Real Estate Roundtable members on Oct. 5 engaged national lawmakers on compelling policy issues impacting commercial real estate, economic growth and job creation – including tax revenue proposals in the infrastructure reconciliation bill, the debt ceiling, housing, climate change and cybersecurity legislation – during The Roundtable’s 2021 Fall Meeting.

Urgent Policy Issues

• Roundtable Chair John Fish (Chairman and CEO, Suffolk), right, and Roundtable President and CEO Jeffrey DeBoer, left, launched the meeting and led discussions with members of Congress, including:
  
  
  • Sen. Mitt Romney (R-UT)

    This discussion focused on colliding policy issues that have been front-and-center this week in Washington, including the debt ceiling and infrastructure. Sen. Romney was part of a small group of leading policymakers who negotiated the bipartisan “physical” infrastructure bill that passed the Senate in August. (Roundtable Weekly, Aug. 13)

  • Sen. Mark Warner (D-VA)

    Sen. Warner noted his priorities in the areas of child care and workforce development. He also addressed the need for more affordable housing investment and cybersecurity reporting, described climate change as an “existential threat,” and discussed tax measures such as raising the top marginal rate on many pass-through owners.  

  • Rep. Josh Gottheimer (D-NJ)
    A discussion with Roundtable Chair Emeritus Randy Rowe (Chairman Green Courte Partners LLC) focused on Rep. Gottheimer’s crucial leadership role with congressional moderates as the Co-Chair of the Problem Solvers Caucus, who are key to passage of the bipartisan “physical” infrastructure framework and the evolving “human” infrastructure bill. 

  • Rep. Kevin Brady (R-TX)
    Ways & Means Committee Ranking Member Brady discussed the menu of revenue options that Democrats are considering to pay for the “social infrastructure” reconciliation package. (Accounting Today and MSNBC, Oct. 6)

  • Rep. Darin LaHood (R-IL)
    Rep. LaHood, a member of the Ways & Means Committee, provided his views on the numerous converging policy deadlines affecting the decision-making process on Capitol Hill through a video interview with DeBoer released ahead of Tuesday’s meeting.   

Interactive Town Hall

• Roundtable members also participated in an open-mic Town Hall session featuring four members of Congress who play leading roles on national tax, energy and housing issues. The dialogue covered a wide range of topics, including transit investment, EB-5, carried interest and capital gains, climate-related measures and energy-efficiency provisions related to greenhouse emissions.
  
  
• Sen. Bob Menendez (D-NJ) and Reps. Earl Blumenauer (D-OR), Brad Schneider (D-IL) and Peter Welch (D-VT) participated in the Town Hall.
  
  
• Videos of the discussions with policymakers are available to Roundtable members upon request. 

Policy Advisory Committees 

• Chairs of The Roundtable’s Sustainability Policy Advisory Committee (SPAC), Tax Policy Advisory Committee (TPAC) and Real Estate Capital Advisory Committee (RECPAC) provided updates of the organization’s policy priorities. (See The Roundtable’s Policy Issues Toolkit and Executive Summary) 
  
  
• Members of the Equity, Diversity and Inclusion (ED&I) Committee reported on Roundtable-supported research currently underway, exploring the creation of a potential online marketplace that would connect real estate companies with minority-and women business enterprises that might serve as contractors, suppliers, and venture partners in CRE’s “supply chain.” (ED&I Mission Statement) 

The policy committees will gather next during the all-member Roundtable State of the Industry meeting, scheduled for January 25-26, 2022 in Washington, DC. (Roundtable Meeting Calendar) 

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The Senate last night passed legislation (S.1301) on a 50-48 vote that would increase the debt limit by $480 billion and avoid an Oct. 18 national default. (Axios and Wall Street Journal, Oct. 7)

New Fiscal Cliff 

• The bill would also effectively set Dec. 3 as the new fiscal cliff – when the new debt limit and the current short-term government-spending authorization both expire. (Roundtable Weekly, Oct. 1 and CQ, Oct. 7)
  
  
• The agreement struck by Senate Majority Leader Charles Schumer (D-NY) and Minority Leader Mitch McConnell (R-KY) this week raises the current national debt to approximately $28.8 trillion to cover spending previously authorized by the federal government. (NPR and CNBC, Oct. 7) 
  
  
• House Speaker Nancy Pelosi (D-CA) wrote to members of her caucus last night that she would call the House back from recess early to vote if necessary. President Biden said this week said he also would support an increase in the debt ceiling. (Wall Street Journal, Oct. 7 and White House remarks, Oct. 6)

Infrastructure Reset 

• Meanwhile, disagreements among moderate and progressive Democrats on the scope and cost of a $3.5 trillion “human” infrastructure package delayed a vote last week in the House, prompting Speaker Nancy Pelosi (D-CA) to reset the deadline for lawmakers to reach agreement to Oct. 31. (Forbes, Oct 2) 
  
  
• Congressional leaders and President Biden continued negotiations this week with centrist Senate Democrats Joe Manchin (WV) and Kyrsten Sinema (AZ) aimed at reaching a deal that would allow a human infrastructure bill to pass the Senate with 50 votes. Manchin this week added that he is open to a reduction in the reconciliation bill’s cost to between $1.9 trillion and $2.2 trillion. (CNN, Oct 5)

• Democrats are now engaged in an intense debate about how to cut the total cost of their human infrastructure bill. Legislation that would raise an estimated $2.1 trillion in taxes from corporations and the wealthy was approved by the House Ways and Means Committee on Sept. 15 to help finance the original $3.5 trillion reconciliation package. (Roundtable Weekly, Sept. 17) 
  
  
• Real Estate Roundtable President Jeffrey DeBoer commented Sept. 17 on the bill’s advancement. “We encourage Congress to review the suggested tax hikes, particularly those on pass-through businesses, and work to ensure that unnecessary and unintended damage is not done to the economy. Substantial commercial real estate activities are conducted by pass-through entities and these activities create jobs, support retirement savings, and boost tax revenue for critical public services provided by local governments.”  DeBoer added, “The Roundtable is encouraged, yet cautious, at this still relatively early stage of the legislative process.” (Roundtable Weekly, Sept. 17 | Sept. 24 | Oct. 1)
  
  
• Roundtable members and others are encouraged to reach out to their Representatives and contact their Senators to urge them to preserve the 20% deduction for pass-through business income (section 199A), which is directly tied to hiring workers and investing in capital equipment and property. Modest adjustments in the legislation would ensure that pass-through businesses could continue contributing to economic growth, innovation, and job creation. Background information and talking points on the pass-through issue can be found here. 
  
  
• Tax issues affecting CRE are summarized in The Roundtable’s summary on Real Estate Tax Issues and Budget Reconciliation Legislation. 
  
  
• DeBoer will participate in an Oct. 21 Marcus & Millichap webinar on the latest tax policy developments in Washington and what they mean for CRE. (Register here) 

Legislation on human and physical infrastructure, the debt ceiling, government funding and many other policy issues affecting CRE were the focus of discussions between Roundtable members and national policymakers during The Roundtable’s Oct. 5 Fall Business Meeting. (See story above).  

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Bipartisan legislation that would require private sector companies to report ransomware attacks to federal authorities was advanced this week by the Senate Homeland Security and Governmental Affairs Committee. A broad, 37-member coalition that includes The Real Estate Roundtable on Oct. 4 provided detailed suggestions to Senate and House congressional committees about provisions that should be included in any bill that would impose a compulsory cyber incident notification program on the business community. (Cybersecurity coalition letter and Committee mark-up)

Why It Matters

• The Cyber Incident Reporting Act (S. 2875) – sponsored by Committee Chairman Gary Peters (D-MI) and Ranking Member Rob Portman (R-OH) – would require certain owners and operators of critical infrastructure operators to report hacks within 72 hours and ransom payments within 24 hours to the Cybersecurity and Infrastructure Security Agency (CISA).  Organizations failing to do so would potentially banned from doing business with the federal government. (The Hill, Set. 28 and PoliticoPro, Oct. 5)
  
  
• The committee also approved the Federal Information Security Modernization Act of 2021 (S. 2902), which would require agencies and contractors to report on cyberattacks.
  
  
• The congressional bills aim to update the Federal Information Security Modernization Act, signed into law in 2014. Sen. Portman noted two reports on issued by the Homeland Security Committee since 2019 that found massive cybersecurity shortcomings at several federal agencies.
  
  
• The Senate Homeland Security Committee’s leadership may seek to merge their legislation may with a bill (S. 2010) from the Senate Intelligence Committee. Sen. Peters said he may also seek to include S. 2875 in House-passed defense policy legislation (H.R. 4350), which also includes language requiring cyber incidents. (BGov and PoliticoPro, Oct. 5)

Private Sector Concerns

• The business coalition’s Oct. 4 letter to the Senate Committees on Intelligence, Homeland Security and Government Affairs and the House Committee on Home  recommended several provisions that should be central to a mandatory reporting regime, including:
  
  
  • Establish a prompt reporting timeline of not less than 72 hours. Legislation should reflect an appropriate, flexible standard for notifying government about significant cyber incidents.
    
    
  • Attach reporting to confirmed cyber incidents. Businesses need clarity in reporting requirements, which should be targeted to well-defined and confirmed cyber incidents.
    
    
  • Confine reports to significant and relevant incidents .A list should be limited in reach—particularly excluding small businesses using existing federal rules—and risk based.
    
    
  • The business industry comments recommended that federal cybersecurity reporting legislation should also include robust liability protections; consistent federal reporting requirements; restrictive government use of reported data; and guarantee substantial input from industry to protect the rulemaking process. 

Identifying Critical Infrastructure

• In the House, a separate bill that would identify systemically important infrastructure was introduced Oct. 5 by Homeland Security Committee Ranking Member John Katko (R-NY), Rep. Abigail Spanberger (D-VA) and Rep. Andrew Garbarino (R-NY). (Katko one-pager on the bill)
  
  
• The bill would authorize CISA to prioritize infrastructure operators considered so crucial to the U.S. economy, public health and national security that a disruption to their operations due to a cyberattack would be considered debilitating. (Katko news release, Oct. 5) 

The Roundtable’s Homeland Security Task Force continues to work with key law enforcement and intelligence agencies and the Real Estate Information Sharing and Analysis Center (RE-ISAC) on protective measures that businesses can take to create infrastructure resistant to physical damage and cyber breaches.  

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