"Among the proposals put forward by the Democratic and Republican co-chairs of President Obama's deficit commission is one idea that could hit homeowners where it hurts: reducing or eliminating the popular mortgage interest tax deduction. Tax breaks don't get much bigger than the mortgage interest deduction. Because of it, Americans will save $104 billion on their tax bills in 2011, said Bill Ahern, director of policy and communications at the Tax Foundation, a Washington, D.C.-based research group." http://www.npr.org/2010/11/11/131255016/deficit-panel-targets-mortgage-interest-deduction
The mortgage interest deduction is just another behavior modification tool the government employs. It should be thrown out along with a bunch of other crap the government uses. However, no way in hell this deduction gets scrapped. The NAR would pay enough politicians off to bury the proposal.