Tag: Budget

Senate Passes Stopgap Funding, Giving Congress Three Weeks to Pass FY2022 Omnibus Spending Bill

Posted on by Trey Jackson

Capitol light

The Senate yesterday approved funding to keep the government open through March 11, allowing congressional negotiators an additional three weeks to reach a spending deal for fiscal year 2022. (CQ, Feb. 18) 

From CR to Omni 

  • The legislation (H.R. 6617) extends FY2021 funding levels, averting a government shutdown at midnight tonight. President Biden is expected to sign the Continuing Resolution (CR), which was passed by the House last week. (Roundtable Weekly, Feb. 11)
  • Congressional appropriators are now focused on crafting an “omnibus” bill to fund the government though the end of FY2021, which began Oct. 1 and ends Sept. 30. A deal on an omni package would consolidate 12 separate spending bills and release additional funds for infrastructure. (Tax Notes, Feb. 18)
  • The must-pass omnibus could become a vehicle for additional tax measures, including expired tax incentives and energy credits known as extenders. Senate Finance Committee Chair Ron Wyden, (D-OR), told Tax Notes on February 10 that certain credits may be included in an omnibus bill or in a scaled-down Build Back Better Act (H.R. 5376).
  • The Biden administration’s request for Congress to appropriate billions more in COVID-19 response funds is meeting bipartisan resistance. Senate Appropriations Chair Patrick Leahy (D-VT) this week commented on negotiations about the omnibus and the White House supplemental, stating, “That should probably be a separate bill.” (Politico, Feb. 17 and PoliticPro, Feb. 18) 

Roundtable & Energy Measures 

Buildings sky

  • Omnibus negotiations and pandemic funding may be followed by congressional consideration of a pared-down BBB bill as the mid-term elections grow closer. Key Sen. Joe Manchin (D-WV), chair of the Senate Energy and Natural Resources Committee, has signaled his support for climate measures in a revised BBB package. (CNN, Jan. 5 and New York Times, Jan. 20)
  • The Roundtable has supported the BBB Act’s climate measures, which include a suite of clean energy tax credits and incentives amounting to $300 billion. (Roundtable Weekly, Jan. 7)
  • The Roundtable sent a letter to Congressional tax writers on Nov. 16, 2021 detailing five recommendations aimed at improving the green energy tax provisions affecting real estate. (Roundtable letter, Nov. 16)  

The Senate returns on Feb. 28 for President Biden’s first State of the Union address on March 1, which will be followed by the administration’s FY2023 budget request. 

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House Passes Government Funding Extension Until March 11 as Appropriators Signal Progress on FY2022 Omnibus

Posted on by Trey Jackson

Capitol building

The House of Representatives on Tuesday passed a continuing resolution (CR) that would prevent a government shutdown on Feb. 18 by extending current government funding levels for three weeks, through March 11. The CR, which also applies to the National Flood Insurance Program, moves to the Senate for consideration next week. (CR legislative text and summary) 

CR & Omnibus 

  • If passed by the Senate, the CR would give lawmakers additional time to finalize a separate “omnibus” spending bill for fiscal year 2022, which runs from Oct. 1, 2021 through Sept. 30, 2022. (BGov, Feb. 9)
  • House and Senate Appropriations Committee leaders announced on Wednesday a “framework” deal for top-line spending levels for defense and domestic funding. Such an agreement would clear the way for congressional committees to complete a sweeping 12-bill spending bundle, which could amount to a $1.5 trillion omnibus package funding government operations into the fall. (PoliticoPro, Feb. 10)
  • A full-year omnibus package would also release an additional $197 billion over 10 years for energy, transportation, and other programs that were part of last year’s bipartisan infrastructure bill. (BGov, Feb. 9 and CQ, Feb. 10) 

Omni & BBB 

Sen. Joe Manchin

  • The “omni” funding bill is now a focus of Congress since President Biden’s multi-trillion Build Back Better (BBB) Act has been sidelined on Capitol Hill. (Politico, Feb. 10)
  • Sen. Joe Manchin (D-WV), above, – a key vote in the 50-50 Senate – said on Sunday that he sees a government funding package as a higher priority than the stalled BBB bill. ‘We have to get a budget bill first,’ Manchin said. (CNN, Feb 6)
  • Manchin this week also expressed his reluctance to endorse additional federal spending, after news that consumer inflation rose to 7.5%, the largest 12-month increase in four decades. (BGov, Feb. 10)
  • Manchin’s statement included, “It’s beyond time for the Federal Reserve to tackle [inflation] head on, and Congress and the Administration must proceed with caution before adding more fuel to an economy already on fire. As inflation and our $30 trillion in national debt continue a historic climb, only in Washington, DC do people seem to think that spending trillions more of taxpayers’ money will cure our problems, let alone inflation,” Manchin said.  (Newsweek, Feb. 10) 

The start of the 2023 fiscal year cycle is approaching as Congress aims to pass an omnibus for the current year by March. President Biden is expected to release his FY2023 budget request shortly after his State of the Union address on March 1.  

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Congress Considers Short-Term Continuing Resolution as Feb. 18 Budget Deadline Looms

Posted on by Trey Jackson

Capitol with flag

House Democratic leaders, facing a heavy agenda and a Feb. 18 government funding deadline, are considering a three-week stopgap funding bill to allow appropriators more time to complete 2022 spending bills. (RollCall, Feb. 4) 

Negotiating Omnibus 

  • The House may vote early next week on a possible “Continuing Resolution” (CR) to extend current funding levels through March 11 and avoid a possible government shutdown. A CR would also require Senate approval. (CQ, Feb. 4)
  • Negotiations among congressional appropriations leaders to reach a deal on a bipartisan omnibus bill for FY202 – which runs from Oct. 1, 2021 through Sept. 30, 2022 – have stalled on reaching top-line spending levels for defense and domestic funding. (The Hill, Feb. 1)
  • This would be the third government funding stopgap for the fiscal year that began Oct. 1.
  • Yesterday, Senate Appropriations Committee Ranking Member Richard Shelby (R-AL) stated that the length of time agreed upon for another CR extension would reflect whether Democrats and Republicans can agree to a funding deal. “If it’s a short-term [CR], that would mean probably that we’re making some progress, real progress,” Shelby said. “If it’s longer, we might go … for the rest of the year.”  (The Hill, Feb. 3) 

A Demanding Agenda 

House Speaker Nancy Pelosi (D-CA)

  • A crowded congressional agenda – including what may be next for the stalled Build Back Better (BBB) Act, international geopolitics, and action on President Biden’s upcoming Supreme Court nominee – adds pressure for policymakers to reach agreement on a spending bill.
  • House Speaker Nancy Pelosi (D-CA), above, yesterday noted the urgency to reach an omnibus funding agreement. She stated, “We’re hoping to get that done as soon as possible in terms of … the omnibus bill.” Pelosi added, “One connection between infrastructure and omnibus is that some of the money in the infrastructure bill cannot be freed up until we pass the omnibus bill,” she said. (Pelosi Weekly Press Conference, Feb. 3)
  • Separately, the impact of the FY2022 funding negotiations are unlikely to affect the timing for congressional consideration of how to pare down the BBB Act (H.R. 5376), according to House Ways and Means Chair Richard Neal (D-MA) and Senate Finance Chair Ron Wyden (D-OR). Both policymakers said they did not want to set an “artificial” deadline for potential revisions to the stalled proposal. (Tax Notes, Feb. 3 and Roundtable Weekly, Jan. 21)
  • As FY2022 spending negotiations continue, The Washington Post reported today that the White House may request additional federal funding from Congress to aid pandemic recovery as current funding for preparedness is starting to dwindle.  

President Biden is also expected to start the next fiscal year cycle with the release of his fiscal budget request for 2023 – shortly after his State of the Union address on March 1. 

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House Democrats Pass Bill to Extend FY22 Government Funding and Suspend Debt Ceiling; Senate Republicans Plan to Oppose

Posted on by Trey Jackson

U.S. Capitol from side with clouds

House Democrats on Sept. 21 passed a short-term funding bill that would keep federal agencies open until Dec. 3 while suspending the debt limit through December 2022. The bill, passed on a party-line vote (220-211) faces bleak chances of Senate approval, where 60 votes are needed to avoid a filibuster in the evenly divided upper chamber. Republicans object to linking the debt ceiling to FY22 government funding. 

Shutdown, Default Loom 

  • The short-term bill to extend funding for government operations at current levels, known as a Continuing Resolution (CR), would avoid a partial government shutdown on Oct. 1. Funding for programs affecting national flood insurance and surface transportation are also scheduled to expire Sept. 30.
  • Senate Minority Leader Mitch McConnell (R-KY) stated Democrats need to separate the CR from legislation that would suspend or increase the debt limit, which the GOP will not support. (Louisville Courier-Journal, Sept. 23)
  • Meanwhile, Treasury Secretary Janet Yellen issued a stark warning to policymakers that they must raise or suspend the debt ceiling as soon as possible – or the federal government will default on its financial obligations sometime in October. (Wall Street Journal, Sept. 19 and Reuters, Sept. 22)
     
  • Yellen stated, “Doing so would likely precipitate a historic financial crisis that would compound the damage of the continuing public health emergency. Default could trigger a spike in interest rates, a steep drop in stock prices and other financial turmoil. Our current economic recovery would reverse into recession, with billions of dollars of growth and millions of jobs lost.” 
  • Treasury has been spending down its reserves since Aug. 1, when the current two-year debt ceiling suspension ended. Yellen warned that hitting the debt ceiling would result in a halt of social security payments to nearly 50 million seniors for a time. Additionally, troops could go unpaid and millions of families who rely on the monthly child tax credit could see delays. (Axios, Sept. 23) 
  • A coalition of 13 real estate trade organizations, including The Roundtable, last week 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)  

Policymakers face the debt ceiling and FY22 government funding deadlines next week as Democrats struggle to advance sprawling legislative bills on infrastructure (see Infrastructure story above). 

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House Democrats Reach Deal for $3.5 Trillion Budget Framework, Schedule September Vote on Bipartisan Infrastructure Bill

Posted on by Trey Jackson

The House of Representatives passed a $3.5 trillion budget resolution Tuesday, after Speaker Nancy Pelosi (D-CA) promised moderate Democrats a September vote on the Senate-passed bipartisan infrastructure bill to garner their support for a framework that sets-up the “reconciliation” process. (Washington Post, Aug. 25)

Why It Matters

  •  “I am committing to pass the bipartisan infrastructure bill by September 27,” Pelosi said. “We must keep the 51-vote privilege by passing the budget and work with House and Senate Democrats to reach agreement in order for the House to vote on a Build Back Better Act that will pass the Senate.” (Speaker Pelosi Statement, Aug. 24; Politico, Aug. 24)

CRE Impact

  • The human infrastructure proposal that may be advanced in the House under budget reconciliation rules would be partially financed by raising taxes on businesses and wealthy individuals – and potentially include a variety of tax increases affecting commercial real estate (see Tax Policy story below)
  • The Real Estate Roundtable held an all-member Infrastructure Town Hall on Aug. 12 to discuss the Senate-passed infrastructure bill, what lay ahead in the House, and the potential impact on commercial real estate.  
  • Rep. Tom Suozzi (D-NY), a member of the tax-writing House Ways and Means Committee, joined Roundtable Chair John Fish (Chairman and CEO, Suffolk), and Roundtable President and CEO Jeffrey DeBoer, for the Town Hall discussion.  (Roundtable Weekly,  Aug. 13)  
  • DeBoer, stated, “This [reconciliation] package may be financed with a variety of tax increases affecting step-up in basis, like-kind exchanges, carried interest and capital gains that would act as a cumulative drag on investment at the exact time when sectors of the economy need incentives to recover from the pandemic. The Roundtable urges Senate and House policymakers to be very cautious as they proceed on the reconciliation bill – so that one-step forward with the physical infrastructure bill is not met with two-steps backward from tax increases.” (Roundtable statement, Aug. 11)

What’s Next

  • Congressional committees are in the process of drafting different sections of the reconciliation package. They have a non-binding deadline of submitting their text by Sept. 15. (Axios, Aug. 24)
  • Reconciliation would likely move in the House first. The House Budget Committee will compile each committee’s individual text into a single package for a floor vote that, if approved, would then be sent to the Senate. 

  • Getting both packages to President Biden’s desk for his signature will be a major challenge. Congressional leadership must consider demands of centrists who balk at the $3.5 trillion price tag for “social” infrastructure, and progressives who believe the $550 billion in new spending for “physical” infrastructure is not big enough to address issues such as climate change. (CNBC, Aug. 25)

When Congress returns after Labor Day, policymakers will face other critical deadlines in addition to their anticipated actions on the infrastructure and reconciliation packages. Legislation is needed after the Treasury Department exhausts its “extraordinary measures” in mid-September to avoid defaulting on the national debt. Congress is also expected to consider a “continuing resolution” to put stop-gap spending measures in place before federal government funds run dry on Sept. 30. (Politico, Aug. 25)

House Passes Bipartisan Bill to Suspend Debt Ceiling, Increase Budget Caps 2 Years and End Sequestration; Senate to Vote on Package Next Week

Posted on by Trey Jackson

The U.S. House of Representatives yesterday passed the Bipartisan Budget Act of 2019 (H.R. 3877) that would suspend the national debt ceiling until July 31, 2021; raise federal spending over the next two years; and avoid the threat of automatic, across-the-board “sequestration” budget cuts. The bill now goes to the Senate, which is expected to vote next week.  ( Section-by-Section summary of the bill, Budget Committee)

The U.S. House of Representatives yesterday passed the   Bipartisan Budget Act of 2019  (H.R. 3877) that would suspend the national debt ceiling until July 31, 2021; raise federal spending over the next two years; and avoid the threat of automatic, across-the-board “sequestration” budget cuts.  
  • The measure, which passed 284-149, caps recent negotiations between Democratic congressional leaders and the White House.  Earlier this month, Treasury Secretary Steven Mnuchin wrote to House Speaker Nancy Pelosi (D-CA) warning that if the debt ceiling was not raised, the U.S. could run out of cash to pay its bills in early September, resulting in potential default on the nation’s financial obligations.  (Roundtable Weekly, July 12) 
  • The deal increases discretionary spending limits $324 billion over two years, replacing the prospect of strict sequestration caps imposed under the Budget Control Act of 2011.  The bill passed by the House permanently ends sequestration, which would impose a 10 percent cut on all programs if budget targets are not met.  (CQ, July 25) 
  • The fiscal package passed by the House would increase the budget cap for FY’20 defense programs by three percent, to $738 billion.  Funding for domestic programs would increase four percent, topping off at $632 billion. (Politico, July 25) 
  • The deal also lifts the debt limit through July 2021, meaning policymakers would not have to address the controversial issue during the 2020 election year. 
  • President Trump encouraged GOP lawmakers to endorse the legislation, tweeting yesterday, “House Republicans should support the TWO YEAR BUDGET AGREEMENT which greatly helps our Military and our Vets. I am totally with you!”  
  • Senate Majority Leader Mitch McConnell, (R-KY) this week stated he expects the Senate to pass the House bill next week and send it to President Trump for his signature. (Washington Post, July 25).  He added, “I make no apologies for this two-year caps deal. I think it’s the best we could have done in a time of divided government. The alternatives were much worse.” (Politico, July 23).   
  • When Congress returns from summer recess on September 9, policymakers will face a tight deadline to set federal appropriations for individual agencies and departments for FY’20.  Current FY’19 funding runs out on September 30, as does legislative authority for the National Flood Insurance and EB-5 investment programs.  
  • If Congress and President Trump cannot agree on how to allocate the $1.37 trillion in discretionary money allotted for the new fiscal year beginning October 1, a stopgap funding measure (or “Continuing Resolution”) may be required.  
  • Last December and January, the lack of a government spending deal over security measures on the southern border led to a 35-day partial government shut down. (Roundtable Weekly, Feb. 1) 

The House recessed today for six weeks; the Senate is scheduled to leave August 2.