Policy Landscape – Page 4 – The Real Estate Roundtable

Senate to Consider Stopgap Funding Bill as Parties Signal Contrasting Tax Agendas After Mid-Term Elections

Posted on September 16, 2022October 27, 2023 by Trey Jackson

The end of the government’s fiscal year is only two weeks away as congressional leaders continue to work on the scope of a Continuing Resolution (CR) that would extend federal funding into mid-December.

CR Scope

The Senate will move first to determine if other bills will be attached to the stopgap—the final legislative package before November’s mid-term elections. (House Majority Leader Steny Hoyer (D-MD) website, Sept. 12)
The process of moving the funding package has been complicated by a deal reached last month between Senate Majority Leader Charles Schumer (D-NY) and Sen. Joe Manchin (D-WV) to consider permitting rules for energy pipelines and exports. The agreement was reached to secure Manchin’s support for the Inflation Reduction Act. (Roundtable Weekly, Aug. 12 and Manchin’s Outline of Energy Permitting Provisions)
Sens. Schumer and Manchin are working to gather support for permitting legislation, which would require 60 votes to pass the Senate. In the House, a coalition of 77 Democrats recently expressed their disapproval of linking a permitting reform bill to the “must-pass” CR. (Reuters and The Hill, Sept. 13)
House Speaker Nancy Pelosi (D-CA) addressed the possibility of a permit bill yesterday. “We have agreed to bring up a vote, yes. We never agreed on how it would be brought up, whether it be on the CR, or independently or part of something else. We’ll just wait & see what the Senate does,” Pelosi said. (E&E News, Sept. 15)
A CR that expires in December could be followed by consideration of a FY2023 “omni” spending package —with possible extensions of certain tax provisions—during a lame-duck session.

Post-Election Tax Agendas

House Republicans plan to unveil an outline of their “Commitment to America” platform on September 23 in anticipation of the November 8 midterm elections. (Tax Notes, Sept. 15)
Rep. French Hill (R-AR), a member of the GOP Jobs and the Economy task force, told Tax Notes there will be a “skinny version” of the House GOP Platform and a less widely circulated “deep blueprint for legislative work to lay out that first year of Congress.”
Extending portions of the Tax Cuts and Jobs Act past their December 31, 2025 expiration will be at the core of the the House Republican tax plan— including 2017’s tax reductions for individuals, the 20 percent rate cut on pass-through income, and bonus depreciation. (Tax Notes, Sept. 15)
The White House released its own economic blueprint last week, reciting recent accomplishments and signaling tax measures it plans to pursue, including tax increases on capital gains, carried interest, and the step-up in basis of assets at death, as well as a new minimum tax on billionaires’ wealth. (White House news release and blueprint, Sept. 9)
Meanwhile, the Biden administration announced plans on Wednesday to distribute $900 million throughout the country to build electric vehicle infrastructure across 53,000 miles of the national highway system—funding that is part of last year’s bipartisan infrastructure law. (PoliticoPro, Sept. 14)
Transportation Secretary Pete Buttigieg said, “With the first set of approvals we are announcing today, 35 states across the country—with Democratic and Republican governors—will be moving forward to use these funds to install EV chargers at regular, reliable intervals along their highways.” (Approvals and each state’s deployment plan for 2022)

The CR, midterm elections, and the legislative outlook for the lame-duck session will be among the topics of discussion during The Roundtable’s Fall Meeting on Sept. 20-21 in Washington.

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Congress Focuses on Stopgap Federal Funding to Avoid Government Shutdown

Posted on September 9, 2022October 27, 2023 by Trey Jackson

U.S. Capitol

Congress this month will consider a $47 billion emergency funding request from the White House as part of a “continuing resolution” (CR) spending bill that would avoid a partial government shutdown starting Oct. 1. (Roll Call, Sept. 6, White House request, Sept. 2)

Legislative Timing

Senate Majority Leader Chuck Schumer (D-NY) said this week, “We’re hoping the CR would go to about mid-December and then we might do an omnibus”—a bill that would fund the government through the remainder of the federal fiscal year (Sept. 30, 2023). However, the November mid-term elections could push consideration of an omnibus budget to the congressional lame-duck session. (Reuters, Sept. 7)
The CR may also include legislation to fast-track federal permits for energy projects, which Schumer and Sen. Joe Manchin (D-WV) agreed to last month in principle as part of the Democrats’ effort to pass the Inflation Reduction Act of 2022 (IRA).
Schumer said on Wednesday, “Permitting reform is part of the IRA, and we will get it done.” (PoliticoPro, Sept. 7 and E&E Daily, Sept. 8)

The IRA & CRE

The IRA, passed on strict party-line votes in both chambers last month, is a $790 billion tax-and-spending package that includes the largest federal clean energy investment in U.S. history. (Roundtable Weekly, Aug. 12)
Roundtable fact sheets detail the IRA’s impact on Clean Energy Tax Incentives and Revenue Provisions affecting commercial real estate.
The Real Estate Roundtable has encouraged Congress for several years to develop clean energy tax incentives that are more usable for building owners, managers, and financiers—and more impactful to help meet national carbon reduction goals.
The Roundtable will stay engaged with lawmakers as the Treasury Department proposes rules and guidance on a range of issues to implement the IRA’s provisions.

Clean Energy Spending

John Podesta

The Biden administration confirmed last week that its top climate advisor Gina McCarthy is leaving her post. The White House also announced that John Podesta, above, will become a senior advisor for clean energy innovation, oversee the implementation of the IRA’s climate and energy spending, and serve as chair of President Biden’s National Climate Task Force. Podesta led former President Barack Obama’s climate strategy. (Wall Street Journal and CNBC, Sept. 2)
Private sector investments in battery factories, solar panel manufacturing and other projects in the weeks since President Biden signed the IRA are part of the New York Time’s Sept. 7 article, “Clean Energy Projects Surge After Climate Bill Passage.”

Roundtable members will meet in Washington, DC on Sept. 20-21 to discuss the IRA’s impact on CRE, the outlook for the midterm elections, and other topics, such as the Federal Reserve’s concurrent meeting on monetary policy.

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Democrats Focus on Pared-Down Reconciliation Bill, Biden Takes Action on Climate

Posted on July 23, 2022October 27, 2023 by Trey Jackson

Democrats scaled down their ambitions for a budget reconciliation bill in the wake of Sen. Joe Manchin’s (D-WV) recent rejection of any climate and tax legislative package. Instead, congressional Democrats this week focused on a limited prescription drug pricing and health care subsidy bill as President Biden announced executive actions to make progress on climate initiatives. (Roundtable Weekly, July 15 and New York Times, July 20)

Senate Democrats Pivot

Senate Majority Leader Chuck Schumer (D-NY) said this week that Democrats are moving forward on a smaller party-line package before the Senate summer recess begins on August 5. Policymakers are also mindful that budget reconciliation rules expire on Sept. 30 as the November mid-term elections approach. (AP, July 19 and July 15)
Roundtable Tax Policy Advisory Committee Member Russ Sullivan (Brownstein Hyatt Farber Schreck, LLP) profiles the steps and timeline involved to produce a reconciliation bill in his article, “How Likely is it that we see a Reconciliation Law Passed in this Congress?” (JD Supra, July 12)

White House Climate Action

Biden’s executive actions “to turn the climate crisis into an opportunity” fell short of declaring a federal emergency, which would have unlocked broad federal powers to develop clean energy. (Wall Street Journal and White House fact sheet, July 20)
With climate legislation stalled in Congress, and constrained by a recent SCOTUS ruling that restricts the EPA’s ability to regulate greenhouse gases, Biden’s actions to increase offshore wind capacity and help communities cope with extreme heat have been described as “incremental” and “minuscule compared to his ambitious plan” for a net-zero emissions economy by 2050. (Wall Street Journal and POLITICO, July 20)
Given the limited federal response, Biden stressed that governors, mayors, state agency heads, and public utility commissioners—as well as developers—need “to stand up and be part of the solution.” (President Biden remarks and video, July 20)

Trends in CRE, the congressional agenda, and the upcoming lame-duck session of Congress after the mid-term elections will be among the topics discussed during The Roundtable’s Fall Meeting on Sept. 20-21 in Washington, DC.

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Sen. Manchin Narrows Scope of Possible Reconciliation Bill While Waiting for More Inflation Data

Posted on July 16, 2022October 27, 2023 by Trey Jackson

Sen. Joe Manchin (D-WV), a key centrist in Democrats’ ongoing efforts to pass a party-line budget reconciliation bill, said this week he would not move forward on an economic package that contains climate provisions or tax increases, upending weeks of negotiations with Senate Majority Leader Chuck Schumer (D-NY). Manchin, above, added he would support a limited measure this month aimed at reducing pharmaceutical prices and extending federal subsidies for buying health care coverage. (The Washington Post, July 14, Bloomberg, July 15 and Roundtable Weekly, June 17)

Inflation & Timelines

Manchin explained his position during a West Virginia MetroNews interview this morning: “I said, Chuck [Schumer], until we see the July inflation figures, until we see the July Federal Reserve rates, interest rates, then let’s wait until that comes out so we know that we were going down the path that won’t be inflammatory to add more to inflation. Inflation is absolutely killing many, many people.” (Full interview and The Hill, July 15)
The July Consumer Price Index is scheduled for release Aug. 10, after surging to an annual inflation rate of 9.1% in June. (U.S. Bureau of Labor Statistics, July 13)
Democrats are pushing to pass a bill before the Congressional recess begins on Aug. 8. If any agreement is reached, a bill would have to be drafted, scored, and debated, which could take several weeks as the midterm elections loom. The underlying budget reconciliation instructions authorizing a filibuster-proof bill do not expire until September 30. (The Washington Post, July 15)
The Roundtable on July 13 commented on the evolving reconciliation talks on its Twitter feed, “As policy negotiations continue, we are working to ensure that any scaled-back bill doesn’t include anti-growth, anti-real estate tax hikes such as repeal of like-kind exchanges; increased capital gain tax rates; or revisions to taxation of pass-through entities.”

The only option for Democrats to pass a reconciliation bill this month may be reduced to a limited version focused on prescription drug pricing and a two-year extension of Affordable Care Act funding to prevent major insurance premium hikes. The prescription drug legislation should raise more than sufficient revenue ($288 billion) to pay for a temporary extension of the health care insurance subsidies. (CNBC, July 15)

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Rising Inflation Threatens Biden Infrastructure Plan as White House Aims to Combat Price Pressures

Posted on June 24, 2022October 27, 2023 by Trey Jackson

As rising inflation diminishes the spending power of the trillion-dollar bipartisan infrastructure law enacted seven months ago, the Biden administration continues to work on a potential reconciliation deal with congressional Democrats that could combat price pressures and revive parts of the president’s agenda. (BGov, June 23 and Politico, June 17)

Rising Construction Costs & Labor Shortages

The costs of gas, food and other consumer staples surged to a four-decade high last month, registering an 8.6% increase from 12 months earlier. (US Bureau of Labor Statistics, June 14)
Rising inflation is also increasing construction costs, which dilutes the buying power of states to implement federal aid on large infrastructure projects. States are receiving project bids up to 30% above their original expectations from contractors citing supply problems, spiking material costs, and labor shortages. (BGov, June 23 and Politico, June 17)
An analysis by the Associated Builders and Contractors of recent labor data shows construction prices jumped 21% from a year ago, while nonresidential construction prices registered a 21.9% increase. Iron and steel prices were up 103% from 2020, while concrete increased 17% from two years ago. (Associated Builders and Contractors and Bureau of Labor Statistics, June 14)
The Biden administration is seeking to support industries that may experience increased demand from new infrastructure investment—and assist workers acutely affected by the pandemic. The White House recently announced a “Talent Pipeline Challenge” initiative that aims to connect employers to organizations that offer job training through unions, industry associations, and community colleges for construction and jobs. (White House fact sheet and Bloomberg Law, June 17)
White House infrastructure czar Mitch Landrieu told Bloomberg this week, “As long as there is a financial crunch on supply stuff and on inflation stuff, it’s going to affect everything that we’re doing in the $1.2 trillion at some point in time. Over the long haul, we think that will ease itself.” (BGov, June 23)
Similarly, Transportation Secretary Pete Buttigieg said, “The tightness we’re experiencing today is not what you would see across the five-year life of this funding, let alone the longer life of the construction projects themselves.” (Politico, June 17)

Legislative Goal

White House National Economic Council Director Brian Deese addressed administration efforts to combat inflation on June 19 with CBS News’ Face the Nation. He said, “The single most impactful thing that we could do right now is to work with Congress to pass legislation that would lower the costs of things that families are facing right now” such as prescription drugs and utility costs. (CBS transcript of Deese interview, June 19)
The legislation Deese referenced is a scaled-back reconciliation package that may include provisions on climate, deficit reduction, and prescription drug costs—and reportedly is the focus of talks involving Senate Majority Leader Chuck Schumer (D-NY) and Sen. Joe Manchin (D-WV). (Roundtable Weekly, June 17)
The big four Congressional leaders (Schumer, McConnell, Pelosi and McConnell) met on Tuesday and appear increasingly close to reaching agreement on a separate $50 billion bill to finance increased R&D spending, semiconductor production, and measures to address economic competitiveness with China. (Reuters, June 21)
Inflation also dominated the concerns of policymakers this week during testimony by Fed Chair Jerome Powell before the Senate Banking Committee and House Financial Services Committee. (C-Span, June 22 and June 23)

Powell stated, “Inflation has obviously surprised to the upside over the past year, and further surprises could be in store. We therefore will need to be nimble in responding to incoming data and the evolving outlook. And we will strive to avoid adding uncertainty in what is already an extraordinarily challenging and uncertain time.” (Federal Reserve written testimony)

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Reconciliation Legislation Talks Grind On

Posted on June 18, 2022October 27, 2023 by Trey Jackson

PoliticoPro reported today that Senate Majority Leader Chuck Schumer (D-NY), above, and Sen. Joe Manchin (D-WV) are grinding through talks about a scaled-back reconciliation package that may include provisions on climate, deficit reduction, and prescription drug costs.

Discussions & Deadlines

The Senators met twice this week to discuss the contours of a potential trimmed-down alternative to the defunct Build Back Better Act before Sept. 30, when current budget protections for a party-line spending bill expire. (PoliticoPro, June 17)
The Senate is scheduled to go on a two-week recess after July 24, then return for four weeks before the August recess.
PoliticoPro also reported that Schumer is working with the Senate parliamentarian to pave the way for a possible July or August vote on such a bill. Under reconciliation rules, a legislative package would require majority approval in the evenly divided Senate, as Vice President Kamala Harris could potentially cast a tie-breaking vote.
Schumer and House Speaker Nancy Pelosi (D-CA) met with President Biden on Wednesday to discuss “their plans for fighting the global problem of inflation that is affecting every major economy, such as bringing down prescription drug and energy costs…” according to a White House read-out.
Pelosi commented after the meeting on negotiations about a reconciliation bill. “It’s alive. I’ll just say that.” (The Hill, June 16)

House Dems Push for Senate Progress

On Thursday, 175 Democrats wrote to President Biden asking him to “reach a deal and sign into law as swiftly as possible a revised reconciliation package that includes the climate investments” previously passed by the House.” (E&E News, June 17)
The House Democrats warned “the window to achieve a deal is rapidly closing, and so time is of the essence.” (CQ, June 16)
In May, discussions between Schumer and Manchin were reportedly addressing a pared-down package involving $800 million to $1 trillion in revenue from a new minimum tax on large company profits and increased IRS enforcement. Half of these revenues would go to deficit reduction. (Wall Street Journal, May 28 and Axios, May 27)

The most significant portion of the moribund BBB Act’s proposed spending was focused on climate policies. The Roundtable on Nov. 16, 2021 sent a letter to congressional tax writers detailing five recommendations on green energy tax provisions affecting real estate that were part of the BBB Act. (Roundtable Weekly, Nov. 19, 2021)

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Discussions Gain Momentum on Reconciliation Package

Posted on June 4, 2022October 27, 2023 by Trey Jackson

Congress returns to Washington next week as talks on a scaled-back reconciliation package between Senate Majority Leader Chuck Schumer (D-NY) and Sen. Joe Manchin (D-WV) have reportedly gained momentum, with a focus on climate and energy provisions, deficit reduction, and lowering prescription drug costs. (Wall Street Journal, May 28 and Axios, May 27)

The Reconciliation Route

Axios reported last night that Manchin’s separate talks with several Republican Senators on the contours of a pared-down, bipartisan legislative package have reached an end. (Axios, June 2 and Roundtable Weekly, May 6)
Manchin, who stymied the Build Back Better (BBB) Act from moving forward last year, is the key to a possible alternative Democratic reconciliation bill that could pass the 50-50 Senate on a party-line vote.
Sen. Manchin and Sen. John Thune (R-SD), who holds the number two position in Senate Republican leadership, will be among the guests during The Roundtable’s Annual Meeting on June 16.
Sen. Kyrsten Sinema (D-AZ) is also a crucial centrist vote. She discussed policy issues at The Roundtable’s April 25 Spring Meeting. (Roundtable Weekly, April 29)

Scaling Back

The Schumer-Manchin discussions are now reportedly addressing a pared-down package involving $800 million to $1 trillion in revenue from a new minimum tax on large company profits and increased IRS enforcement. Half of these revenues would go to deficit reduction. (Wall Street Journal, May 28 and Axios, May 27)
Some of the remaining revenues would reportedly focus on possible tax incentives for reducing carbon emissions and support for existing energy sources. An extension is also under consideration for Affordable Care Act health insurance subsidies, which are scheduled to expire later this year as the November mid-terms approach.

The most significant portion of the moribund BBB Act’s proposed spending was focused on climate policies. The Roundtable on Nov. 16, 2021 sent a letter to congressional tax writers detailing five recommendations on green energy tax provisions affecting real estate that were part of the BBB Act. (Roundtable Weekly, Nov. 19, 2021)

Time is short to move any new legislative package via reconciliation with midterms looming. Manchin has stated the only deadline is Sept. 30 to pass a spending bill, although other policymakers have signaled it would have to be done before the August recess. (Wall Street Journal, May 28 and Reuters, May 27)

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White House Releases Plans to Battle Inflation and Streamline Infrastructure Permitting; Congressional Leaders Urge Swift Implementation of New EB-5 Law

Posted on May 13, 2022October 27, 2023 by Trey Jackson

President Joe Biden this week committed that his administration’s top economic priority is battling inflation. Biden’s efforts to combat rising prices include proposals that would increase taxes on large corporations and the wealthiest Americans – and possibly eliminate Trump-era tariffs on foreign imports. (White House Inflation Plan | News conference video | The Hill, May 10)

The Labor Department reported that consumer prices increased 8.3% in April compared to one year ago, as inflation remains near a four-decade high. (Labor Department news release and AP, May 11)

Federal Reserve Chair Jerome Powell discussed the Fed’s inflationary goals during an interview this week with Marketwatch, stating, “Whether we can execute a soft landing or not, it may actually depend on factors that we don’t control.” The Fed recently approved the biggest interest hike in 22 years and announced plans for reducing its nearly $9 trillion balance sheet. (CNBC, May 12)

Powell also recently stated, “There is a broad sense on the committee that additional 50 basis point increases should be on the table at the next couple of meetings.” He added, “the American economy is very strong, and well-positioned to handle tighter monetary policy.” (Wall Street Journal, May 4)

A semi-annual report released this week by the Fed detailed risks to financial stability, pointing to the potential impact of inflation, sharply rising interest rates and the war in Ukraine. The report also flagged a decline in liquidity. “While the recent deterioration in liquidity has not been as extreme as in some past episodes, the risk of a sudden significant deterioration appears higher than normal,” according to the report. (Wall Street Journal, May 9)

Powell was approved this week to serve a second term as Fed Chair by a bipartisan Senate vote of 80-19. (Politico, May 12)

Infrastructure Permitting

The White House this week also unveiled a plan to strengthen and accelerate federal permitting and environmental reviews funded by the Infrastructure Investment and Jobs Act (IIJA) passed last November. (White House Fact Sheet, May 11 and Roundtable Weekly, Nov. 12, 2021)

The Biden administration said its Permitting Action Plan will improve environmental reviews to avoid duplicity and will create sector-specific teams aimed at speeding permitting and resolve supply chain issues that hinder construction.

EB-5 Regional Centers

Four congressional leaders wrote a bipartisan letter to Homeland Security Secretary Alejandro Mayorkas this week to counter a statement by the U.S. Citizenship and Immigration Services that existing EB-5 regional centers must apply for recertification. The USCIS statement, if put into effect, would delay regional center enterprises from seeking new foreign investment pending reapproval. (Congressional letter, May 9)

The letter was signed by Senate Majority Leader Chuck Schumer (D-NY), House Judiciary Committee Chair Jerrold Nadler (D-NY), and Senate Judiciary Committee members John Cornyn (R-TX) and Lindsey Graham (R-SC).

Their letter clarified that previously existing regional centers are not required to be recertified under the EB-5 Reform and Integrity Act of 2022 passed last March – but the centers must swiftly meet all of the new law’s anti-fraud and homeland security protections. (EB-5 investors blog, May 10)

USCIS’s position is also the subject of a pending legal challenge in California federal trial court. (Behring Regional Center LLC v. Mayorkas)

The Roundtable-supported EB-5 Reform and Integrity Act was the first significant update to the regional center program since its creation by Congress in the early 1990s. (Roundtable Weekly, March 11, Roundtable news release and EB-5 Fact Sheet)

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Senators Joe Manchin and Lisa Murkowski Aim for Bipartisan Compromise on Energy Policy as Alternative to Stalled Build Back Better Act

Posted on May 6, 2022October 27, 2023 by Trey Jackson

Senators Joe Manchin (D-WV), left, and Lisa Murkowski (R-AK), right, have led bipartisan meetings with lawmakers over the last two weeks to explore potential areas of agreement for a scaled-back energy and climate legislative package before the midterm elections. (Politico Morning Energy and E&E News, May 5 | The Hill, April 25)

BBB Energy Measures

$300 billion in clean energy tax credits were part of last year’s failed, multi-trillion Build Back Better (BBB) Act, which Democrats advanced through the House under fast-track, filibuster-proof budget reconciliation rules. The Roundtable sent a letter in November to congressional tax writers with specific recommendations to improve the BBB bill’s energy tax provisions affecting real estate. (Roundtable Weekly, Nov. 19)
The BBB legislation stalled in the Senate after failing to attract key Democratic votes from Sens. Manchin and Kyrsten Sinema (AZ). Manchin’s concern about rising inflation led to his opposition of the bill. (Wall Street Journal, April 28)
Last week, Sen. Sinema discussed the post-BBB policy landscape during The Roundtable’s Spring Meeting in Washington. Other featured speakers included Sens. Bill Cassidy (R-LA) and John Hickenlooper (D-CO), who are among the members of the bipartisan group. (Roundtable Weekly, April 29 and E&E News, May 5)

Search for Agreement

This week, the BBB Act’s energy-related tax credits were a focus of the small bipartisan group, which also included Senate Environment and Public Works Chair Tom Carper (D-DE), above.
Carper on May 5 said, “I think some progress was made in better understanding what the Finance Committee voted on in the energy tax package that was debated and voted on months ago.” He added, “Republicans will not be anxious to support any kind of reconciliation bill. But let’s see how much we can get done in a bipartisan approach.” (Politico Morning Energy, May 5)
Another meeting participant, Sen. Kevin Cramer (R-ND), said general discussions need to eventually produce an agreement on specific measures “long before” the July 4th recess. Cramer also told E&E News that any Republican support for a bipartisan package “depends on how long Santa’s list is.”
Support for a bipartisan clean energy package would need to clear a 60-vote threshold in the Senate to pass the evenly-divided chamber before November’s midterm elections.

Sen. Chris Van Hollen (D-MD) recently stated, “I think it’s a make-or-break moment for the elements of Build Back Better that are still on the table. The clock is ticking. This is a perishable moment.” (Wall Street Journal, April 28)

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Inflation Threatens Biden Agenda as Fed Chair Powell Addresses Raising Interest Rates

Posted on April 22, 2022October 27, 2023 by Trey Jackson

President Joe Biden traveled throughout the country this week to promote the benefits of infrastructure projects as rising inflation threatens his administration’s revamped “Building a Better America” domestic agenda. Meanwhile, Federal Reserve Chair Jerome Powell affirmed expectations that interest rates will begin increasing next month with consumer inflation running at an annual pace of 8.5 percent. (NBC News, April 19 and Associated Press, April 20)

Revising “Build Back Better”

Democrats are expected to resuscitate parts of the moribund Build Back Better (BBB) Act when Congress returns on April 25 by focusing on a scaled-back package to attract enough party line support in the 50-50 Senate for passage. (Roundtable Weekly, April 15)
A key consideration for Senate Democrats and the White House will be agreement on policy priorities with Sens. Joe Manchin (D-WV) and Kyrsten Sinema (D-AZ), who rejected the administration’s BBB social and climate policy package late last year. (Roundtable Weekly, Jan. 21)
Sen. Manchin cited inflation as one of his top concerns about passing more spending bills. “Getting inflation under control will require more aggressive action by a Federal Reserve that waited too long to act,” Manchin recently said. (The Hill, April 12)
Sen. Sinema will discuss the current policy landscape in Congress with Real Estate Roundtable members next week in Washington DC during The Roundtable’s April 25 Spring Meeting.
Rising consumer prices and inflation have been a focus of Republicans as the mid-term elections are only about six months away. (BGov and Fortune, April 20)
House Ways and Means Committee Ranking Member Kevin Brady (R-TX) on April 12 discussed inflation’s threat to small businesses and the administration’s agenda on CNBC’s Squawkbox.

Fed & Interest Rates

The Consumer Price Index’s rise to 8.5 percent last month – the fastest annual increase in 40 years – sparked expectations that the Fed will move aggressively to raise interest rates. (Bureau of Labor Statistics, April 12 and CBS News, April 21)
The Federal Reserve’s Open Market Committee will meet next on May 3-4 to consider monetary policy, the discount rate and consider a reduction in the nearly $9 trillion in bonds on its balance sheet.
Powell, above, commented yesterday on the Fed’s target for annual price increases. “We really are committed to using our tools to get 2 percent inflation back,” he said, adding, “It’s absolutely essential to restore price stability.”
Powell also noted a half point interest rate increase next month may be the start of future interest rate increases. “I would say 50 basis points will be on the table for the May meeting,” he stated. (CNBC, April 21)
He also said the Fed will act to get demand and supply back in balance, “so that inflation moves down and does so without a slowdown that amounts to a recession.” (CNBC, April 21)
The Fed also released this week its latest “Beige Book” containing anecdotal information on current economic conditions. The report stated “supply chain backlogs, labor market tightness, and elevated input costs continued to pose challenges” and that “outlooks for future growth were clouded by the uncertainty created by recent geopolitical developments and rising prices.” (Fed’s Beige book, April 20)

The Roundtable’s Spring Meeting next week will include a discussion with former Fed Board Member Kevin Warsh on inflation, interest rate expectations, potential asset bubbles and other economic challenges.

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