Senator Pushes to Expand Tax Credit for Home Buyers

Republican Sen. Johnny Isakson of Georgia has been leading the rally cry to extend a stimulus program which gives first time homebuyers an $8,000 tax credit.

"This is not only the key to help somebody buy a loan or the key just to stabilize values it also helps to bring back lending for reasonable, highly qualified people," he said on "Washington Unplugged" Tuesday.

The senator's proposed legislation actually increases the amount of tax rebate homeowners could receive and increases the income threshold for families and individuals eligible. According to congressional estimates, Isakson's plan would cost an additional $16.7 billion dollars if expanded until June 30, 2010.

Asked by moderator Nancy Cordes, CBS News' Capitol Hill correspondent, how he plans to pay for this, Isakson cited the dividends coming back from TARP loans to banks and unspent stimulus money. This can be done "without additional offset" to the congressional budget he explained.

He noted that Congress extended a similar option in the mid 1970s – which helped turned around a recession.

"[H]istory is a great teacher," he said. "I was in the real estate business in 1974 when the markets collapsed and Congress passed a $2,000 tax credit and let it last for a year. It brought our economy back. It turned housing around and took a recession and turned it back into prosperity."

Isakson credited the $8,000 tax credit introduced this year as part of the $797 billion dollar stimulus plan with 350,000 to 400,000 home sales in 2009.

Watch above for the full interview, as well as hear Bob Schieffer interview CBS News' Byron Pitts on his new book "Step Out on Nothing."

"Washington Unplugged" appears live on CBSNews.com each weekday at 12:30 p.m. ET. Click here to check out previous episodes.