House Republicans’ effort to pass a massive tax and fiscal package received a jolt of momentum this week after a cliffhanger vote on the House floor Tuesday night. Passed by a narrow vote of 217-215, the House resolution would authorize $4.5 trillion in tax cuts, provided congressional committees can identify $2 trillion in spending reductions. 

House Budget Proposal

• Under the deal negotiated with fiscal conservatives in the House, if congressional committees cannot agree on $2 trillion in savings, the size of the authorized tax cut will automatically adjust downwards.  If they can agree on more than $2 trillion in savings, the size of the authorized tax cuts would adjust higher. (House Committee Report, Feb. 18)

• The House resolution also includes a controversial $4 trillion increase in the national borrowing limit, along with allocations of up to $200 billion for border security and $100 billion for defense funding. (Roll Call, Feb. 25; AP, Feb. 25))

• Shortly before the vote, The Roundtable joined a broad business coalition urging Congress to pass the House budget resolution to prevent a looming tax hike on pass-through businesses.  (Letter, Feb. 24)

Next Steps

• Both the House and Senate chambers must now align on a budget resolution before moving forward with a reconciliation bill detailing the spending cuts, tax reductions, and other measures.

• Senate Republicans have expressed reservations about the House's approach, particularly concerning the scale of spending cuts and the structure of tax extensions.

• Senate leaders have already signaled they will push for changes to ensure the 2017 tax cuts become permanent, as the House plan may lack the fiscal room to do so while also accommodating President Trump’s proposed new tax breaks.

• Senate Majority Leader John Thune emphasized the complexity of the task, stating, "It's complicated. It's hard. Nothing about this is going to be easy." (The Hill, Feb. 27)

View from The White House

• For weeks, the president has endorsed the House plan as the best way to achieve his top legislative priorities in one move, yet he has also signaled openness to the Senate's alternative or a compromise blending both approaches.

• “So the House has a bill and the Senate has a bill, and I’m looking at them both, and I’ll make decisions,” President Trump said at the White House on Tuesday. “I know the Senate’s doing very well, and the House is doing very well, but each one of them has things that I like, so we’ll see if we can come together.”

Revenue Offsets and Business SALT

• Some lawmakers have raised “Business SALT” and potential restrictions on the deductibility of state and local property taxes as a possible revenue offset for the tax bill. 

• Eliminating the business deduction for property taxes would be the equivalent of raising property tax bills on commercial real estate by roughly 40 percent. 

• “Business taxes are fundamentally different from state and local individual income taxes.  State and local business taxes are an unavoidable expense, an inescapable cost of doing business,” observed Real Estate Roundtable President and CEO Jeffrey DeBoer last week.  (Roundtable Weekly, Feb. 21)

• “Employers would owe federal tax on money that they do not have.  It would lead to insolvencies and foreclosures. It would cause self-inflicted injury to the U.S. economy, including unnecessary job losses, higher rents for families and individuals, and other inflationary pressures.  It is a recipe for a recession,” said DeBoer.

• It remains an open question whether the House and Senate will use a “current policy” budget baseline that would not count the extension of the 2017 tax cuts as a revenue loss.  A current policy baseline could significantly reduce the pressure to identify spending reductions and revenue offsets. (PoliticoPro, Feb. 28)

Averting Government Shutdown

• In addition to the tax and fiscal package, congressional leaders are under pressure to reach an agreement on current-year federal spending before a government shutdown on March 14.  A short-term stopgap bill will likely be necessary. (Axios, Feb. 27, CBS, Feb. 27)

Looking Ahead

The House budget resolution directs House committees to report their spending reductions and tax changes to the House Budget Committee no later than March 27, 2025.

The Real Estate Roundtable sent a letter on Wednesday asking Congress to oversee nearly a quarter billion dollars in federal grants, used to back city and state efforts setting onerous energy and emissions regulations on buildings.

Congressional Hearing

• The oversight and investigations arm of the U.S. House Energy and Commerce Committee held a hearing Wednesday examining Biden-era energy and environmental program funding.

• RER submitted its letter for the hearing record, urging Congress to investigate $240 million in federal DOE grants pushing states and localities to adopt regulatory Building Performance Standards (BPS) (Roundtable Weekly, Sept. 6).

• BPS laws are like “EV mandates” for buildings. These state and local mandates aim to set “net zero” emissions targets for owners and tenants to stop using heaters, boilers, stoves and other appliances that run on natural gas — and “electrify” instead.

• No U.S. agency has the authority to require private sector building electrification. The U.S. Department of Energy (DOE) should not make an “end run” around this limit on its authority by issuing grants for BPS jurisdictions to accomplish indirectly what federal regulators can’t do directly, RER explained.

• RER’s letter requested reasonable “strings attached” to the DOE grants. BPS cities and states taking federal taxpayer dollars should be required to study fully the housing affordability, grid capacity, and market impacts of their “net zero” laws.

• RER has released a comprehensive, peer-reviewed 20-point policy guide for fair BPS mandates. The letter urged Congress to investigate whether jurisdictions receiving federal grants are considering issues raised in RER’s guide to achieve balanced building emissions regulations. 

CRE Supports EPA ENERGY STAR

• RER’s letter also strengthened the real estate industry’s longstanding support for market-driven, voluntary, federal partnership programs like US-EPA’s ENERGY STAR program for commercial buildings, and US-DOE’s Better Buildings Initiative.

• These programs give building owners and developers standardized tools to monetize and forecast “massive energy savings,” help reduce strain on the power grid, and attract global capital to U.S. real estate.

• “At minimum, any state or locality that received federal grants to develop onerous BPS laws should not levy fines on buildings participating in federal partnership programs,” RER wrote.

• RER’s position advances the priorities of its Sustainability Policy Advisory Committee (SPAC), chaired by Anthony Malkin (Chairman and CEO, Empire State Realty Trust, Inc.). SPAC leads the organization’s energy advocacy agenda with a message centered on saving money, delivering profits, enhancing grid reliability, and attracting global investments to U.S. real estate.

• "Building energy, water, and waste performance drives savings, results, and delivers a healthier work environment," said Malkin recently in a discussion with Paul Donofrio, Vice Chairman of Bank of America and Co-Chair of its Responsible Growth Council. (BofA Webinar, Feb. 18) 

RER will continue to work with the Trump administration to identify opportunities for cost savings while highlighting effective government programs that create American jobs, grow the economy, and optimize America’s energy independence.  

Rising disaster risks—from California wildfires to coastal flooding—are pushing property insurance costs to crisis levels, forcing insurers to retreat from high-risk markets. At the same time, Congress is working to pass another short-term extension of the National Flood Insurance Program (NFIP) before the March 14 deadline, while acknowledging the urgent need for long-term reforms.

View from Congress

• Congress has enacted over 32 short-term extensions of the NFIP.

• Without comprehensive reforms, property owners and commercial real estate investors face increasing premiums, reduced coverage, and market uncertainty—issues that now threaten housing affordability and broader economic stability.

• Sen. John Kennedy (R-LA), co-chair of the Senate Banking Committee's NFIP working group, and House Financial Services Republicans warn that Congress must stop “kicking the can down the road” with temporary National Flood Insurance Program (NFIP) extensions. (PoliticoPro, Feb. 25)

• Lawmakers from both parties have long called for an overhaul.

• Sen. Kennedy and Sen. Kevin Cramer (R-ND), a member of the Senate Banking Securities, Insurance, and Investment Subcommittee, recently told POLITICO they are open to incorporating other disaster coverage into NFIP renewal. (Politico, Feb. 13)

• Potential changes to the program could include exploring a national catastrophe insurance program, combining flood, wildfire, and hurricane coverage into a single, federally backed plan. (Politico, Feb. 13)

• Meanwhile, Sen. Jack Reed (D-RI) noted that the Senate Banking Securities, Insurance, and Investment Subcommittee has been exploring NFIP reforms for years.

Roundtable Advocacy

• The Roundtable has been a long-standing supporter of a long-term reauthorization of the NFIP with appropriate reforms. (Roundtable Weekly, Oct. 4)

• Without a robust, long-term NFIP, property owners face escalating risks from future storms, leaving both homeowners and commercial real estate properties vulnerable.

• A long-term reform and reauthorization of the NFIP is essential for residential markets, overall natural catastrophe insurance market capacity, and the broader economy.

BPC Report: The Growing Insurance Crisis

• A new Bipartisan Policy Center (BPC) white paper, “Rising Property Insurance Costs: Opportunities for Federal Action” highlights the growing affordability and availability challenges facing homeowners, multifamily developers, and insurers as climate risks drive up property insurance costs. (BPC, Feb. 27)

• Key takeaways from the report: With insurer exits accelerating in high-risk markets, affordable housing developers are struggling—property insurance premiums for multifamily housing jumped 129% between 2018-2023, and disaster risk is intensifying—climate-driven disasters like wildfires, hurricanes, and flooding now account for 90% of property insurance claims.

• The paper also presented potential opportunities for federal policymakers to help mitigate the impact of rising property insurance costs on housing affordability.

• Some of BPC’s policy recommendations included: Expanding federal incentives for resilience upgrades, enhancing transparency and data-sharing on disaster risk, allowing insurers, developers, and lenders to make more informed decisions, and considering a federal catastrophe insurance backstop, similar to NFIP, to stabilize private insurance markets.

The Roundtable and its industry partners are actively engaging with policymakers and stakeholders to address commercial insurance gaps and rising costs while advocating for targeted policy solutions to ease the financial burden on housing providers nationwide.