WASHINGTON — Two Washington insiders, speaking during the National Association of Realtors midyear conference last week, said the debate over changes to the mortgage interest deduction is largely for show, and that major changes are unlikely.

The mortgage interest deduction is a "sacred cow that has been under attack for years," but support for housing and the MID remains strong on Capitol Hill, said Paul Equale of Equale & Associates.

NAR strongly opposes any changes to the mortgage interest deduction, saying such changes could  further depress home prices by up to 15 percent.

"Controversial issues have a tendency to get teed up in election years," the political consultant and former Democratic Party official said, and sometimes issues are put into play "for purely political purposes."

But support for changing the MID is mostly confined to the far right and far left, Equale said, with those in the center wary of the claimed benefits of scaling it back.

"If you take away the MID, or change it dramatically, that would have an even more Draconian effect on housing markets," Equale said. "I would argue that, like in the supply-side economics debate, you’d be creating a situation where the government would be getting less tax revenue, because the pie would be shrinking."

David Horne, senior counsel for Washington lobbying firm Russ Reid and former chief of staff at the Department of Housing and Urban Development under the Bush administration, agreed.

In 2005, a Tax Reform Panel recommended converting the mortgage interest deduction to a 15 percent tax credit on mortgage debt of up to $400,000. The Congressional Budget Office (CBO) estimated that change would have generated $418.5 billion in tax revenue between 2008 and 2017.

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