Home Ownership: A Core Value
They have very different political orientations but Steve Schmidt, a top Republican political strategist, and David Plouffe, one of his counterparts on the Democratic side, are in lockstep when it comes to the importance of home ownership in anchoring a growing U.S. economy and building strong communities.
The two strategists share the stage May 13 at the REALTOR® Party Convention & Trade Expo in Washington to talk about how this year’s national elections could shake things up in Congress just as lawmakers turn the spotlight on issues—like secondary mortgage market reform and changes to the tax code—critical to real estate.
Schmidt, an adviser for Sen. John McCain when he ran as the Republican presidential nominee in 2008, says lawmakers on both sides of the aisle understand the centrality of home ownership to the economy and are likely to proceed cautiously on any changes that could impact markets. “With home ownership, you have a tax base, good schools, people investing in their community,” he says in an interview with REALTOR® Magazine. “You’re going to have a tax benefit for owning a home, as far as I can see.”
Plouffe, the top campaign policy adviser for President Barack Obama in both 2008 and 2012, says efforts to improve the federal government’s financial picture don’t have to come at the expense of home ownership. “There are a lot of other places to look before you [make changes to the mortgage interest deduction],” says Plouffe. “My guess is you don’t need that to achieve your economic and deficit-reduction goals.”
The analysts say the country still has a ways to go before it’s fully recovered from the financial crisis in 2008, but they bring different perspectives on what needs to come next to get the economy right. For Schmidt, the government needs to let the private sector spur broad economic growth — ”You can’t solve problems with an economic growth rate of 2.8 percent,” he says — while the government needs to improve its own program management and help get funds into the economy for infrastructure improvement.
Plouffe says the capital requirements and other regulatory controls put in place to curb private-sector financial abuses need to be watched carefully to make sure they prevent a recurrence of the global financial crisis. “We’re still only halfway through the historical recovery period,” he says. “We all want to make sure the recovery isn’t based on bubbles, on smoke and mirrors.”
Turning their eyes to national elections later this year, the analysts say Congress is unlikely to engage in the kind of political brinkmanship that roiled markets over the last few years. That means no battles over raising the debt ceiling. But, once the elections are over and attention turns to the presidential election in 2016, political games could start anew. “I don’t share the optimism of those who believe the debt ceiling as a political weapon has been forever retired,” says Plouffe.
Both analysts would like to see Congress tackle immigration reform. “You have to be able to work at some level within the bounds of reality to get the best kind of business done for the American people,” Schmidt says.
On health care reform, the analysts differ on where the federal government goes from here. For Plouffe, the focus must be on refinements, while Schmidt says the program needs to be reformed again. “It’s certainly not going to help Democrats in the short term,” he says.