The Foreclosure Prevention Act of 2008 is another New Deal-style power grab that includes some significant provisions, especially the gravy for homebuilders.

Extension of Net Operating Loss Carryback. To aid homebuilders and other businesses hit hardest by the economic slump, this bill will extend a law allowing corporations to apply excess net operating losses to tax returns from prior profitable years and receive any applicable refunds. For 2008 and 2009 losses, the provision would extend the "net operating loss (NOL) carryback" to four years (back to 2004 and 2005, respectively) from the two years currently in law. Measures to prevent companies from abusing the intent of the provision are also included.

This is a significant tax break for those who profited immensely from the housing boom while their lobbyists campaigned to sustain all the rotten policies that prolonged the housing bubble so that homebuilders could continue to reap the gorgeous profits. And they made money - lots of it. (See Pulte 2001 and 2002 results, along with its "poor me" 2007 forecast and announcement of job cuts. Pulte CEO Richard Dugas had been called "America's Real Estate King.")

How did this little gift come about? A very influential group called the National Association of Homebuilders worked its magic.

Jerry Howard, chief executive of the National Association of Home Builders, said in an interview that the tax break is "very important to the building community." It will keep many small homebuilders out of bankruptcy, he said, and will prevent large builders from having to liquidate assets.

Other big beneficiaries would be Wall Street banks such as Citigroup Inc., Merrill Lynch & Co. and Morgan Stanley. In fact, any company now struggling after years of healthy profits that pumped up their tax bills could benefit.

I am always and everywhere for any kind of tax break except when it's a free lunch for the monster corporations that breezed along in good times, assisted by one government intervention after another. For years we listened to the homebuilders sing on high as profits went up 30%, 40%, 50%, and more, and now we listen to their woes as the false prosperity can no longer be maintained, even with the multitude of attempts from their fairy godmothers in the halls of government. Let these fools suffer the consequences of no demand for homes, just as they benefited from the spike in demand for homes thanks to the government's money machine and social engineering.

The people of the National Association of Home Builders were so furious that this tax break was not in the economic stimulus package, they declared they would "stop making contributions to congressional candidates until further notice." The organization claimed that congress had not "adequately addressed the underlying economic issues that would help to stabilize the housing sector and keep the economy moving forward." This is a group that has given at least $20 million to Washington policy makers since 1990.

This bill will also bring more of the same thing that got us here in the first place: new (and higher) FHA loan limits which would allow people to borrow 110% of the value of their home; government subsidization of foreclosed home purchases; pre-foreclosure "counseling"; and stop foreclosure for military folks (this is called "preserving the American Dream"). The mortgage counseling piece is pegged at $100 million, and the Democrats are complaining that isn't enough, and so they demand $200 million. Anybody ever wonder how you "counsel" someone who, at all costs, has to live beyond their means? Of course the Psychobabble State will figure out a way to convince us all that five, one-hour sessions with a government employee can change the behavior of juvenile adults who have practiced financial irresponsibility for years and years, and have taught their children the same. As a final note, the social welfare types are enraged that the bill doesn't include bankruptcy intervention because the Mortgage Bankers Association squashed that effort.