Tax Relief?

The House and Senate have finally agreed to a two-month extension of the payroll tax cut, equating to a $33b total package. While this is slightly positive news for 160 million American workers, many do not realize (or simply ignore) how the cut is funded. As simply stated in today's Wall Street Journal, "the bill's $33 billion cost is expected to be covered by an increase in fees charged to mortgage lenders by government housing agencies Fannie Mae and Freddie Mac...the fee increase, expected to raise about $35.7 billion in revenue over 10 years, likely would be passed on to new-home buyers, raising their monthly mortgage payments by as much as $15 on mortgages of $210,000." Suddenly, it seems as if the tax cut isn't so beneficial. Of course, one could argue that the sample sets of those in need of tax relief and those seeking reasonable mortgage financing are somewhat exclusive, but such a dichotomy is difficult to define.