Category: Policy Landscape

Debt Ceiling Increase Enacted as House Democrats Consider Cuts to $3.5 Trillion Reconciliation Bill

Posted on by Trey Jackson

Capitol with flag close

President Joe Biden yesterday signed a $480 billion increase in the federal government’s debt limit to $28.9 trillion, narrowly avoiding an Oct. 18 national default deadline. The debt increase – passed by the Senate last week and the House on Tuesday – sets the stage for another fiscal cliff negotiation in less than two months, when both the debt limit and funding for the government run out on Dec. 3. (Associated Press, Oct. 14 and Reuters, Oct. 13) 

Infrastructure Funding 

  • Democrats this week continued to struggle on how to cut the scope and cost of the $3.5 trillion “human” infrastructure bill, after an intraparty split between moderates and progressives postponed a vote on a scaled-down bill in the House. (Wall Street Journal, Oct. 1)
  • House Speaker Nancy Pelosi (D-CA) set an Oct. 31 target date to pass revised legislation under the budget reconciliation process, which requires a simple majority in the 50-50 Senate to bypass Republican opposition. (Bloomberg, Oct. 2) 

Cuts and Scale 

Schumer and Pelosi

  • Pelosi sent an Oct. 11 letter to her caucus members as they work to cut Biden’s reconciliation proposal from $3.5 trillion to approximately $2 trillion. “Overwhelmingly, the guidance I am receiving from Members is to do fewer things well,” Pelosi wrote. (PoliticoPro, Oct 13)
  • On Oct. 12, Pelosi also commented on possible cuts to the length of certain spending programs, stating, “What would be the first to go? … the timing would be reduced in many cases to make the cost lower.” (News conference transcript)
  • In the Senate, Majority Leader Chuck Schumer (D-NY) yesterday sent a letter to his fellow Democrats urging unity as they consider a scaled-back infrastructure bill. “To pass meaningful legislation, we must put aside our differences and find the common ground within our party. As with any bill of such historic proportions, not every member will get everything he or she wants,” Schumer wrote. (Associated Press, Oct. 14) 

Roundtable Concerns 

Marcus and Millichap Oct 21 2021 tax webinar

  • Real Estate Roundtable President and CEO Jeffrey DeBoer will participate in an Oct. 21 Marcus & Millichap webinar on the state of play in infrastructure proposals, the industry’s tax policy concerns and the possible impact on commercial real estate. (Register here)
  • The tax bill passed by the House Ways and Means Committee does not include restrictions on like-kind exchanges, taxation of gains at death, ordinary income treatment for carried interest, and tax parity between capital gains and ordinary income.  The Roundtable argued that these Biden administration tax proposals could harm job growth, local tax revenue, and the economic recovery. 
  • As negotiations continue on a multi-trillion reconciliation proposal, The Roundtable is urging lawmakers to ensure that any final agreement on tax changes to fund a bill would treat pass-through businesses fairly and equitably. The current reconciliation bill in the House would raise the top marginal income tax rate on many pass-through business owners from 29.6% today to 46.4% (a 57% increase). 
  • The Roundtable believes this level of increase on pass-through businesses was unintended by Members of Congress and could undercut the bill’s own objectives of stimulating job growth, improving housing availability, and promoting investment in economically struggling communities, among other priorities.

Additional tax issues affecting CRE are summarized in The Roundtable’s summary on Real Estate Tax Issues and Budget Reconciliation Legislation.  

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Senate Passes Short-Term Debt Limit Increase as Democrats Aim to Reduce Cost of Human Infrastructure Package

Posted on by Trey Jackson

Capitol building bright

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 

DC landscape sunset

  • 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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Infrastructure Negotiations Continue as Congress Extends Government Funding to Dec. 3; Debt Ceiling Deadline Looms

Posted on by Trey Jackson

U.S. Capitol

Intense negotiations among moderate and progressive Democrats on the scope and cost of the $3.5 trillion “human” infrastructure package continued this week, delaying a vote yesterday on the $1 trillion bipartisan “physical” infrastructure bill. House progressives have insisted they will not vote for the bipartisan bill until Senate centrists commit to support a multitrillion-dollar social benefits package. 

Moderates in the Balance 

  • President Joe Biden, House Speaker Nancy Pelosi (D-CA) and Senate Majority Leader Chuck Schumer (D-NY) this week engaged moderate Sens. Joe Manchin (D-WV) and Kyrsten Sinema (D-AZ) in hopes of sealing the support of all 50 Senate Democrats on the “human” infrastructure package. That bill’s passage depends on the budget reconciliation process to bypass Republican opposition. (Reuters, Sept. 28)
  • Sen. Manchin this week released a document indicating the terms for his potential support of the reconciliation package. Manchin’s conditions, provided to Schumer on July 28, cite a topline cost of $1.5 billion for spending on social programs and climate change – $2 trillion less than the package that Democratic progressives have agreed to support.  (Politico, Sept. 30)
  • The Manchin document included proposals to raise the corporate tax rate to 25% and increase the top tax rate on ordinary income to 39.6%. It also lists as an offset condition to “end carried interest,” raise the capital gains tax rate to 28 percent, and notes that “any revenue exceeding $1.5 trillion” should be used to reduce the national deficit. 
  • Tax issues affecting CRE in the “human” infrastructure package are summarized in The Roundtable’s “Pass-Through Businesses and the Reconciliation Bill” document. 
  • White House Press Secretary Jen Psaki yesterday said, “A great deal of progress has been made this week, and we are closer to an agreement than ever. But we are not there yet, and so, we will need some additional time to finish the work.”  (White House Statement, Sept. 30) 

CR and Debt Ceiling 

Treasury Department

  • Meanwhile, Congress passed a Continuing Resolution (CR) yesterday to fund the government through Dec. 3. President Biden signed the bill hours before a partial federal shutdown was scheduled to take effect. (BGov and CQ, Oct 1)
  • The flurry of activity in Washington this week also included action on the debt ceiling. Legislation that would suspend the nation’s debt limit until December 2022 passed the House on Sept. 29 but is expected to fail in the Senate, where 60 votes are needed to advance the bill in the 50-50 upper chamber. Republicans oppose the measure, insisting that Democrats should suspend the debt ceiling through the budget reconciliation process, which requires 50 votes. (CNBC, Sept. 29)

Treasury Secretary Janel Yellen testifying before Congress

  • The debt ceiling must be suspended by Oct. 18 to avoid the government from defaulting on its financial obligations, according to Treasury Secretary Janet Yellen’s Sept. 28 testimony before the Senate Banking Committee.
  • Unless Congress increases the government’s authority to borrow more, “It would be disastrous for the American economy, for global financial markets, and for millions of families and workers,” Yellen said. Federal Reserve Chairman Jerome Powell also testified, supporting Yellen’s view about the catastrophic economic consequences if the government were to default. (AP, Sept. 28)

The potential impact of infrastructure policy proposals on commercial real estate markets, employment and investment in communities Washington will be the focus of discussion during The Roundtable’s Fall Meeting on Oct 5.

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Democrats Advance Human Infrastructure Package While Facing Tight Deadlines on Physical Infrastructure Bill, Budget Funding and Debt Ceiling

Posted on by Trey Jackson

Capitol Building in Washington, DC side view
House Democrats this week advanced 13 committee bills – including positive measures affecting commercial real estate – that will be assembled into a massive $3.5 trillion “human” infrastructure package for policymakers to consider as soon as this month. (See Roundtable Weekly stories below for details on tax, energy and transportation legislation). 

Human and Physical Infrastructure 

  • Democrats aim to pass President Joe Biden’s massive social spending and tax package in the House and Senate without Republican support using the budget reconciliation process – despite signals of resistance from some caucus members in a narrowly divided Congress. (BGov, Sept. 15)  
  • Additionally, House Speaker Nancy Pelosi (D-CA) has set a Sept. 27 deadline for the House to vote on a separate, bipartisan “physical” infrastructure bill passed by the Senate on Aug. 10. (Roundtable Weekly, Sept. 10 and Aug. 20) 
  • Congress also needs to act on FY22 government funding by October 1 to avoid a partial shutdown – and reach agreement on raising the federal debt ceiling in October to avoid a national credit downgrade or default. (Politico, Sept. 12) 

Roundtable Response

Real Estate Roundtable Town Hall on Reconciliation bill

[Photo, right to left: Roundtable Chair John Fish (Chairman and CEO, Suffolk); Roundtable President and CEO Jeffrey DeBoer and Senior Vice President & Counsel Ryan McCormick during today’s Town Hall discussion on the House reconciliation package.]

  • The physical infrastructure bill’s impact on CRE was the focus of a discussion published Sept. 15 in The Real Deal, featuring Roundtable Chair John Fish (Chairman and CEO, Suffolk) and Roundtable President and CEO Jeffrey DeBoer. 
  • Fish stated in the article, “At the end of the day, these are investments that the government is going to be sponsoring, that creates economic activity, job creation, and a sense of equality across our communities of America.”
  • DeBoer commented, “We think it’s very important and very much needed, long overdue. I think everyone agrees that what is needed immediately is to work on our infrastructure, repairing roads, bridges, inter-city rail, broadband, water systems, and all of these things are definitely needed.” (The Real Deal, Sept. 15)
  • The Real Estate Roundtable also held an all-member Town Hall discussion this afternoon to address specific measures in the House’s human infrastructure bill, including its tax policy aspects. The event featured The Roundtable’s John Fish, Jeffrey DeBoer and Senior Vice President & Counsel Ryan McCormick. 
  • A coalition of 13 real estate trade organizations, including The Roundtable, yesterday urged congressional leaders to raise the statutory debt limit as soon as possible. The letter stated, “Given the more than $8.6 trillion in mortgage debt backed by the federal government through Fannie Mae, Freddie Mac, Ginnie Mae and other federal agencies, the housing and real estate markets are particularly susceptible to any instability stemming from concern about the U.S. meeting its financial obligations.” (Coalition letter, Sept. 16) 

The many policy issues now in play for CRE will be the focus of discussions during The Roundtable’s Fall Meeting on Oct. 5 in Washington, DC (Roundtable-level members only). 

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Congress Faces Daunting Fall Agenda of Infrastructure Bills, Budget Funding and Debt Limit Deadlines

Posted on by Trey Jackson

red lines to Capitol

Several significant issues affecting commercial real estate converge this month as Congress faces deadlines on a $550 billion “physical” infrastructure bill, a separate $3.5 trillion “social” infrastructure package, government funding for FY2022, and the national debt ceiling.  

The full Senate will return on Sept. 13 and the House on Sept. 20. Deadlines to watch as policymakers face a daunting agenda: 

Sept. 15 — Reconciliation Bills Expected 

  • House committees this week began work on completing various portions of the massive social infrastructure package – including tax revenue raisers impacting CRE – by a Sept. 15 deadline set by House Speaker Nancy Pelosi (D-CA). The $3.5 trillion package will be considered under “reconciliation” budget rules that would only require Democratic votes to pass. (The Hill, Sept. 9 and Roundtable Weekly tax story below)
     
  • Senate Majority Leader Chuck Schumer (D-NY) has instructed his committees to finalize their parts of the upper chamber’s reconciliation bill by Sept. 15 – although this deadline is non-binding and expected to slip. (CNBC, Aug. 11)
     
  • Sen. Joe Manchin (D-WV) wrote in a Sept. 2 Wall Street Journal op-ed that Congress should take a “strategic pause” on the reconciliation package. In a 50-50 Senate, the votes of moderate Democrats such as Manchin and Krysten Sinema (D-AZ) are crucial for passage. 

Sept. 27 — House infrastructure Vote 

House of Reps vote

  • The Senate on Aug. 10 passed a bipartisan bill addressing physical infrastructure with $550 billion in new spending. (Roundtable Weekly, Aug. 13) 
  • Pelosi has set a Sept. 27 deadline for the House to vote on the Senate-passed bill. Pelosi’s move accommodated a group of 10 moderates in her caucus who insisted on de-coupling House votes on physical and human infrastructure legislation. (Roundtable Weekly, Aug. 20)
     
  • Pelosi can afford to lose only three Democratic votes in the narrowly divided House if all Republicans oppose a bill. (New York Times, Sept 5)
     
  • The Real Estate Roundtable held an all-member Infrastructure Town Hall on Aug. 12 to discuss the Senate infrastructure bill, what lay ahead in the House, and the potential impact on commercial real estate. (Roundtable Weekly, Aug. 13)   

October – Federal Government Funding and Debt Ceiling 

Treasury logo on flag background

 

  • Funding for the federal government expires Oct. 1 unless an FY22 appropriations bill is enacted. Congress is expected to pass a stopgap spending bill – known as a Continuing Resolution (CR) – that would fund agencies at current levels to avoid a partial government shutdown. 
  • The CR could also include a measure to suspend or raise the national debt ceiling, which would require at least 10 Senate Republican votes to pass under regular order. 
  • Democratic leaders plan to pursue a bipartisan vote to waive the debt limit. (Reuters and PoliticoPro, Sept. 8) However, 46 Senate Republicans pledged in an August 10 letter that they “will not vote to increase the debt ceiling, whether that increase comes through a stand-alone bill, a continuing resolution, or any other vehicle.” (Bloomberg and The Wall Street Journal, Aug. 10) 
  • Congress must address the national debt ceiling by October, according to a Sept. 8 letter from Treasury Secretary Janet Yellen to congressional leaders. 

The Roundtable will discuss how all these issues impact CRE and the national economy during its Fall Meeting on Oct. 5 in Washington, DC (Roundtable-level members only). 

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Policymakers Remain Far Apart on Bipartisan Infrastructure Package; Senate Ruling Limits Reconciliation as Fast-Track Option

Posted on by Trey Jackson

President Biden and Sen. Capito

Policymakers this week remained far apart on the scope and cost of a possible bipartisan infrastructure package, as President Biden floated a 15% minimum corporate tax to partially fund his pared-down proposal. Meanwhile, a recent Senate Parliamentarian ruling would limit the use of a fast-track budget process called “reconciliation” that could allow Democrats to bypass Republicans and pass legislation on a party-line vote. (Washington Post, June 3, The Hill and New York magazine, June 2)  

[Photo above: President Biden discusses infrastructure with Sen. Shelley Moore Capito (R-WV)]

Seeking New Spending

  • President Biden recently reduced his original infrastructure package cost from $2.3 trillion to $1.7 trillion – and is now looking for at least $1 trillion in new spending from Republicans on infrastructure. Biden this week proposed raising these funds partially through a new 15% minimum corporate tax, which would replace his initial proposal to raise the corporate income rate to 28% from 21%. (BGov and New York Times, June 3)
  • Sen. Shelley Moore Capito (R-WV), who is leading GOP lawmakers in negotiations with the White House, last week counteroffered with $928 billion – although it limits new spending to $257 billion for traditional “hard” infrastructure such as roads, bridges and other public works. Republicans proposed the remaining $671 billion come from repurposed funding previously passed as part of the American Rescue Plan Act’s Covid-19 relief effort. Democrats have rejected repurposing of funds. (Roundtable Weekly, May 28 and AP, May 27)
  • The U.S. Conference of Mayors, National League of Cities and National Association of Counties recently expressed their “adamant opposition to any proposal that would detrimentally recoup and repurpose funds allocated to local governments” from coronavirus relief funds. (NLC news release, June 1 and joint letter, May 27)
  • The coalition’s joint letter to congressional leadership, stated, “Local governments are using these critical recovery funds to invest in public safety, vaccine distribution, housing and rental assistance, local economic support, economic and workforce development, broadband expansion, social safety-net services, hospitality and tourism development, and hazard pay for public employees.”

Time is Short

The White House with Washington Monument

  • White House Press Secretary Jen Psaki this week said, “Patience is not unending, and [President Biden’s] wants to make progress. His only line in the sand is inaction. He wants to sign a bill into law this summer.” (White House Press Briefing, June 2)
  • The No. 3-ranked House Democrat, Rep. Jim Clyburn of South Carolina, yesterday said time is short to complete negotiations on a bipartisan package. “I don’t think we should run the risk of not getting something done because the other side is not cooperating.” (Bloomberg’s Balance of Tower, June 3)
  • Sen. Ben Cardin (D-Md.) on Thursday added that Democrats would soon take actions to use the budget reconciliation process to bypass the Senate’s 60-vote requirement to pass legislation and push through a bill on a party line vote.  Cardin said that Democrats are “going as far as we can with Republicans and not delay[ing] it beyond this work period without seeing some action.” (Politico, June 3)
  • Senate Majority Leader Charles Schumer (D-NY) said last week that he wants to move forward on an infrastructure bill in July, whether it is bipartisan or not. (The Hill, May 25)

Limits on Reconciliation

Senate side - Capitol Building

  • The Democrats’ alternative plan to use reconciliation to bypass Republican opposition on infrastructure legislation may be slowed by a recent Senate Parlimentarian ruling. Congressional Democrats used reconciliation in March to pass the administration’s $1.9 trillion pandemic relief package. (Roundtable Weekly, March 12)
  • Senate Parliamentarian Elizabeth MacDonough’s four-page opinion, issued to Senate staff on May 28, stated, “overuse and over-reliance on a hyper-fast track procedure in the ordinarily deliberative Senate … will change the culture of the institution to the detriment of the committee and amendment processes and the rights of all Senators.” (CQ, June 2)
  • The new guidance adds that lawmakers intended the reconciliation provision to be used only “in extraordinary circumstances and not for things that should have been or could have been foreseen and handled” in a regular budget resolution. 

The ruling suggests that Democrats will be restricted to one additional opportunity this year to use reconciliation to pass a filibuster-proof legislative package.  (Roll Call, June 2 and The Hill, June 4)

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Biden Proposes $1.8 Trillion “American Families Plan” Funded by Tax Increases

Posted on by Trey Jackson

Biden Joint Address to Congress

President Biden on April 28 outlined a $1.8 trillion American Families Plan that would fund an expansion of government support for child care, education, paid family leave and other “human infrastructure” initiatives through new tax increases. [Full text of the President’s prepared remarks and CNBC, April 29)

  • Biden proposes to pay for The American Families Plan with tax increases on upper-income taxpayers and new tax enforcement initiatives, including significantly higher tax rates on capital investment. Collectively, the Administration claims these changes would raise $1.5 trillion over 10 years. (American Families Plan Fact Sheet)

Roundtable Response

Jeff DeBoer RER Meeting

  • Real Estate Roundtable President and CEO Jeffrey DeBoer, above, said,  “President Biden’s American Jobs Plan and American Families Plan offer very credible initiatives to address some of our nation’s most pressing needs—a modernized infrastructure, a more comprehensive approach to climate-related matters, as well as increased investments in housing, education and child care.”
  • DeBoer also warned, “As policymakers consider the options to raise this needed revenue, we strongly urge that the focus be on broad-based tax increases that do minimal damage to job creation, risk taking and entrepreneurial activity. Unfortunately, particularly when considered in total, many of the tax proposals accompanying the American Jobs Plan or American Families Plan would reduce economic activity, impede job growth, and diminish opportunities for startup businesses and those less advantaged. The current law in these areas may be in need of review and reform, but repealing these incentives is simply not wise.” (Full Roundtable statement)

Specific Tax Increases

Oval Office Meeting

  • The tax proposals in the American Families Plan include increasing the top tax rate on ordinary income from 37 percent to 39.6 percent, which would impact single filers with income above about $453,000 and married couples with income above approximately $509,000, a White House official said. (The Hill, April 29)
  • Raising the tax rate on capital gains and dividends from 20 percent to 39.6 percent for households making over $1 million. (Tax Foundation, April 23)
  • Restricting gain deferred through like-kind exchanges to no more than $500,000 per-year. (Wall Street Journal, April 28)
  • Stepped-up basis: Taxing unrealized gains in excess of $1 million ($2.5 million per couple) at death, but with an exception for family-owned businesses passed on to heirs who continue to run the business. (American Families Plan Fact Sheet)
  • Reforming the current tax treatment of carried interest: (GlobeSt, April 29)
  • Expanding the 3.8% Medicare tax on earnings and net investment income to apply to additional activities currently outside the scope of the tax.
  • Permanently extending the 2017 Tax Cuts and Jobs Act (TCJA) provision, section 461(l), that restricts the deductibility of active pass-through business losses to $250,000 for an individual or $500,000 for a married couple.
  • Notably absent from the American Families Plan are any proposals related to reinstating the deduction for state and local taxes (SALT).

What’s Next

  • Several Senate Democrats have signaled they do not support all the tax increase proposals. Sen. Sen. Joe Manchin (D-WV), a pivotal centrist lawmaker, along with Sens. Mark Warner (D-VA) and Bob Menendez (D-NJ), members of the Senate Finance Committee, voiced concerns that higher capital gains rates could slow economic growth, according to the Wall Street Journal. 
  • Menendez commented on the proposed increase, “For me, it is what you’re doing, the totality of the package, and how does it affect the ability of growth to continue to take place. That’s how I’m judging it. Right now it seems like a rather high rate to me.”

President Biden plans to host his first meeting since taking office with House and Senate leaders from both parties on May 12, according to a White House official. (BGov, April 29)

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President Biden Signals Flexibility on Infrastructure Plan as GOP Senators Craft Alternative Approach; SALT Repeal May Influence Negotiations

Posted on by Trey Jackson

Biden White House Meeting

President Joe Biden this week met with a bipartisan group of policymakers about the details of his multitrillion infrastructure proposal as a bloc of moderate GOP senators stated they are developing a far less expensive counterproposal that would pare back the definition of what comprises “infrastructure” and fund it with unspecified user fees. (Washington Post, April 14)

  • Sen. Mitt Romney (R-UT), who is involved in talks about an alternative infrastructure plan, said, “The pay-for ought to come from the people who are using it,” suggesting that a transportation mileage charge could be applied to electric vehicle drivers. “Clearly by bringing in additional revenue from actual miles driven is going to create some additional revenue,” Romney said.  (Politico Pro, April 14)
  • Rep. Donald  Payne, Jr., chairman of the House Transportation Subcommittee on Railroads, attended the White House meeting where President Biden said he was “prepared to negotiate” on his new infrastructure-focused economic plan – and expressed support for the Gateway project, a major rail tunnel project between New York and New Jersey. (BGov, April 12)

SALT Caucus

SALT Caucus

  • An effort by members of Congress to repeal the cap on state and local tax deductions (SALT) is adding to the complexity of negotiations over the White House infrastructure proposal. Yesterday, a bipartisan congressional “SALT caucus” was launched to push for the full repeal of the $10,000 limit on state and local deductions, which was enacted as part of the 2017 Republican tax overhaul. (Bloomberg, April 15)
  • It is unclear how many members of the bipartisan caucus would link their support for Biden’s infrastructure proposal, and its increased corporate taxes, to action on the SALT cap.  Reps. Josh Gottheimer (D-NJ) and Tom Suozzi (D-NY), who co-chair the SALT caucus, said they “will not accept any changes to the tax code that do not restore the SALT deduction.” (CNBC, April 15)
  • Additionally, several New York Democrats sent a letter to House leadership on April 13 urging for a full repeal. “We will not hesitate to oppose any tax legislation that does not fully restore the SALT deduction,” according to the letter. (BGov and Wall Street Journal, April 13)

Energy-Efficient Buildings

  • The White House’s infrastructure plan and the importance of energy efficient buildings was noted in a recent New York Times interview with White House National Economic Council Director Brian Deese.
  • Deese stated during the April 9 Ezra Klein Show (podcast), “… it’s been true for multiple years that energy efficiency upgrades in commercial buildings should just happen, and they’re not.  The built environment and industry get less attention but are extraordinary opportunities. And this [infrastructure] plan has a very significant investment in upgrading buildings and making them more energy efficient.”
  • He added, “The jobs doing that happen all around the country. They’re construction jobs, building trades. A lot of it is actually high-value investment, where providing an incentive could actually unlock a bunch of private capital to invest, particularly in the commercial building space.”
  • Deese is scheduled to participate in next week’s Roundtable Spring Meeting, along with U.S. Department of Transportation Secretary Pete Buttigieg. The remote discussions will be available on The Roundtable’s YouTube channel by April 21.

The Roundtable is part of the Build by the 4th coalition, led by the U.S. Chamber of Commerce, which encourages the Biden Administration and Congress to pass a comprehensive infrastructure deal by Independence Day 2021.

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Senate Advances Pandemic Relief Package as President Biden Pushes Infrastructure Plan

Posted on by Trey Jackson

White House with Washington monument in background

Senate Democrats this week advanced an amended, $1.9 trillion pandemic relief package that is expected to pass on a party-line vote – then sent back to the House for final passage before current unemployment benefits expire March 14. (Politico, March 4 and Congress.gov, actions on H.R. 1319)  

  • President Biden, who has championed the COVID-19 legislation, agreed to changes in the package such as restrictions on the use of $350 billion in state and local funding to solidify Democratic support in the 50-50 Senate. (BGov, March 4 and text of the amended Senate bill)
  • CQ reported that financial allocations changes for states and local governments require federal assistance be used for specific purposes, including: 
    • Aid to households, small businesses or nonprofits, or aid to “impacted” industries like tourism, hospitality and travel;
    • Funding government services that reduced due to the pandemic-related hit to tax revenue;
    • “Necessary investments” in water, sewer, or broadband infrastructure. 
  • Senate Majority Leader Chuck Schumer (D-NY) said yesterday, “No matter how long it takes, the Senate is going to stay in session to finish the bill, this week.” (Politico, March 4).
  • Meanwhile, the White House push for a massive infrastructure bill was discussed on March 4 in a meeting with President Biden, Transportation Secretary Pete Buttigieg and a bipartisan group of House members led by Rep. Peter A. DeFazio (D-OR), chairman of the House Transportation Committee.  (Bloomberg, March 4)
  • Biden remarked at the start of the meeting, “We’re going to talk about infrastructure and American competitiveness and what we’re going to do to make sure that we once again lead the world across the board on infrastructure. It not only creates jobs but it makes us a helluva lot more competitive around the world.”  (White House, March 4)
  • The White House infrastructure plan is expected to emphasize climate change, but legislation has not been unveiled nor has its cost or methods to pay for the initiative. (Wall Street Journal, March 4)
  • The critical need for investing in modern and sustainable infrastructure was also the focus of a Feb. 11 White House meeting between Biden, Vice President Kamala Harris, Buttigieg and a bipartisan group of senators from the Environment and Public Works Committee. (Roundtable Weekly, Feb. 12)
  • In a December 16, 2020 letter, The Roundtable and 12 national real estate organizations provided detailed recommendationsto then President-elect Biden and Vice President-elect Harris that included infrastructure funding and modernization as engines to drive recovery and job growth from the economic fallout of the COVID-19 pandemic.

The Roundtable is part of Build by the 4th coalition led by U.S. Chamber of Commerce, which encourages the Biden Administration and the new Congress to pass a comprehensive infrastructure deal by Independence Day 2021. 

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Senate Weighs Timelines for COVID-19 Relief Bill and Impeachment Trial; President Biden Signs Climate Executive Order

Posted on by Trey Jackson

U.S. Capitol evening

Senate policymakers this week began to consider President Joe Biden’s $1.9 trillion COVID relief package proposal after Congressional leaders agreed to delay opening arguments in the impeachment trial of Donald Trump until Feb. 9. (Reuters, Jan. 25 and PBS, Jan. 26)

  • As an alternative to a trial, Sen. Tim Kaine (D-VA) yesterday said he will introduce a resolution to censure the former president, citing the 14th amendment to bar Trump from holding future office. At least 10 Senate Republicans would have to vote for censure to move the resolution forward, even though the GOP has shown little support for conviction in the impeachment proceeding. (The Hill and The Washington Post, Jan. 28)
  • With the impeachment trial date set, Senate Majority Leader Chuck Schumer (D-NY) said he is aiming to pass a pandemic aid package by mid-March, when unemployment benefits will expire. (Forbes, Jan. 25, 2021 and Roundtable Weekly, Dec. 22, 2020)
  • Schumer and House Speaker Nancy Pelosi (D-CA) also said this week that if Republicans continue to reject President Biden’s $1.9 trillion pandemic relief proposal, a Democrat-only pandemic stimulus plan will move forward next week using budget reconciliation – a process that requires a simple majority vote in the Senate, thereby avoiding a filibuster. Vice President Kamala Harris could break a tie vote in the 50-50 Senate. (The Hill, Jan. 29)
  • President Biden said Monday that he is open to negotiating a bipartisan approach to the next pandemic aid package with Congress, but stated “time is of the essence” and that “[t]he decision to use reconciliation will depend on how these negotiations go.” (Bloomberg and CNBC, Jan. 25) 
  • Sen. Rob Portman (R-OH) – a centrist Republican who recently announced he will not seek reelection in 2022 due to partisan gridlock – said the use of reconciliation “would exacerbate the partisanship around here; it would make it more difficult to find common ground.” (Wall Street Journal, Jan. 26)

Presidential Executive Order on Climate

  • In related policy news, President Biden issued an executive order on Wednesday to “tackl[e] the climate crisis at home and abroad.” (Axios, Jan. 28, New York Times, Jan. 27).  The order aims for the U.S. to achieve a “net-zero emissions” economy by 2050.
  • The climate order directs federal agencies to determine the U.S.’s carbon reduction target under the terms of the Paris climate agreement, and maximize opportunities to “create well-paying union jobs to build a modern and sustainable infrastructure.”

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