News Type: Roundtable Weekly

The Senate on July 28 voted to advance a $1 trillion infrastructure package that would allocate $550 billion in new spending toward transit, utilities and broadband. The plan, which has not been translated into final legislation yet, was the result of a breakthrough in month-long negotiations between a bipartisan group of senators and President Biden. (White House Fact Sheet, July 28 | E&E Daily, July 29 | Roundtable Weekly, June 25) 

Historic Step Forward 

• The Senate vote of 67-32 included the support of 17 Republicans and all 50 Democrats – and kick-started the process of debating and amending the measure, which could draw enough support to pass the Senate next week. (BGov, July 29)
• Real Estate Roundtable President and CEO Jeffrey DeBoer yesterday stated, “The Real Estate Roundtable strongly supports the bipartisan agreement on infrastructure reached by the White House and senators this week – and we applaud the continued hard work of policymakers to work across the aisle to create legislation that will revitalize our economy and keep us globally competitive. The trillion-dollar+ infrastructure package is a positive, historic step forward. We look forward to its enactment and the well-paying jobs it will create, the economic growth it will spur on, and how it will benefit our long-term national competitiveness and productivity.” (Read DeBoer’s full statement, July 29)
• Roundtable Chair John Fish (Chairman & CEO, Suffolk) and 11 other Roundtable members joined more than 100 business leaders in a July 26 letter to Congress that urged policymakers to pass the bipartisan infrastructure package. (The Hill, July 28)
• The letter noted, “New jobs generated by investment in the nation’s mass transit, roads, bridges, airports, broadband and other essential assets will create training and re-employment opportunities for millions of Americans who lost jobs during the pandemic. The public-private initiatives that are created will accelerate recovery from losses suffered due to COVID-19.” (Business leaders’ joint letter, July 26) 

Infrastructure Package & CRE 

• The sweeping bipartisan plan would focus federal funds on physical infrastructure over five years for roads, bridges, rail, public transit, the power grid, water and broadband. (New York Times, July 28, “The Infrastructure Plan: What’s In and What’s Out” and Committee for a Responsible Federal Budget, July 29, “What’s in the Bipartisan Infrastructure Investment and Jobs Act?)
• The bipartisan package would also incorporate a bill passed by the Senate Energy Committee on July 15 that proposes spending more than $100 billion on energy initiatives, includes measures affecting commercial real estate. (Roundtable Weekly, July 16 and Reuters, July 14) 
• The Energy Infrastructure Act, introduced by Committee Chairman Joe Manchin (D-WV) includes provisions that would create an avenue for Congressional oversight to improve the Commercial Building Energy Consumption Survey (CBECS) – the key data set collected by the federal government on the basic characteristics of US commercial buildings, and how much energy they consume. (Roundtable Weekly, July 16)

Pay-Fors & Timing 

• Miller & Chevalier reported on July 28 that the bipartisan plan’s wide-ranging infrastructure investments would be paid from a variety of sources, including: 
  • certain unused COVID relief dollars;
  • certain states returning unused federal unemployment insurance aid; 
  • sales of future spectrum auctions;
  • extending fees on GSEs; economic growth resulting from a 33 percent return on investment in long-term infrastructure projects; and 
  • information reporting requirements related to cryptocurrency.
• Senate Majority Leader Chuck Schumer (D-NY), above, would need 60 votes in the upper chamber to avoid a Republican filibuster and pass the Bipartisan Infrastructure Investment and Jobs Act. Those votes would likely come from all 50 members of his caucus and at least 10 Republicans. (PoliticoPro, July 29)
• “My goal remains to pass both the bipartisan infrastructure bill and a budget resolution during this work period. Both,” he said. “It might take some long nights. It might eat into our weekends. But we are going to get the job done, and we are on track.” Although the Senate’s recess is scheduled to start Aug. 9, Schumer has said he could keep the chamber in session longer to pass the measures. (New York Times, July 29)  

“Human” Infrastructure Package 

• The Biden administration’s separate $3.5 trillion “human infrastructure” plan to invest in child care, paid leave, education and measures to curb climate change is traveling along a parallel budget “reconciliation” path – a process that would require the vote of every Senate Democrat to pass the bill without any Republican votes. (CNBC, July 29)
• Senate Budget Committee Chairman Bernie Sanders (I-VT) on July 28 said he has the 50 votes to pass a broad budget resolution next week that would lead to consideration of the package, according to Bloomberg. Sanders added, “It is my absolute conviction that you’re not going to have a bipartisan bill unless you have a reconciliation bill of $3.5 trillion.”
• However, Sen. Kyrsten Sinema (D-AZ) – the lead Democratic negotiator on the bipartisan infrastructure bill – this week told the Arizona Republic, “I have also made clear that while I will support beginning this process, I do not support a (reconciliation) bill that costs $3.5 trillion – and in the coming months, I will work in good faith to develop this legislation with my colleagues and the administration to strengthen Arizona’s economy and help Arizona’s everyday families get ahead.” (CNN, July 28) 

In the House of Representatives, Speaker Nancy Pelosi (D-CA) has insisted she will not consider either the infrastructure bill or budget measure until the Senate passes both. (CNBC, July 29) 

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Members of a bipartisan group of senators working on a $579 billion “physical” infrastructure proposal said Thursday that final details may be announced as early as July 26, after a procedural vote in the Senate earlier this week failed to allow debate on the evolving measure. (Bloomberg, July 22)

Bipartisan Deal

• The bipartisan group initially announced their tentative, broad infrastructure agreement with President Biden on June 24. Remaining issues to resolve are finalizing how to pay for the package including measures affecting funding for transit systems. (Roundtable Weekly, June 25 and BGov, July 22)
• One of the 22 Senate negotiators, Sen. Joe Manchin (R-WV), said, “We had an agreement on 99% when we walked out yesterday afternoon. The pay-fors are pretty much lined up.” (Bloomberg, July 22)
• Another negotiator, Sen. Mitt Romney (R-UT) added, “I think we’ll get it done over the weekend, and then I hope that we get another cloture vote next week, and that will succeed.” (PolitcoPro, July 22)
• The bipartisan proposal, if eventually translated into legislation, would need at least 10 Republican votes in the 50-50 Senate to avoid a filibuster and start debate on the measure.

Reconciliation

• If the deal fails, Democrats may consider paring the “hard” infrastructure proposal with a separate, $3.5 trillion “human” infrastructure plan that addresses climate change, child care and health care. A combined package could be pushed through Congress as part of a budget “reconciliation” process that would bypass the need for Republican votes. (CNBC, July 22)
• Senate Majority Leader Chuck Schumer (D-NY) on July 21 said he may delay the chamber’s August recess to pass both infrastructure packages. (Roll Call, July 21)
• House Speaker Nancy Pelosi (D-CA) yesterday reiterated that the House will not act on the Senate’s bipartisan infrastructure plan until the upper chamber also passes a reconciliation bill.  (Transcript of July 22 press conference)

Infrastructure Investment Analysis 

• A July 21 Analytics report by Moody’s Chief Economist Mark Zandi states that the emerging $4.1 trillion package of spending on physical and social infrastructure would benefit the economy and create jobs, despite being offset with tax increases.  (Washington Post and CNN, July 21)
• The report – “Macroeconomic Consequences of the Infrastructure and Budget Reconciliation Plans” – shows that infrastructure investments would increase inflation-adjusted economic growth by 0.6 percent by 2023 and create 650,000 new jobs by mid-decade. (The Hill and CQ, July 21)

CRE & Infrastructure

• Roundtable Chair John Fish (Chairman and CEO, Suffolk), above right, on July 21 discussed infrastructure issues, the impact of the pandemic on commercial real estate and the industry’s leadership role in national policy issues with Roundtable member Willy Walker (Chairman and CEO of Walker & Dunlop), left, on the Walker Webcast. (Bisnow and Connect, July 21)
• Fish noted that economic opportunities resulting from investments in physical infrastructure are equally as important as investment in social infrastructure. Fish noted Boston’s “Big Dig” transportation infrastructure project as an example of a large-scale public investment that returns enormous benefits for the larger community.
• “Boston made an almost $19 billion investment with the federal government in the Big Dig, and we have received probably $100 billion in returns today so far,” Fish said. “If we didn’t make those investments in the Big Dig back in the 1990s, early 2000s, the city of Boston would not be growing the way that it is right now.” (Walker Webcast and Bisnow)

Fish also commented on The Roundtable’s role in Washington and the importance of CRE industry leadership in the climate change debate. He emphasized that the vast majority of US buildings were constructed in the last century — and that with 40% of US energy use attributable to owners, tenants, and other occupants of residential and commercial structures, now is the opportune time for the industry to reimagine its positive role for future generations. (See 34:45 in the Walker Webcast) 

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The House yesterday approved a five-year, $760 billon surface transportation and water bill (H.R. 3684) with climate provisions, which Democrats plan to use in infrastructure negotiations with the Senate. The INVEST in America Act passed by a vote of 221 to 201, with only two Republicans joining Democrats in support. (Washington Post, July 1 and Invest in America Act Fact Sheet)

Must-Pass Transportation Funding

• The House bill does not detail pay-fors yet, but is considered must-pass legislation, as funding for the nation’s surface transportation programs expires on Sept. 30. (Roundtable Weekly, June 11)
• Roundtable President and CEO Jeffrey DeBoer last week said, “Americans depend on safe and efficient roads, bridges, and mass transit to commute all across the country. Our nation’s buildings and the people in them depend on reliable supplies of water, power, and broadband to function, and meet the evolving demands of business and individual tenants. In turn, infrastructure and real estate are synergistic, and have a two-way relationship.” (Roundtable news release, June 25)

Different Paths

• In the Senate, a bipartisan agreement was reached last week with the White House on the outlines of a package addressing “physical” infrastructure. The agreement nearly fell apart after President Biden said the bill was directly linked to the passage of a separate, multi-trillion dollar “human” infrastructure proposal. (RRoundtable Weekly, June 25)
• The Senate proposal includes $579 billion in new spending and was initially supported by 11 Republicans, although some have since objected. Ten Republican Senators would be needed to overcome a filibuster in the 50-50 chamber. (Bloomberg, June 25 and Punchbowl News, June 30)
• The costs for all the infrastructure “asset classes” in the bipartisan framework are detailed in a recent White House memo from Brian Deese, Director of the National Economic Council, and Anita Dunn, Senior Adviser. (Deese-Dunn memo)
• The Senate infrastructure agreement has not yet been translated into legislation. Republican and Democratic Senators disagree if they should move forward with a stand-alone bill, or insist on pairing it with a massive “social” infrastructure package. As Senate talks continue, the House bill passed this week could present another path toward a final infrastructure bill, since it comes with a Sept. 30 deadline. (Politico, June 30)
• House Speaker Nancy Pelosi (D-CA) plans to reference the House bill as a base for negotiating changes to the Senate’s $973 billion bipartisan infrastructure framework in the coming weeks. (BGov, June 30)
• House Transportation and Infrastructure Chair Peter DeFazio (D-OR), the lead sponsor of H.R. 3684, said, “I’m suggesting that substantial amounts of the policy in our bill should be negotiated by the White House, the Senate and the House to be part of that bipartisan proposal.” (New York Times, July 1)

What’s Next

• Senate Minority Leader Mitch McConnell (R-KY) this week said President Biden should encourage Pelosi and Senate Majority Leader Chuck Schumer to support the bipartisan proposal without a dependent, separate bill that would move through a restrictive budget “reconciliation” process. According to McConnell’s June 28 statement, “The President cannot let congressional Democrats hold a bipartisan bill hostage over a separate and partisan process..”

• White House Press Secretary Jen Psaki commented June 30 on the evolving infrastructure proposals, stating, “It’s up to leaders in Congress to move this forward. The President looks forward to signing both pieces of legislation into law.”  (White House Press Briefing transcript)

Senate Democrats are aiming to pass bipartisan infrastructure legislation and send it to the House before the August recess, in hopes that a package could arrive on President Biden’s desk by the end of September. (Reuters, June 29)

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