Bush Takes Mortgage Interest Deduction Off the Tax Reform Table

Reuters reports that President Bush on Friday rejected the idea of any change in the U.S. tax code that would eliminate the deduction for mortgage interest:

During a question-and-answer session in Florida, Bush was urged by a home owner to make sure that housing remains affordable. "Maybe you're hinting at whether or not the mortgage deduction would be part of a plan," Bush responded. "I don't think you have to worry about the mortgage deduction not being a part of the income-tax law."

The Final Report of the President's Advisory Panel on Federal Tax Reform recommends replacing the current deduction, available only to itemizers, of interest on up to $1.1 million of mortgage debt with a "Home Credit" equal to 15% of mortgage interest paid, available to all taxpayers, limited to the average regional price of housing ($227,000 - $412,000).