We all know that the United States Congress and Senate are bickering and jockeying over how to tackle (or not tackle!) the looming August 2nd debt deadline. We know that part of any bipartisan long term solution is to find places to cut spending. We understand that a multitude of people are likely to be affected due to the potential for cuts or alterations to things like Medicare, Social Security, and programs to assist the disabled or those in poverty. In some way or another most everyone will likely be affected.

You can add 35 million households to that list of people who may be affected.

One of the major benefits of homeownership, the mortgage interest tax deduction, is being eyed as one of the ways to make a dent in the ongoing debt crisis. This isn't a new idea; it's just one of many topics the government is discussing in response to the financial bubble that has held the housing market and millions of homeowners hostage, which altogether have the tone of downplaying homeownership as an important part of the American fiber. It seems that many politicians apparently don't see homeownership as the American Dream anymore...

Nevermind the obvious benefit to the community from a traditional homeowner who takes care of their property, who cares about the neighborhood their children play in, who cares about the schools and the level of education their children get, etc, etc. Tell me, is it that hard to pick out a rental property on your street? You know, the one probably in need of a paint job that has knee high grass full of dandelions, overgrown plants, etc. Obviously there are many great families who rent and help keep up the presentation of their home, but it is hard to match the pride of ownership of a homeowner who lives in his/her own property. But I digress…

To the 35 million households that claimed the mortgage interest tax deduction it means about $100 billion every year for an average of close to $3,000 of tax burden a year.

Housing industry groups like the Mortgage Bankers Association (MBA) and the National Association of Realtors (NAR) have been vehemently arguing against removing or altering the deduction on the simple basis that A) it will further hinder an already sensitive housing market struggling to recover, and B) the housing market fuels 30% of the gross domestic product from brokers to builders. Said MBA President David Stevens, "We are very concerned about what would happen as the outcome to an industry that fuels 30 percent of gross domestic product if it was removed."

The mortgage interest tax deduction is a big deduction and I'm not going to sit here and say it isn't worth looking at as a place to improve our debt situation. It's worth looking at everything. What I will say is that I have concerns that any changes now could further dampen the housing market's ability to recover. It was previously discussed then dismissed, and chances are it will be left off the table this time too.

Still, regardless of profession, age, wealth, and health these next few days before the deadline are likely to affect millions of Americans in one way or another.

Robert E. Wasser - Seattle and Bellevue real estate news, market trends, statistics, and blog