Category: Policy Landscape

Congress Passes Government Funding Through November 21; President Trump Expected to Sign

Posted on by Trey Jackson

U.S. Capitol

A “Continuing Resolution” (CR) to fund the government at current levels through November 21 was approved by the Senate yesterday after House passage last week, sending the stopgap measure to President Trump for his signature. 

  • A senior White House official said President Trump will sign the CR, which avoids the threat of a government shutdown on October 1, the start of the government’s fiscal year.  The measure includes funding for programs of importance to commercial real estate, including the EB-5 Immigrant Investor Regional Center Program and National Flood Insurance Program.  (BGov, Sept. 26 and Roll Call, Sept. 23)

  • The CR gives lawmakers more time to negotiate spending levels and policy differences, since none of the 12 annual discretionary spending bills have been signed into law yet.  One of the most contentious issues in the appropriations process is funding for a wall on the southern border, which is overseen by the Department of Homeland Security.  Disagreements over wall funding led to the historic 35-day partial government shutdown in 2018–2019. (Politico, Jan. 25)

  • President Trump’s request for $5 billion for a southern border wall resulted in Democrats proposing an amendment in the Senate Appropriations Committee on Thursday to block the funds.  (Washington Post, Sept. 26)

  • Senate Appropriations Chairman Richard C. Shelby (R-AL) said, “As we close out this month, I think, we must acknowledge the progress we have made while also recognizing that we still have a long way to go in fulfilling our duty to fund the government.  Most importantly for those negotiations to end in success … my Democratic colleagues and the president will have to reach an agreement, once again, on border security.”

  • The appropriations dispute exists despite an agreement over the summer between Congress and the administration on a broad deal that allocated more than $2.7 trillion in discretionary federal spending over two years and suspended the debt ceiling until July 2021.  (Roundtable Weekly, Aug. 2)

Congress will return from a two-week recess on Oct. 15 to face the Nov. 21 funding deadline, or the prospect of another partial government shutdown.   The tight timeframe poses the possibility of more stopgap measures if differences over funding levels cannot be resolved.  Another scenario is the prospect of a full-year CR.  (CQ and Politico, Sept. 26)

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Congress Returns to Packed Agenda, Funding Deadlines

Posted on by Trey Jackson
U.S. Capitol

Congress returned this week from recess to a full legislative agenda and a September 30 government funding deadline.  (Roll Call, Sept. 10) 

  • None of the 12 annual discretionary spending bills have been signed into law yet.  Lawmakers  still must negotiate appropriations affecting contentious issues such as funding for a wall on the southern border, which is overseen by the Department of Homeland Security.  Disagreements over wall funding led to the historic 35-day partial government shutdown in 2018–2019. (Politico, Jan. 25) 
  • Of interest to real estate, funding for the EB-5 Immigrant Investor Regional Center Program and the National Flood Insurance Program (NFIP) is also set to expire September 30 – the end of the current fiscal year.  FY’20 begins October 1.  (Roundtable Weekly, Feb. 15). 
  • In order to give lawmakers more time to negotiate spending levels and policy differences, congressional leaders have endorsed a stopgap funding bill, or Continuing Resolution (CR).  The CR emerging from discussions between House and Senate appropriators is expected to run through November 22.  Both EB-5 and NFIP are expected to be included within a funding extension measure.  (Wall Street Journal, Sept. 10 and The Hill, Sept. 9)   
     
  • Several tax priorities are also vying for attention and could form the basis for an end-of-year agreement on tax legislation.  These issues include tax extenders, clean energy incentives and tax technical corrections. 
     
  • On September 4, the National Multifamily Housing Council, The Real Estate Roundtable, and other industry organizations sent a letter to Congressional tax-writers urging them to enact a technical correction related to the cost recovery period for residential rental property.  The correction would clarify that taxpayers electing out of the new limitation on business interest deductibility can depreciate their existing rental properties over 30 years, rather than 40 years.  The 30-year period applies to newly acquired or constructed residential rental properties, and should also apply to existing holdings.  (Letter on Cost Recovery Period for Residential Rental Property under Section 163(j), Sept. 4) 

Congress is scheduled to be in legislative session for three weeks in September, three weeks in October and a few weeks in November.  Both chambers aim to adjourn for the year by December 13, 2019.

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New York Overhauls Rent Regulations as Affordable Housing Shortage Attracts National Attention

Posted on by Trey Jackson

Major changes to New York City’s rent regulations passed in Albany last week have drawn attention to a nationwide resurgence of rent control laws considered by cities and states across the nation.  ( Wall Street Journal , June 14).

By keeping more New York City apartments permanently in the regulated system, the new law will diminish the number of available market-rate units, drive-up market-rate rents, and perpetuate an imbalance in affordable housing supply and demand.  
  • The law signed by Governor Andrew Cuomo on June 14 directly impacts about 40 percent of New York City’s apartment stock and expands rent stabilization to counties across the state.  The law generally freezes “stabilized” NYC apartments from ever moving to market rental rates.  (New York Times ,June 12 and June 17).  
  • By keeping more apartments permanently in the regulated system, the new law will diminish the number of available market-rate units, drive-up market-rate rents, and perpetuate an imbalance in affordable housing supply and demand.  Affluent Manhattan residents in stabilized apartments who enjoy a rental windfall will stay in place, while lower-income residents in outer boroughs will likely bear higher rent burdens.  (Wall Street Journal, June 12) 
  • The New York law also dis-incentivizes owners from modernizing aging housing with new roofs, boilers, security systems, and other improvements.  By capping annual rent increases that an owner can charge for major building-wide capital investments, one critic has warned that the law could lead to a “shabbification of rental housing.”  (Citylab, June 13). 
  • Real Estate Board of New York (REBNY) President John Banks stated, “The harmful impact of this legislation will be profound for New York City’s economic future … This legislation will keep rent lower for some, but also significantly diminish housing quality and lead to less tax revenue to pay for vital government services.”  (REBNY statement, June 18) 

Affordable Housing: A National Issue

New York’s action is part of a growing trend of jurisdictions purporting to address skyrocketing housing costs though rent regulations.  Meanwhile, candidates on the 2020 campaign trail are offering plans to address the nation’s “affordable housing crisis.”  ( NPR,  June 18)  

    An  interactive national map provided by the National Multifamily Housing Council (NMHC) details the movement of state capitals eying rent control measures.   
    • An interactive national map provided by the National Multifamily Housing Council (NMHC) details the movement of state capitals eying rent control measures.  
    • A real estate industry coalition recently opposed a rent control measure under consideration in California.  In a letter to Sacramento lawmakers, the coalition explained that increasing housing supplies with new construction built by public-private partnerships will “help bring the price point down,” and that it is “more effective to tie assistance to a renter rather than a rental unit.” (NMHC, June 17) 
    • Proposals in Congress that aim to expand and incentivize the construction of affordable housing would be more effective in addressing the nation’s housing challenges (compared to government-mandated rental price-fixing).  Recently proposed measures would expand the low-income housing tax credit program (e.g., S. 1703,  H.R. 3077), and create a similar tax credit geared to moderate-income, workforce housing (S. 3365, 115th Cong.). 
    • Housing and Urban Development Secretary Ben Carson has offered a strategy to boost affordable housing by encouraging localities to ease their own building restrictions. Carson’s proposal has gained support of House Financial Services Committee Chair Maxine Waters (D-CA).  It would provide federal monetary incentives for local governments to ease land-use and zoning regulatory barriers that can feed into “NIMBY-opposition” against affordable housing and drive-up development and construction costs. (Politico, June 14) 

    “Although they are well-intended, we know from decades of experience that rent control regulations distort markets, create shortages, and depress business investments.  They often harm the communities they seek to help,” said Jeffrey D. DeBoer, President and CEO of The Real Estate Roundtable. “Policy makers should avoid rent control measures and rather seek solutions that grow America’s residential stock, to enable our communities to provide safe and decent housing for low-income families and the teachers and first-responders in our workforce.”

    Senate Finance Committee Announces Tax “Extenders” Task Forces; House Ways & Means Committee Examines Climate Change

    Posted on by Trey Jackson

    U.S. Senate Finance Committee Chairman Chuck Grassley (R-IA) and Ranking Member Ron Wyden (D-OR) yesterday announced the formation of several bipartisan taskforces to examine and help permanently resolve the fate of 42 expired and expiring tax provisions.  (Senate Finance Committee Announcement, May 16)

     

    U.S. Senate Finance Committee Chairman Chuck Grassley (R-IA), above, and Ranking Member Ron Wyden (D-OR) yesterday announced the formation of several bipartisan taskforces to examine and help permanently resolve the fate of 42 expired and expiring tax provisions.  (Senate Finance Committee Announcement and Video of Grassley statement, May 16)

    		 
    • Among the expired provisions are a deduction for energy efficient commercial buildings (sec. 179D), the new markets tax credit, and the exclusion of income for debt forgiveness on a principal home. The committee members assigned to each task force are detailed in a committee news release.  
    • In conjunction with the announcement, the Joint Committee on Taxation (JCT) issued a report yesterday on the tax provisions that expired in 2017 and 2018, as well as those set to expire this year.  The taskforces are expected to complete their work by the end of June.  (Grassley statement, May 16)
    • “We’ll ask the taskforces to work with stakeholders, other Senate offices, and interested parties to consider the original purpose of the policy and whether the need for the provision continues today,” said Chairman Grassley.  “If so, we’ll ask the taskforce to identify possible solutions that would provide long-term certainty in these areas.” (Video of Grassley statement, May 16)
    • Legislation supported by The Roundtable is currently pending to fix a technical error from the Tax Cut and Jobs Act regarding depreciation of interior building improvements, known as Qualified Improvement Property (“QIP”).  (Roundtable Weekly,  March 15 and QIP Policy Comment Letter, April 26) 
    • In the House, Ways and Means Committee Chairman Richard Neal (D-MA) has suggesting tax extenders should be part of a more comprehensive tax package.  (CQ, March 16)
    • This week, a Ways and Means hearing focused on “The Economic and Health Consequences of Climate Change.”  In his opening statement, Chairman Neal said, “Climate change is real. The business community understands this, and savvy companies are planning accordingly.”  He added, “… it’s time for Congress to get on board. We cannot rely solely on the business community to solve this problem for us. The federal government has a significant role to play in creating real pathways for meaningful, long-term economic growth that creates solutions to reduce carbon emissions.”  (Chairman Neal’s Opening Statement, May 15)
    • The Real Estate Roundtable and a broad coalition of real estate and environmental organizations last week urged Senate and House tax writers to establish an accelerated depreciation schedule for a new category of Energy Efficient Qualified Improvement Property installed in buildings – or “E-QUIP.”  (Coalition E-QUIP Letter, May 8)
    • Roundtable President and CEO Jeffrey DeBoer said, “The purpose of establishing a new E-QUIP category in the tax code is to stimulate productive, capital investment on a national level that modernizes our nation’s building infrastructure while helping to lower greenhouse gas emissions.  As Congress considers potential tax, infrastructure, and climate legislation, the E-QUIP proposal should have bipartisan appeal on a range of important policies prioritized by Republicans and Democrats.”  (Roundtable Weekly, May 10) 

    E-QUIP and tax extenders will be among several tax policy issues discussed during The Roundtable’s June 11-12 Annual Meeting in Washington, DC.

    House Passes “Tax Reform 2.0” Legislation; President Trump Signs Government Funding Bill

    Posted on by Trey Jackson

    he House today passed “Tax Reform 2.0” legislation (H.R. 6760) that would make permanent the 2017 tax cuts for individuals and certain pass-through businesses – currently set to expire at the end of 2025. 

    The   House today passed “Tax Reform 2.0” legislation (H.R. 6760) that would make permanent the 2017 tax cuts for individuals and certain pass-through businesses – currently set to expire at the end of 2025.

    • As GOP policymakers seek to highlight last year’s Tax Cuts and Jobs Act (P.L. 115-97) as their signature achievement before the November mid-term elections, today’s bill passed on a mostly partisan vote of 220-191. Among the provisions in H.R. 6760:
      • Individual marginal rates of 10%, 12%, 22%, 24%, 32%, 35%, and 37%;
      • Capping the deduction for state and local taxes (SALT) at $10,000; and
      • a 20% tax deduction for the business income of certain pass-through businesses. 
    • “By making the new code permanent for families and small businesses, the Protecting Family and Small Business Tax Cuts Act will keep America’s economy booming,” House Ways and Means Committee Chairman Kevin Brady (R-TX) said on the House floor. 
    • The House on Thursday passed two other tax bills (H.R. 6756 and H.R. 6757) that would expand incentives for retirement savings and startup businesses. All three bills now go to the Senate, where chances to pass H.R. 6760 are unlikely without support from Democrats. 
    • Also today, President Trump signed a spending bill that funds most government programs through Sept. 30, 2019 while extending others via a “Continuing Resolution” until Dec. 7.  Funding for those programs was scheduled to expire on Sunday at midnight. (White House Statement, Sept. 28) 
    • Among the programs extended for another year is the EB-5 immigration investment program – the 14th extension since Sept. 2015.

    As the confirmation process for President Donald Trump’s Supreme Court nominee Brett Kavanaugh dominated the Senate this week, the House adjourned today until after the midterm elections. (Politico, Sept. 28).

    Midterm Elections Produce Divided Congress; Lame Duck Session Faces Government Funding Deadline

    Posted on by Trey Jackson

    Lawmakers return to Washington next week for a Lame Duck session after midterm elections that secured Democratic control of the House in January.  Policymakers will immediately face a Dec. 7 deadline to fund parts of the government that may collide with President Trump’s goal to fund a border wall on the Mexican border – a possible impasse that could threaten a partial government shutdown.

    Lawmakers return to Washington next week for a Lame Duck session after midterm elections that secured Democratic control of the House in January.

    • Senate Majority Leader Mitch McConnell (R-KY) this week cautioned against a possible shutdown.  “75 percent of the government got funded before the end of September and we all know we need to work together here at the end to finish that up.  So we’re going to do the best we can to achieve the president’s priorities. And hopefully we won’t be headed down that path,” McConnell said. (Politico, Nov. 7) 
    • Several immigration programs (including the EB-5 investment program) are scheduled to expire on Dec. 7 unless Congress pursues its typical course and extends them as part of the next government funding measure.  However, Congress also faces a Nov. 30 funding expiration for the National Flood Insurance Program. 
    • Other major legislation is not expected to pass during the Lame Duck, although President Trump and Democrats have recently expressed interest in working together on an infrastructure package (CNBC, Nov. 7).   Congress may also consider a tax bill with technical corrections and an extension for expiring tax breaks that could carry over to the new year.
    • Beyond the Lame Duck, it is expected that both parties in the 116th Congress will introduce legislation to maneuver for public favor affecting the 2020 presidential campaign.  (AP, Nov. 7)  

      Roundtable President and CEO Jeffrey DeBoer said, “We believe we will continue to be successful in Washington – regardless of which party controls the power levers – by maintaining our focus on smart research; strong political relationships; and our long-standing positive bipartisan approach to advocacy that emphasizes commercial real estate’s contributions to job creation, communities, retirement savings and overall economic strength.”

    • A new Congress will also bring Democratic control of House committees and a substantial new policy dynamic.  Extensive hearings on last year’s tax overhaul are expected from the new chair of the House Ways and Means Committee Richard Neal (D-MA), the long-standing leader of the House Real Estate Caucus. 
    • Nancy Pelosi (D-CA), who served as Speaker of the House from 2006-2011 and is favored to re-assume that role, stated her caucus plans to revive a “Select Committee on Energy Independence and Global Warming” that will lend heightened focus on risks and impacts from climate change and extreme weather events. (The Hill, Nov. 8.) 
    • It is also possible that GSE reform and a focus on housing issues could gain traction in next year’s House Financial Services Committee, which will be led by incoming Chair Maxine Waters (D-CA).  Her committee will also consider reauthorization of the federal terrorism insurance program. 
    • GlobeSt reported this week there “is one piece of must-pass legislation for the CRE industry that will require bipartisan support – the Terrorism Risk Insurance Act, which is set to expire at the end of 2020.  This law impacts most business properties and is a key to transactions and refinancing. Without a doubt it has to be extended.”  (What A Divided Government Means For CRE, Nov. 7) 

    The new dynamic of a divided Congress will refocus the commercial real estate industry on its policy agenda. Roundtable President and CEO Jeffrey DeBoer said, “The Real Estate Roundtable will maintain its steady course. We believe we will continue to be successful in Washington – regardless of which party controls the power levers – by maintaining our focus on smart research; strong political relationships; and our long-standing positive bipartisan approach to advocacy that emphasizes commercial real estate’s contributions to job creation, communities, retirement savings and overall economic strength.”

    The Roundtable will hold its State of the Industry Meeting on January 29, 2019 in Washington, DC.

    Congress Returns for Lame Duck Session; Government Funding Deadline Threatens Partial Shutdown

    Posted on by Trey Jackson

    Lawmakers returned to Washington this week for their post-election “lame duck” session, facing a Dec. 7 government funding deadline that threatens a partial government shutdown.

    Lawmakers returned to Washington this week for their post-election “lame duck” session, facing a Dec. 7 government funding deadline that threatens a partial government shutdown.

    • Seven FY2019 spending bills await congressional action by next Friday to fund the departments of Agriculture, Commerce, Justice, Homeland Security, Interior, State, Transportation and Housing and Urban Development, and several smaller agencies.  If Congress and President Trump do not reach agreement on an appropriations package for the fiscal year, these departments and agencies may be subject to a partial government shutdown or another short-term extension. Several immigration programs, including the EB-5 investment program, also face expiration on Dec. 7.   (USA Today, Nov. 28)  
    • A key issue in the funding negotiations is construction of a wall along the U.S.-Mexican border.  President Trump said he would “totally be willing” to shut down the federal government if $5 billion is not approved for the wall by Congress during a Nov. 28 Oval Office interview with Politico.  Senate Minority Leader Chuck Schumer (D-NY) and other Democratic leaders have pledged $1.6 billion for border security.  (The Hill, Nov. 29)
    • The lame-duck session could be the final opportunity for Republicans to pass significant funding for the wall, as Democrats will reclaim the House majority in January.   
    • A government program scheduled to expire today – the National Flood Insurance Program (NFIP) – was extended yesterday by Congress for the seventh time in 12 months.  The NFIP extension will also expire Dec. 7 unless Congress attaches a longer-term flood insurance extension to a spending bill, or passes another continuing resolution. (BGov, Nov. 30) 
    • The Real Estate Roundtable and 14 other industry groups urged Congress in a June 12, 2017 comment letterto reauthorize and reform the NFIP to help protect the nation’s commercial and multifamily business-owners, their properties, residents, and the jobs they create from the financial perils of flooding.  (Roundtable Weekly, Sept. 14, 2018)

      The Roundtable is also part of a coalition advocating for the reauthorization of the Brand USA program – a public-private partnership that markets the United States as a travel destination to international travelers.

    • Legislation is needed to ensure that international visitor fees funding the program will not be diverted to the Treasury Department, as currently scheduled. The fee assessed on international travelers coming to the U.S. is matched 1:1 by funds from the private sector travel industry.  The letter states, “Without this funding, private sector partners of Brand USA are limited, and in some cases deterred, from marketing to highly valued international travelers.”  (VisitU.S. Coalition letter, Nov. 30)  
    • Brand USA is estimated to have generated international visitor spending since FY2013 that produced $486 million in federal tax revenue, and another $526 million in state and local tax revenue. (Return On Investment Analysis, Oxford Economics)

    Lawmakers are scheduled to stay in session until Dec. 14 to close out the 115th Congress.

    Roundtable’s Trump Signs Measure Funding Government Until Dec. 21; Border Wall Issue Threatens Partial Government Shutdown Issues

    Posted on by Trey Jackson

    President Trump today signed a spending measure to fund the government until Dec. 21, buying time for policymakers to negotiate over the key issue of funding a border wall on the Mexican border.  (RollCall, Dec. 7)

    The  115th Congress is now scheduled to end on Dec. 21.

    • Today was the original deadline for funding the government’s FY2019 budget (through Sept. 30, 2019).  The short-term Continuing Resolution passed by Congress this week accommodated observances in honor of former President George H. W. Bush.  The extension includes funding for the National Flood Insurance and EB-5 investment programs until Dec. 21.
    • Policymakers will now focus on an appropriations package affecting several government agencies, including the Department of Homeland Security.  If an agreement on funding is not reached for FY2019, they may pass another short-term extension or face a partial shutdown.
    • A key issue in the funding negotiations is construction of a wall along the U.S.-Mexican border.  The president is scheduled to meet with Senate Minority Leader Chuck Schumer (D-NY) and House Minority Leader Nancy Pelosi (D-CA) on Tuesday about his initial request for at least $5 billion to build the wall.  Trump told a law enforcement conference today, “Congress must fully fund border security in the year-end funding bill.”  (NBC News and Fox News, Dec. 7)
    • Schumer said yesterday that a bipartisan Senate plan for $1.6 billion in border security funding does not include money for a wall, adding that the money “can only be used for fencing” and technology security features.  Pelosi, who is likely to become the next speaker of the House, yesterday referred to the construction of a wall as “immoral, ineffective, and expensive.” (AP, Dec. 6)
    • Sen. Lindsey Graham (R-S.C.) met with Trump this morning, tweeting that the president “indicated he supports” adding a bipartisan criminal justice reform bill to the year-end spending measure – potentially adding another complicating factor to negotiations. (CNBC)

    Separately, a House GOP tax bill introduced last week, which includes tax “extenders” and technical corrections of importance to commercial real estate, faces an uncertain future in the remaining weeks of the lame duck session.  Congressional tax-writers and leaders do not appear to be any closer to an agreement that would include certain tax provisions in the end-of-year spending bill, such as a technical correction related to the depreciation schedule for nonresidential, interior real estate improvements.  (Roundtable Weekly, Nov. 30 and BGov, Dec. 7)

    The 115th Congress is scheduled to end on Dec. 21.

    Border Wall Disagreement Looms Over Possible Government Shutdown; House Republicans Face Uphill Effort to Add Tax Provisions to Year-End Funding Bill

    Posted on by Trey Jackson

    The federal government will partially shutdown unless Washington policymakers can pass a year-end funding bill by Dec. 21.  Negotiations over a spending measure have deadlocked over President Trump’s request of at least $5 billion for construction of a wall on the Mexican border versus Democrats’ offer of approximately $1.3 billion for border security.  (The Hill, Dec. 13)

    A meeting between President Trump and Democratic leaders this week resulted in sharp disagreements over funding for a border wall. (Wall Street Journal, Dec. 11)

    • A meeting on Tuesday between President Trump and Democratic leaders resulted in sharp disagreements over the wall that played out before the media.  “I am proud to shut down the government for border security,” Mr. Trump told Senate Minority Leader Chuck Schumer (D-NY) and House Minority Leader Nancy Pelosi (D-CA) in the Oval Office. “I will take the mantle. I will be the one to shut it down,” Trump said. (Wall Street Journal, Dec. 11)
    • Both the House and Senate left Washington today with no votes on a funding bill. The Senate returns Monday and the House on Dec. 19, leaving little time to reach a deal.  A possible partial government shutdown of seven agencies, including the Department of Homeland Security (DHS), would furlough hundreds of thousands of workers and cost taxpayers millions. (Politico, Dec. 13)
    • A shutdown would temporarily halt DHS operations of the National Flood Insurance and EB-5 investment programs.
    • If approximately 25% of the government shuts down, a decision on funding could be pushed until Jan. 3, when Democrats assume the majority in the House. Minority Leader Nancy Pelosi (D-CA) is likely to be elected House Speaker, push for a stopgap Continuing Resolution and re-open the government. The Senate would likely pass such a measure. 

    Prospects for Revised Tax Bill in Doubt; Roundtable, Stakeholders Push for Technical Correction to Depreciation Rules  

    • A must-pass spending package could be the last opportunity in 2018 for lawmakers to pass other legislation, such as a revised package of tax provisions introduced Monday by House Ways and Means Chairman Kevin Brady (R-TX).  The new measure does not include extensions of temporary tax breaks, which were part of the initial legislation.  (Wall Street Journal, Dec. 11 and Roundtable Weekly, Nov. 30  /  Reference: 253-page text of the revised tax bill)  

      The  Roundtable on Dec. 10, 2018 joined more than 260 stakeholders in a letter to congressional leadership urging a correction of the qualified improvement property (QIP) provision.

    • Specific provisions affecting real estate in the revised legislation include technical corrections to fix errors in last year’s Tax Cuts and Jobs Act. The bill would: 
      • shorten the cost recovery period for qualified improvement property (QIP)—a new category of depreciable property that covers upgrades and improvements to the interior of nonresidential buildings, and
      • clarify that the new 20 percent deduction for pass-through business income extends to REIT dividends received by mutual fund shareholders
    • The Roundtable on Monday joined more than 260 stakeholders in a letter to congressional leadership urging a correction of the QIP provision.  A drafting error in the 2017 tax overhaul requires taxpayers to depreciate building improvements over 39 years, instead of one year as contemplated under the Act.  This large difference in the after-tax cost of making improvements is causing a delay in store, restaurant and leasehold remodeling projects, as well as causing retailers to decline opportunities to purchase or lease new store locations that would require substantial improvements. (Comment Letter, Dec. 10 and Marketplace, Dec.  12) 
    • Key Senators, such as Finance Committee Ranking Member Ron Wyden (D-OR), suggested the revised House bill was unlikely to be included in a final spending agreement, “To me it is really sort of the equivalent of putting up the white flag of surrender on the idea that you’re going to have a bipartisan tax policy.”  (Washington Examiner, Dec. 10)

    If Congress does not pass tax legislation by year-end, the incoming Chairman of the House Ways and Means Committee stated that tax extenders will be a priority in the next Congress.  Ranking minority member Richard Neal (D-MA) referred to retroactive renewal of more than 20 extenders when he told Tax Notes on Dec. 12, “We’ll have to wait and see [how many are considered], but we certainly intend to move on them fast.”

    Washington Prepares for Partial Federal Government Shutdown

    Posted on by Trey Jackson

    The federal government will partially shutdown unless Washington policymakers can pass a year-end funding bill by midnight tonight.  Negotiations over a spending measure have deadlocked over President Trump’s request of at least $5 billion for construction of a wall on the Mexican border.  (The Hill, Dec. 21)

    Negotiations over a spending measure have deadlocked over President Trump’s request of at least $5 billion for construction of a wall on the Mexican border.  (The Hill, Dec. 21)

    • The Senate passed a seven-week stopgap bill on Wednesday, which President Trump said he would not sign, due to the fact there was no funding for a wall on the southern border. On Thursday, the Republican controlled House passed its own version of a stopgap measure, which would add $5.7 billion for border security and $7.8 billion for disaster relief. (The Hill, Dec. 21)  The Senate is expected to reject the House-passed measure in votes today – leaving the federal government on the precipice of its third shutdown in two years.
    • A December 10 meeting between President Trump and Democratic leaders resulted in sharp disagreements over the wall that played out before the media.  “I am proud to shut down the government for border security,” Mr. Trump told Senate Minority Leader Chuck Schumer (D-NY) and House Minority Leader Nancy Pelosi (D-CA) in the Oval Office. “I will take the mantle. I will be the one to shut it down,” Trump said. (Wall Street Journal, Dec. 11)
    • A possible partial government shutdown of seven agencies, including the Department of Homeland Security (DHS), would furlough hundreds of thousands of workers and cost taxpayers millions. 
    • A shutdown would temporarily halt DHS operations of the National Flood Insurance and EB-5 investment programs.

      The federal government will partially shutdown unless Washington policymakers can pass a year-end funding bill by midnight tonight. (The Hill , Dec. 21) 

    • If approximately 25% of the government shuts down tonight at midnight, a decision on funding could be pushed until the new Congress is sworn in on January 3 and Democrats assume the majority in the House. Minority Leader Nancy Pelosi (D-CA) is likely to be elected House Speaker, push for a stopgap Continuing Resolution, and seek to re-open the government at that time if it remains closed over the holidays. 
    • In other policy news, the House voted 220-183 to advance legislation that would extend tax breaks for biodiesel and correct errors in the TCJA of 2017, including a provision that unintentionally lengthened the cost recovery period for improvements to the interior of nonresidential real estate.  Both the House and Senate could take-up the legislation again after the new Congress convenes in January.  (Bloomberg, Dec. 20)

    In addition, after passing the House and Senate with rare bipartisan support earlier in the week, President Trump signed the First Step Act into law this afternoon. The new criminal justice reform legislation gives judges more leeway at sentencing for federal crimes, increases vocational and rehabilitation opportunities for incarcerated individuals to re-enter society, and expands early release programs.  (New York Times, Dec. 18.)