The House Ways and Means oversight subcommittee proposed a series of changes Thursday to make the low-income housing credit more effective.
Members who support the tax credit hope the largely technical changes will deflect committee Chairman Bill Archer's efforts to repeal it. A letter urging the Texas Republican to preserve the program was signed by 23 of the committee's 39 members and released after the hearing.
"This credit has established a public-private partnership that works," said Rep. Jerry Weller, R-Ill., one of the Ways and Means members who signed the letter. Banks extend credit to community development projects in exchange for the government credits, which the institutions use to reduce their federal taxes.
Rep. Jack Metcalf, R-Wash., and chairman of the Republican Housing Opportunity Caucus, released a separate letter supporting the tax credit signed by 74 House Republicans.
The subcommittee's changes are designed to improve oversight and encourage, but not require, states to use tax credits to fund renovations and build more projects housing children.
The General Accounting Office released a report recently that suggested oversight of the tax credit be stepped up to ensure states are using the program properly.