Entitlement or pork? Budget cutting discussions should start with homeowner deductions.

Since the Clinton administration has made deficit reduction a budgeting priority, social program spending has been discouraged. Whether spending is on Head Start, crime prevention or public assistance, Congress sees it as "pork."

Homeowner deductions, however, cost the Treasury Department $83.3 billion a year. Like food stamp recipients, taspayers who benefit from homeowner deductions are on the dole - they just don't stand in line or suffer public embarrassment. This deduction, though, is regressive, giving high-income people greater breaks than low-income people.

The more house you buy, the more mortgage interest you can deduct from your current income to lower your tax bill. Some call the deduction a "mansion subsidy" because it makes it easy for people to buy more house than they need. It also offers no tax relief to our nation's 32 million renters.

Who benefits from this? Ten percent of homeowner deductions went to households earning more than $200,000, just 0.7% of the population. And households earning betwwen $100,000 and $200,000 got 25 % of the deduction. By contrast, of the 89% of households who earned under $75,000, many took no deduction.

Renters, 35% of all households, receive no benefit. Black homeowners, with generally lower incomes than whites, have less access to the mortgage deduction. Two-thirds of all white familes own their homes, compared with just 42% of all black families. While black families represent 11% of households, we are just 7% of all homeowners.

The low incidence of black home ownership is partly responsible for gaps in black-white wealth levels, since home equity is the key way that families accumulate wealth. As more families borrow against their homes for college tuition, new business capital and other purposes, the ownership gap exacerbates black-white differences in access to capital.

Despite its drain on the Treasury, homeowners ductions promote stable ownership, supporters say. But there are other ways to promote homeownership that are more equitable. A homeowner tax credit could be structured to reduce a family's tax bill. A tax credit would also even out the homeowners benefit, bringing some low-and moderate income people into the housing market. The mortgage deduction could also be capped at a lower amount than $1 million a year in interest.

Homeownership and stability are desirable goals, but this deduction should be recast to more equitable.

WORDS IN THE NEWS

"What America needs, and needs desperately, is an ongoing, productive national conversation about the issues of race, ethnicity, culture and religious tolerance. These are subjects we don't like to talk about. We tend to speak about them cadidly, and perhaps in some detail, with our own kind in the privacy of our homes, but rarely with people from other communities. But these are subjects we must talk about with those of different backgrounds." Sandford Cloud Jr., president and CEO of the National Conference, speaking recently to the United Way National Minority Roundtable. Cloud is the first black person to lead the National Conference, founded in 1927 as the National Conference of Christians and Jews.