Ducking the Homeless Bill

Neglect of the homeless was one Reagan-Bush legacy Bill Clinton angrily promised to change. Last spring the President ordered three members of his Cabinet to study the problem and propose bold solutions. Last week they did, in a private report to the White House that concluded that the nation's homeless population may have totaled as many as 7 million in the late 1980s -- far higher than any current estimate. The report, signed by Housing and Urban Development Secretary Henry Cisneros, Health and Human Services' Donna Shalala and Veterans Affairs chief Jesse Brown, proposed spending large new sums on subsidized housing, mental health and other programs.

All well and good -- except the document dodges the issue of how to finance such a plan or even how to estimate what it may cost. This was a curious oversight inasmuch as the same report specifically targets a rich source of funds: the billions of dollars in mortgage-interest tax deductions granted to the wealthiest one-fifth of American families.

The tax code, notes the report, grants middle- and upper-class Americans more in housing subsidies than poor people get, at a cost of $41 billion last year -- 85% of which went to the most affluent taxpayers. But the report makes no proposal for changing the mortgage-interest tax deduction.

Officials deny they are avoiding a tough political choice. "We talk about it, but we don't say, 'Let's take on the middle class' because it will never happen," says an Administration official. "The middle-class mortgage deduction is a major economic generator. And if you slowed the economy because you reduced mortgage deductions, who did you really help? Nobody."

That argument begs the point. The issue: whether the Administration is willing to limit those deductions for Americans who can afford half-million- dollar homes and second homes.