Business tax break added to Senate housing bill

By Kevin Drawbaugh

WASHINGTON (Reuters) - The U.S. Senate on Friday added another business tax break to legislation billed originally as a rescue plan for struggling homeowners.

Lawmakers voted 76-2 to let money-losing corporations accelerate their use of certain accumulated tax credits to make new business investments.

Sen. George Voinovich, a sponsor of the amendment, said it would help companies that are in the red and cannot take advantage of another business tax break approved by Congress earlier this year involving accelerated bonus depreciation.

Giving money-losing companies a tax break will help them create more jobs and that, the Ohio Republican said in a statement, will help people pay their mortgages.

"Without a job and financial security it is extremely difficult to keep paying your mortgage," Voinovich said.

With the economy near recession, lawmakers are under growing pressure to address rising foreclosures, falling home prices and credit market paralysis.

Demands for action on behalf of homeowners intensified last month after the Federal Reserve engineered a massive bailout of Wall Street investment bank Bear Stearns.

The Senate's bill is estimated to cost as much as $20 billion, with much of it accounted for by business tax breaks.