOWNERS?
The Senate bill headed for likely approval has been criticized as overloaded with corporate tax breaks and too light on real help for average homeowners.
"This bill is not balanced," said Sen. Arlen Specter, a Pennsylvania Republican, in floor debate. "This is not half a loaf. This is a crumb."
Sen. Christopher Dodd, who is managing the bill, acknowledged that he had wanted more in the legislation. For example, Dodd favored a provision that would have let bankruptcy judges ease the payment burden of distressed borrowers in Chapter 13, a measure dropped from the bill.
"More could be done, I don't disagree ... and more will be done," Dodd said as the Senate moved to deal with a long list of potential additional amendments.
In the House, Rep. Charles Rangel's tax-writing Ways and Means Committee will hold a Wednesday hearing on the House Democrats' roughly $11-billion tax breaks bill.
As drafted, the House bill would give low-income, first-time home buyers a tax credit of up to $7,500 that would have to be repaid over 15 years. It would offer federal income tax non-itemizers a new standard deduction for state and local property tax payments. Continued...
