Will improving economy protect mortgage interest deduction?

The improving economy, combined with recent tax increases and government spending cuts, is “tantamount to a loosening of the proverbial noose around the necks of Washington lawmakers,”  as the official May 19 debt ceiling deadline approaches, writes Abby D. Phillip. The Treasury Department — which is also expecting a $66.4 billion repayment from Fannie Mae and Freddie Mac —  could “employ some financial jujitsu” that could push the debt ceiling deadline back to as late as this fall, she says. With the deficit getting smaller already, Phillip thinks Republicans who are pushing for tax or entitlement reforms and spending cuts “may hit a wall when it comes to how much they can extract from Democrats.” Proposals to reform the tax code could include a revamp of a tax break near and dear to the hearts of Realtors and mortgage lenders alike — the mortgage interest deduction. Source: abcnews.go.com.