News Type: Roundtable Weekly

Real Estate Coalition Raises Concerns About White House Directive for Federal Agencies to Strengthen Tenant Protections

Posted on by Trey Jackson

A coalition of 12 national real estate organizations raised concerns this week about the Biden administration’s “Blueprint for a Renters Bill of Rights,” which directs federal agencies to strengthen tenant protections. (White House Fact Sheet and Coalition statement, Jan. 25 and GlobeSt, Jan. 26)

Industry Response

  • The White House on Wednesday issued the “Blueprint” that includes a set of principles to encourage voluntary private sector actions that increase affordable rental units—and drive action by the federal government, state and local partners on tenant rights enforcement. The administration will also launch an effort in the spring to get local governments and housing providers involved in a “Resident-Centered Housing Challenge.” (White House Blueprint for a Renters Bill of Rights and The Washington Post, Jan. 25)
  • The real estate coalition, which includes the National Multifamily Housing Council (NMHC), expressed disappointment that the White House announcement was “solely focused on renter protections, creating potentially duplicative and onerous federal regulations that interfere with state and local laws meant to govern the housing provider and resident relationship.” (Coalition statement, Jan. 25)
  • NMCH also issued a statement that acknowledged the White House action did not include the threat of a national rent control policy—and urged the administration to prioritize implementation of its Housing Supply Action Plan issued last May. “The best renter protection is an abundant supply of housing,” NMHC stated.

Affordable Housing Solutions

Brick townhouse on Sam Cooper Blvd near Overtone Park in Midtown district of Memphis, Tennessee
  • The administration’s Housing Supply Action Plan includes zoning incentives and government financing to address an estimated shortfall of 7 million units for low-income renters nationwide. It aims to create hundreds of thousands of affordable housing units in the next three years, with the goal of closing the nation’s housing supply shortfall in five years. (Roundtable Weekly, May 20, 2022 | PoliticoPro, May 16, 2022 | National Low Income Housing Coalition, April 2022)
  • On the legislative front, congressional committees showed support last year for the Affordable Housing Credit Improvement Act (S. 1136). The bill (detailed summary here) has not been reintroduced yet in the 118th Congress. The measure would expand the pool of tax credits allocated to states for new affordable housing, make it easier to combine the Low Income Housing Tax Credit (LIHTC) with other sources of capital like private activity bonds, and facilitate LIHTC rehab projects. (National Multi-Housing News, Jan. 16)
  • Real Estate Roundtable President and CEO Jeffrey DeBoer said, “Overly restrictive land-use and zoning policies, construction cost increases, and labor shortages are deepening our housing challenges, which now extend across the entire country. Government at all levels needs to be part of the solution, not part of the problem. The Affordable Housing Credit Improvement Act would be an important step forward.” (Roundtable Weekly, July 22, 2022)

The Roundtable’s Real Estate Capital Policy Advisory Committee (RECPAC) has formed an Affordable Housing Working Group, which is working with the Research Committee to develop proposals on expanding the nation’s housing infrastructure.

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Treasury Issues Alert on Potential Russian Attempts to Evade Sanctions Through U.S. CRE Investments

Posted on by Trey Jackson

The Treasury Department’s Financial Crimes Enforcement Network (FinCEN) warned financial institutions this week about how Russian elites and their proxies may attempt to evade sanctions by exploiting vulnerabilities in the U.S. commercial real estate market. (FinCEN Alert | Bloomberg and Wall Street Journal, Jan. 25) 

Russian Exploitation 

  • Treasury has imposed wide-ranging sanctions on certain Russian elites, their proxies, and others who have provided support for Russia’s brutal war against Ukraine. (Treasury’s Sanctions List Updates)
     
  • FinCEN Acting Director Himamauli Das said, “Today we are identifying red flags and typologies in commercial real estate transactions that financial institutions can use to remain vigilant in monitoring, detecting, and reporting suspicious activity that may be indicative of sanctions evasion by sanctioned Russia elites, oligarchs and their proxies.” (Treasury news release, Jan. 25)
     
  • FinCEN’s 11-page alert warns that sanctioned Russian elites and their proxies may pose as CRE investors seeking to evade sanctions by using shell companies, trusts, and pooled investment vehicles, including offshore funds, in order to avoid customer due diligence obligations and beneficial ownership protocols established by financial institutions.
  • The alert also reminds financial institutions involved in loan syndication—including banks, life insurers, and other types of companies regulated by the Bank Secrecy Act—that Section 314(b) of the USA PATRIOT Act provides a safe harbor that offers protections from liability for financial institutions who share information with one another on suspected money laundering or terrorist activities.
     
  • Questions or comments regarding the alert should be sent to the FinCEN Regulatory Support Section at frc@fincen.gov. 

The Treasury Department issued a final rule last Sept. that will require millions of companies to report information about their “beneficial owners”—persons who own at least 25% of a company or exert significant authority over it—to FinCEN. (Roundtable Weekly, Sept. 30, 2022 | Final Treasury Rule | Fact Sheet | Wall Street Journal and Bloomberg Law, Sept. 29) 

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Return-To-Office Policies Present National Economic Challenges

Posted on by Trey Jackson

The ongoing negative economic impact of remote work was featured in the Wall Street Journal this week—supported by a private sector study showing more uncertainty lay ahead as office markets adjust to post-pandemic hybrid arrangements for employees. (WSJ, Jan. 24 and CommercialEdge, Jan. 19)

Threats to Local Tax Bases

  • Real Estate Roundtable Chair John Fish and President & CEO Jeff DeBoer wrote to President Biden last month about the consequences of federal agencies’ promotion of permanent remote work—and how these actions are harming cities, local tax bases, and small businesses. (Roundtable letter, Dec. 12, 2022)
  • The Roundtable letter also expressed support for legislation that could help facilitate “the increased conversion of underutilized office and other commercial real estate to much-needed housing.”
  • The WSJ article this week cited The Roundtable’s letter as well as District of Columbia Mayor Muriel Bowser’s  recent calls for President Biden to get more federal workers back to the workplace—and convert underutilized commercial real estate spaces into affordable housing. (Roundtable Weekly, Jan. 6 and ABC News, Jan. 2)
  • City officials in New York, Washington, Chicago, Houston, San Francisco, and Boston have also encouraged city workers to return to their downtown offices. (WSJ, Jan. 24)

Uncertainty Ahead

  • Yardi’s CommercialEdge issued its National Office Report this month showing that the U.S. office market closed 2022 with a consistent rise in vacancies & declining sales. The national analysis shows that some firms have become more forceful in bringing workers back into the office, while many have fully committed to hybrid and remote work policies. The report also notes that tenants will likely embrace smaller office footprints in premium locations.
  • CommercialEdge stated, “With offices vacant and housing in short supply across the county, converting offices seems like a logical solution.” Yet without tax incentives and other financial resources from state and local governments, many office conversion projects may not be a priority in a high-interest-rate environment, according to the report.
  • A VTS Office Demand Index (VODI) report shows that, while there is momentum in return-to-office trends, it “seems unlikely” that most employers will revert to pre-pandemic physical workplace arrangements. (GlobeSt, Jan. 26)
  • The real estate industry’s perspective on the major repercussions of remote work, including its threat to municipal tax bases throughout the country, were also the focus of recent articles in GlobeSt on Jan. 26 and Jan. 23.

Return-to-office policies by the federal government and cities throughout the nation—and solutions to ease hybrid work’s damaging consequences—will continue to be a focus of The Roundtable’s policy agenda in 2023.

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Roundtable Members and Leading Policymakers Focus on National Issues Affecting CRE in 118th Congress

Posted on by Trey Jackson

The Real Estate Roundtable’s 2023 State of the Industry (SOI) Meeting this week included policy discussions with national lawmakers on issues affecting commercial real estate—including the debt ceiling, affordable housing, tax policy, climate regulations, market conditions, and evolving security threats. A special Roundtable joint committee meeting also analyzed the opportunities presented by the Inflation Reduction Act (IRA) and the ways CRE companies are navigating the law’s clean energy tax incentives. 

Speakers & Policy Issues 

Roundtable Chair John Fish (Chairman and CEO, SUFFOLK), right,and Roundtable President and CEO Jeffrey DeBoer, left, launched the meeting, which included the following speakers:

  • House Democratic Leader Hakeem Jeffries (D-NY)
  • Miami Mayor Francis Suarez (R)
  • Sen. Robert Menendez (D-NJ)
  • Sen. Katie Britt (R-AL)
  • Rep. French Hill (R-AR)
  • Former Rep. and Ways and Means Committee Chairman Kevin Brady (R-TX) and former Rep. Stephanie Murphy (D-FL) 

Roundtable Policy Advisory Committees 

  • The Roundtable’s policy advisory committees also met on Jan. 24-25 to analyze policy issues with industry experts, policymakers, and their staff, including:

Special Joint SPAC-TPAC Session 

  • The Roundtable’s Tax and Sustainability Policy Advisory Committees (TPAC and SPAC) jointly met to discuss the practical aspects of employing the IRA’s new clean energy tax credits and deductions, and how the incentives can help finance improvements needed to meet evolving regulatory requirements and investor expectations. [Photo: panel moderators TPAC Vice Chair Catherine Perrenoud (Tax Director, Johnson Management LLC), left, next to Roundtable Board Member and SPAC Chair Anthony Malkin (Chairman and CEO, Empire State Realty Trust)]

Research and Real Estate Capital Policy Advisory Committees (RECPAC) 

  • Rep. Andy Barr (R-KY), above, shared his insights on capital and credit issues as chairman of the House Financial Services Subcommittee on Financial Institutions and Monetary Policy. Panels on real estate capital markets and debt markets also engaged Roundtable members in wide-ranging discussions on current economic conditions.

    Tax Policy Advisory Committee (TPAC) 

  • Speakers at the TPAC meeting included senior House Ways and Means Committee member Darin LaHood (R-IL), above, a bipartisan panel of senior staff from the congressional tax-writing committees, and the Treasury Department’s attorney advisor for partnership and pass-through tax issues. The policymakers focused on tax and economic policy priorities for the year ahead.

    Sustainability Policy Advisory Committee (SPAC) 

  • HSTF members were briefed on the current threat environment to CRE by Linda Reid (VP, Security Operations, Walt Disney), right, and National Football League Security Chief Cathy Lanier, left, who also serves as vice-chair of CISA’s Commercial Facilities Sector Coordinating Council. Other discussions focused on cyber crime threats, fraudulent lease applications, organized criminal retail theft, and other security challenges facing commercial sector facilities. 

Next on The Roundtable’s FY2023 meeting calendar is the Spring Meeting on April 24-25. This meeting is restricted to Roundtable-level members only. 

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Fed’s Climate Risk Assessment Exercise Will Include Impact on Banks’ CRE Portfolios

Posted on by Trey Jackson

Federal ReserveThe Fed released new details this week about its “pilot climate scenario analysis”—an exploratory exercise that will require six major banks to report by July 31 on how extreme weather event scenarios would impact their operations, investments and real estate portfolios. (Reuters, Jan. 17 and Politico PowerSwitch, Jan. 19)

Risk Scenarios & CRE

  • The pilot exercise aims to learn about climate risk-management practices and challenges of the six largest U.S. banks—and enhance their ability to identify, measure, monitor, and manage climate-related financial risks.
  • The banks will analyze the impact of two risk scenarios on corporate and CRE lending exposures in their portfolios, according to the Fed’s 52-page set of instructions for Bank of America, Citigroup, Goldman Sachs Group, JPMorgan Chase, Morgan Stanley and Wells Fargo. (Fed news release, Jan. 17)
  • One scenario will include how storms, floods and other “physical risks” could affect residential and commercial real estate portfolios in northeast over a one-year horizon.
  • The second scenario will focus on “transition risks,” which refers to financial stresses caused by regulations and market forces that compel shifts to a lower carbon economy. The banks will analyze impacts over a 10-year horizon, using a scenario based on current policies—and one based on reaching net zero greenhouse gas emissions by 2050. (Yahoo News and Fed Participant Instructions, Jan. 17)

What’s Next

Federal Reserve's 2023 pilot climate scenario analysis

  • The Fed plans to publish a summary of its climate scenario analyses by the end of 2023.

  • Banks will calculate and report to the Fed on credit risk parameters such as probability of default, internal risk rating grade, and loss given default.
  • The Fed’s climate exercises are different from bank stress tests, since these climate risk scenarios are exploratory in nature and have no capital consequences. (Fed Participant Instructions, Jan. 17)
  • The central bank’s exercises come as various federal agencies are taking action on risks that climate change may pose to the economy.
  • The Securities and Exchange Commission (SEC) is expected to issue climate disclosure regulations from by April. The proposed rules would require all registered companies to disclose material financial risks related to climate change, and may include new disclosure requirements for “Scope 3” GHG emissions. The Roundtable submitted extensive comments last year on the SEC’s about the proposal. (Roundtable Weekly, June 10)
  • The Federal Insurance Office within the Treasury Department has also requested information on climate-related financial risks from the insurance sector to identify geographic areas that might lack coverage. (ClimateWire, Jan. 18 and Federal Register, August 31, 2021)

Climate-related regulatory proposals affecting CRE will be among the topics discussed during The Roundtable’s Jan. 24-25 State of the Industry Meeting in Washington, DC.

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Roundtable Comments to EPA on Building Performance Standards, Electrification

Posted on by Trey Jackson

The Real Estate Roundtable submitted comments this week encouraging the Environmental Protection Agency (EPA) to use its grant authority to foster consistent, practicable, and cost-efficient local building mandates and electrification programs. (Roundtable letter, Jan. 18)

Consistency Urged in Building Performance Standards

  • In addition to clean energy tax incentives for the private sector, the Inflation Reduction Act (IRA) devotes billions in grant money for EPA to dole-out to states and cities for greenhouse gas (GHG) reduction programs. [White House Guidebook, Dec. 15]

  • IRA grants could support localities as they develop and enforce building performance standards (BPS) that mandate owners to reduce energy use and emissions. Dozens of BPS laws have emerged in jurisdictions across the United States. (EPA Policy Brief, Jan. 19) (Roundtable Weekly, July 1, 2022)

  • The Roundtable’s Jan. 18 letter urges EPA to use its grant authority to encourage consistency in BPS mandates. A “hodge-podge” of state and local laws complicates compliance by building owners with nationwide real estate portfolios and hinders responsible investment strategies, according to The Roundtable’s letter.

  • The Roundtable’s position is that EPA should not award IRA grants unless state or local recipients ensure their BPS laws offer uniform federal tools, data, and protocols for enforcement and compliance.

  • These federal standards include EPA’s ENERGY STAR Portfolio Manager, its GHG Emissions Calculator, eGRID factors that convert electricity use to GHGs, and metrics already recommended by EPA to support BPS efforts.

Tenant Energy Data and “Practicable Electrification”

  • The Roundtable letter also advocates that utilities should be eligible for EPA grants to develop technologies that provide owners of multi-tenant buildings with “whole building” energy data. Owners need data on tenants’ energy use to meet BPS mandates and to attain the IRA’s new tax deduction for building retrofits. (Fact Sheet, updated Jan. 5.)

  • EPA can also devote grant dollars for building electrification “partnerships.” The Roundtable directed EPA to the federal government’s own BPS and NYSERDA’s Empire Building Challenge as paradigms that may accelerate voluntary and cost-effective building electrification scenarios in the private sector. (Roundtable Weekly, Dec. 9, 2022)

  • In addition, The Roundtable letter advocates that grants to help standardize corporate climate reporting should prioritize consistency in accounting for emission benefits from the purchase of Renewable Energy Certificates (RECs), and for embedded carbon in construction materials and building products purchased by real estate owners and developers.

IRA tax incentives and grant programs affecting CRE will be among the topics discussed during The Roundtable’s Sustainability Policy Advisory Committee (SPAC) Meeting on Jan. 25 in Washington, D.C., held in conjunction with Jan. 24 State of the Industry meeting.

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Remote Work Continues to Exert Economic Pressure on CRE and Cities as Mayors Explore Options

Posted on by Trey Jackson

downtown Harford CT

As the pandemic-induced rise of remote work has lowered office demand and occupancy rates, building repurposing projects are on the rise—and the nation’s mayors are exploring ways to revitalize their downtowns and damaged tax bases. (Commercial Property Executive, Jan. 16 | CBRE Research, Dec. 2 | New York magazine, Dec. 29)

Growing Threat to Municipal Tax Bases

Miami Mayor Francis Xavier Suarez

  • The president of the U.S. Conference of Mayors, Miami Mayor Francis Xavier Suarez, above, will discuss the issue of how cities are responding to the economic impact of hybrid work arrangements during The Real Estate Roundtable’s Jan. 24 business meeting in Washington.
  • Additionally, members of the Ohio Mayors Alliance, a bipartisan group of mayors representing the state’s 30 largest cities, recently issued a report that identified remote work’s economic threat to municipal revenue as among their top concerns for 2023. (Dayton Daily News, Dec. 19)
  • A Jan. 19 editorial in the Washington Post focuses on the national problem of hybrid work for downtown areas and suggests paths to recovery, including the need to speed up permitting, rezoning and easing of restrictions. “Cities must adapt to this new reality or risk a downward spiral of falling commercial property values, lower taxes on those buildings and ghost downtowns that could lead to increased crime and homelessness,” the editorial states.
  • Employees working full-paid days from home increased to about 30 percent from 5 percent before the pandemic, according to a July 21 panel on “Vulnerable Cities Facing Work from Home Realities” from the Volcker Alliance and the Penn Institute for Urban Research.

Federal Agencies & Remote Work

image from Gentex

  • Federal government employees were recently urged to return to their agency offices by Washington, D.C. Mayor Muriel Bowser, who called on President Biden to urge more federal workers back to the workplace and convert underutilized commercial real estate spaces into affordable housing. (Roundtable Weekly, Jan. 6)

  • Mayor Bowser’s views reiterated a letter sent on Dec. 12 by The Roundtable to President Joe Biden about the ongoing, harmful economic impacts of widespread remote work on cities, local tax bases, and small businesses—and how work-from-home policies by federal agencies threaten to magnify these negative economic and social consequences. (Roundtable letter | GlobeSt and CoStar, Dec. 15) 

    • Legislation introduced in the House of Representatives last week would require all federal agencies to revert to pre-pandemic office arrangements that were in effect on December 31, 2019 and give employees 30 days to return to their offices. [Roundtable Weekly, Jan. 13 and Bill text of the SHOW UP Act (H.R. 139)]
      • Any federal order to mandate government workers back to their offices could be complicated by federal worker labor unions, which support flexible hybrid arrangements. (GlobeSt, Jan. 17 and (TechTarget,  Jan. 12)

      Meanwhile, the Federal Reserve released its “Beige Book” this week, which reports on national economic conditions. The report stated, “Commercial real estate activity slowed slightly, on average, with more notable weakening in the office market.” Additionally, some bankers reported to the Fed that higher borrowing costs had begun to dampen commercial lending. (Beige Book national summary, Jan. 18 and GlobeSt, Jan. 20)

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      Roundtable Issues Call-to-Action to Members Concerning the Debt Ceiling

      Posted on by Trey Jackson

      U.S. Capitol from side with cloudsThe Real Estate Roundtable yesterday urged its membership—leaders of the nation’s top publicly held and privately owned real estate ownership, development, lending and management firms—to contact federal lawmakers to raise the nation’s debt ceiling. Treasury Secretary Janet Yellen said the U.S. reached the maximum amount it can legally borrow yesterday, and that “extraordinary measures” would allow the country to continue paying its bills, but only until early June. (NPR and Yellen letter to House Speaker Kevin McCarthy, Jan. 19)

      Call-to-Action

      • In the all-member Call-to-Action, Roundtable Chair John Fish (Chairman and CEO, SUFFOLK) and Roundtable President and CEO Jeffrey DeBoer wrote, “We now believe the risk of a default on the federal debt in 2023 is a real and meaningful concern that must not be taken lightly.” Congress has faced this statutory limit on debt 78 times in the past, yet has always acted to increase the debt limit. The note expressed their concern that Congress will face more difficulty in reaching an agreement on the debt ceiling now amid a substantial increase in political acrimony.
      • Today, DeBoer said, “Some threats to the US economy are unavoidable, others are ones of our own making and entirely unnecessary. The potential for a default on the federal debt is a needless and inexcusable risk with potentially dire consequences for U.S. real estate, workers and retirees, and the entire economy. The full faith and credit of the United States government should not be open to negotiation.”
      • Federal Reserve economists believe a prolonged stand-off could cause private interest rates to rise sharply, create liquidity pressures, and severely impair financial markets. “As default risk rises, the impacts will be felt throughout the economy, but especially in borrowing-intensive industries such as real estate,” the Call-to-Action added.
      • The Roundtable note encourages its members to contact both policymakers in Congress and the White House to raise the debt ceiling soon.

      Policymaking in the 118th Congress and significant challenges such as the debt ceiling will be discussed during The Roundtable’s State of the Industry Meeting next week in Washington, DC.

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      New House Republican Ways and Means Chairman Promises Focus on Working Families, Wages, and Investment

      Posted on by Trey Jackson

      House Ways and Means Committee Chairman Jason Smith (R-MO)

      Rep. Jason Smith (R-MO), above, won a three-candidate race this week in the 118th Congress to become the youngest-ever chairman of the powerful House Ways and Means Committee, which has jurisdiction over tax policies affecting commercial real estate. Former Ways and Means Chair Richard Neal (D-MA) now becomes the panel’s ranking member. (Roll Call and Wall Street Journal, Jan. 9)

      Chairman Smith

      • Rep. Smith is a 42-year-old lawyer who was first elected to the House in 2012. He served as the top Republican on the House Budget Committee in the previous Congress, and is a close ally of new House Speaker Kevin McCarthy (R-CA). (PoliticoPro, Jan. 9)
      • Rep. Smith was a leading supporter of Roundtable-supported legislation introduced in 2021 to make permanent the 20 percent deduction for qualified pass-through business income (Section 199A). The pass-through deduction was enacted on a temporary basis as part of the Tax Cuts and Jobs Act (TCJA) in 2017. Rep. Smith also spoke at The Roundtable’s Tax Policy Advisory Committee (TPAC) in June 2016 at the height of the tax reform debate. (Smith news release, Feb. 26, 2021 and stakeholder letter of support).
      • There are only five remaining Republican members on Ways and Means who served on the panel when the TCJA was enacted. Several TCJA provisions are scheduled to expire at the end of 2025, including Section 199A and the limitation on the deductibility of state and local taxes. (Wall Street Journal, Jan. 9)

      A New Agenda

      House Ways and Means Committee doorway

      • On Monday, Ways and Means Chairman Smith stated, “We will build on the success of the Tax Cuts and Jobs Act and examine how our policies can reward working families with a tax code that delivers better jobs, higher wages, and more investment in America.”  He added that he would aim to use the tax code to strengthen American supply chains, encourage domestic energy production, and achieve energy independence. (Smith statement, Jan. 9)
      • On Dec. 7, 2022, Rep. Smith also discussed key priorities that should be addressed by the Ways and Means Committee with Punchbowl News. (Watch video)
      • House Republicans added 10 new members to the Ways and Means Committee on Jan. 11, and six Republican women will be part of the 25-seat majority on the panel. Subcommittee chairs will not be decided for several weeks, according to Chairman Smith. (BGov, Jan. 12)

      TPAC will discuss industry tax priorities in the 118th Congress during their next meeting on Jan. 25 in conjunction with The Roundtable’s State of the Industry Meeting in Washington, DC.

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      118th Congress Faces Looming Debt Ceiling and Funding Deadlines

      Posted on by Trey Jackson

      Janet Yellen testifying

      Today, Treasury Secretary Janet Yellen notified Congress that the federal government is expected to reach its $31.4 trillion debt limit by Jan. 19, officially triggering the start of a potential standoff between House Republicans, the Democratic-controlled Senate, and the White House about how to increase the debt ceiling. (New York Times and Politico Playbook PM, Jan. 13)

      Looming Standoff

      • Yellen wrote, “Failure to meet the government’s obligations would cause irreparable harm to the U.S. economy, the livelihoods of all Americans, and global financial stability.” (Yellen letter, Jan. 13)
      • Yellen noted that while the Treasury will take steps to preserve cash, the government may only be able to pay its financial obligations until early June. Treasury’s “extraordinary measures” could include halting pension fund contributions and prematurely redeeming federal bonds. (New York Times, Jan. 13 | Committee for a Responsible Federal Budget, Oct. 28, 2022)
      • The 118th Congress will eventually need to raise the debt limit to avoid a first-ever national default and global recession. (Politico, Jan. 12)
      • Some Republicans have discussed achieving spending cuts by setting caps on discretionary government funding at FY 2022 levels. This approach would result in a cut of approximately $130 billion from current levels appropriated in the omnibus spending law enacted last month—a non-starter for Democrats. (The Hill, Jan. 10 | Roll Call,  Jan. 9 | Roundtable Weekly, Dec. 22)
      • Rep. Kevin McCarthy (R-CA) secured his new position as House Speaker on Jan. 7 by appeasing a small group of hardline Republican conservatives with concessions, which included unspecified spending cuts in exchange for raising the national debt ceiling. (Reuters, Jan. 7 and AP, Jan. 11)
      • White House officials are mounting an outreach campaign to freshman lawmakers and moderate Republicans in an attempt to attract enough votes to avoid a fiscal cliff vote over the debt ceiling. (Politico, Jan. 12)

      Government Funding Deadline

      Rep. French Hill

      • Another deadline on the financial horizon is Sept. 30, when funding for the federal fiscal year expires. A legislative standoff on spending priorities could lead policymakers to vote on a “Continuing Resolution (CR)” to fund the government programs at current levels or allow a partial government shutdown. (CQ, Dec. 29, 2022)
      • Rep. French Hill (R-AR), above, one of Speaker McCarthy’s allies who helped negotiate with the hardline GOP faction, said Republicans were seeking to design an automatic trigger for a CR in the event that the Senate does not act on House spending proposals.
      • Hill said, “It would be a way for all members of Congress to say, look, we want to fund our government, we want to rein in spending. But if the Senate doesn’t act in the right way, we’ve agreed on this CR that would be triggered by the lack of certain bills not being passed on Oct. 1.” (CQ, Jan. 9)

      Rep. Hill will address policymaking in the 118th Congress and capital markets during The Roundtable’s State of the Industry Business Meeting on Jan. 24 in Washington.

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