“We’ve had a tax code that was biased too much toward housing,” said R. Glenn Hubbard, dean of the Columbia Business School. “It’s one of the reasons we got in a housing crisis.” The Bush policies were specifically geared toward helping first-time and minority home buyers, but the long-term move toward looser credit standards and lower down-payment requirements—which began before his administration—was blamed in part for the wave of foreclosures that followed.

Hubbard served as the chairman of Bush’s Council of Economic Advisers for the first three years of his presidency. But while he said he backed the overall ownership society, which included policies to promote retirement savings and overhaul Social Security, he did not subscribe to the administration’s explicit push for home ownership. “I never supported it when President Bush wanted to do it,” Hubbard said in a phone interview. “Whether people decide to own a home or not is a personal decision. It shouldn’t be a policy objective.”

Conservatives frequently talk about creating a tax code that doesn’t pick “winners and losers” among industries, but that economic philosophy just as often takes a back seat to campaign politics and the influence of donors. “This is consistent with the Republican view on the economy,” said Stephen Oliner of the conservative American Enterprise Institute, “which is that the government should not really be in the business of directing how people choose to spend their money and that home ownership is one of those nudges that the tax code is doing.” Conservatives like Oliner also doubt the efficacy of the mortgage-interest deduction, which has roots in the U.S. tax code dating back more than a century. They argue it’s already built into the price of a home and artificially inflates the market.

For months, Republican tax-writers have been targeting the state-and-local tax deduction, a lucrative benefit that they believe offers an unfair subsidy to high-tax—and predominantly Democratic-led—states like New York, New Jersey, Illinois, and California. As an attempted compromise with Republican House members from those states, the Ways and Means Committee agreed to preserve the deduction for property taxes while capping it at $10,000. But the scaling back of tax breaks for home buying and selling went beyond what some lawmakers were expecting.

The proposed changes have generated blowback both from lawmakers representing New York and New Jersey and, not surprisingly, from the real-estate and homebuilding industry. “This bill puts us at risk of a housing recession, and we are gravely concerned about it,” said Granger MacDonald, chairman of the National Association of Home Builders. While current home owners won’t lose their deduction for mortgage interest, MacDonald said there are 7 million homes now on the market over the $500,000 price point. “Those 7 million homes lose value. They can’t be sold,” he said. “That means the people moving into those homes can’t sell their homes, so their homes lose value, and the chain continues downward.”