A powerful legislator wants to cut deductions for people who own homes larger than 3,000 square feet, but the idea is facing fierce opposition from some consumer and realty groups.

Q: I recently heard that Congress is talking about reducing or eliminating mortgage-interest deductions for homes that are larger than 3,000 square feet. This would be a terrible financial blow to my husband and I, because we have six children who live with us, so our 3,050-square-foot house already is cramped and the interest deductions we are allowed to take on our loan go a long way toward helping us make ends meet. Do you think this proposal will be approved?

A: Opposition to eliminating or reducing interest deductions on mortgages for homes that are larger than 3,000 feet has been growing steadily ever since U.S. Rep. John Dingell, D-Mich., announced his intentions to introduce such legislation last month.

Dingell is chairman of the powerful House Energy and Commerce Committee, which has gained even more influence in the past year as gasoline prices surged and concerns about global warming climbed. The congressman says that “McMansions” of 3,000 feet or more use an unacceptably high amount of energy, so he feels that taxpayers shouldn’t get deductions for owning or buying them.

Critics of the proposal range from the consumer-friendly American Homeowners Grassroots Alliance to virtually all of the powerful realty trade groups in Washington. They note that many of today’s larger homes, especially those built with the energy-saving technology that has been developed in the past few years, use far less gas and electricity than smaller houses that were built when conservation wasn’t such a big priority.

They also say that eliminating the interest deductions for bigger-than-average houses would unfairly punish large families (like yours) who simply need “extra space” and depend on their current write-offs to make their homes affordable.

Opponents of the plan also note that scaling back deductions for larger homes – many of which have already dropped in value as the nationwide market softened – could send their prices into a free-fall by discouraging potential buyers who could no longer write off their interest payments on April 15.

Foreclosure activity would then rise even faster, which in turn would worsen the nation’s growing banking crisis.

Lobbyists in Washington tell me that Dingell’s proposal probably won’t go far this year, but could gather more support in 2008 as Congress and the Bush administration seek new ways to fund their various programs.