Ideas to cut the federal deficit could cost homeowners billions

The L.A. Times reports:

You might assume that during August, with the Senate and House on their summer break, nothing much happens on Capitol Hill. You know the old saw: Your money is safe when Congress is out of town.

But that's not quite the way it works. Committee staffs, economists, tax lawyers and policy shapers never really leave town. For example, the nonpartisan Congressional Budget Office this month delivered its latest revenue-raising options for Senate and House consideration as they write this fall's tax and budget legislation.

Tucked away in the report are several plans that could -- if adopted -- cost homeowners billions of dollars. Although not formal legislative proposals, the CBO's options represent a handy fiscal menu for legislators to pick and choose from to reduce the federal deficit or to pay for new programs they might want to advance.

Tops on the CBO's hit list for housing: Slash deductions for homeowner mortgage interest from the present $1.1-million limit to $500,000, phased in with $100,000 annual reductions starting in 2013.

You'll want to read the whole article.