Tag: Congress

Congress Faces Short-Term Funding Measure to Prevent Government Shutdown by Sept. 30

Posted on by Abigail Grenadier

Funding for the government will expire Sept. 30 if Congress cannot muster a short-term stopgap patch to keep federal agencies open and avoid a partial government shutdown. House Speaker Kevin McCarthy (R-CA) faces strong opposition from members of the conservative House Freedom Caucus to strike a deal with the Biden administration, which has submitted an additional $44 billion request for disaster relief, border security, and Ukraine. (CQ, Sept. 5 and AP, Aug. 21)

Flood Response Funding

  • An uncertain funding landscape dominates the prospects for legislative developments for the remainder of the year. If policymakers manage to pass a short-term “continuing resolution,” it could require a follow-on “omnibus” budget package for 2024 that may serve as the only must-pass vehicle to move other policy changes through Congress.
  • As the hurricane season picks up momentum, one government program affecting commercial real estate that is subject to the Sept. 30 funding deadline is The National Flood Insurance Program (NFIP). Congress has enacted 25 short-term NFIP reauthorizations since 2017.
  • A new flood rating methodology (Risk Rating 2.0) in 2021 established by the Federal Emergency Management Agency (FEMA) has attracted additional disagreement among policymakers after it was reported that resulting rate hikes could cause the loss of coverage for hundreds of thousands of policyholders. (Associated Press, July 22)
  • The Roundtable is a long-standing supporter of a long-term reauthorization of the NFIP with appropriate reforms that create long-term stability for policyholders, improved accuracy of flood maps, mitigation reforms, enhanced affordability, and the acceptance of non-NFIP policies for commercial properties. (Roundtable Weekly, June 30)

Tax and Other Policy

  • House Republican leaders hope to break an impasse in the GOP caucus over a tax relief package passed by the Ways and Means Committee that includes measures affecting commercial real estate. Committee Chairman Jason Smith (R-MO), above, spoke about his efforts to advance the tax measure during The Roundtable’s recent Annual Meeting. (Roundtable Weekly, June 16 and June 9) 
  • The committee bill has not reached the House floor for a vote due to opposition by members from high-tax states who want the package to include relief from the $10,000 cap on state and local tax deductions (SALT), enacted in the GOP’s 2017 tax law. (Washington Post, July 24 and  Roll Call). 
  • The tax package would extend expired business interest deductibility rules and 100% immediate expensing (bonus depreciation) for qualifying capital investments. Bonus depreciation is 80% in 2023 and gradually phasing down.
  • Two other tax issues with bipartisan support that may be folded into a negotiated end-of-year tax package are the expansion of The Roundtable-supported low-income housing tax credit and technical corrections to SECURE 2.0, a package of retirement provisions. (Tax Notes, Sept. 5)

Hearings & Climate Disclosure Rule

SEC Chair Gary Gensler
  • Securities and Exchange Commission (SEC) Chair Gary Gensler will testify before the Senate Banking Committee on Sept. 12, followed by an expected appearance before the House Financial Services Committee on Sept. 27. (PoliticoPro, Aug. 28)
  • Committee members are likely to question Gensler about a highly anticipated climate disclosure rule and SEC proposals impacting advisory client assets and cybersecurity risk management. (Thomson Reuters, Aug. 22, “SEC Plans to Finalize 30 Proposed Rules in Near Term”)

The policy issues above and many more will be the focus of discussions during The Roundtable’s Fall Meeting (Roundtable-level members only) on Oct. 16-17 in Washington.

Debt Ceiling Compromise Passed Days Before National Default Deadline

Posted on by Trey Jackson

Capitol side view

Congress passed compromise legislation this week to suspend the debt ceiling for two years and restrain government spending, sending it to President Biden for his signature and calming world financial markets days before a US government default. (CQ and Wall Street Journal, June 2)

After the Debt Ceiling

  • The House on Wednesday night passed the Fiscal Responsibility Act (H.R. 3746)—forged by President Joe Biden, House Speaker Kevin McCarthy (R-CA), and their negotiation teams—to suspend the nation’s $31.4 trillion debt limit until Jan. 1, 2025 and cut spending by at least $1.5 trillion. The Senate approved the bill last night by a bipartisan vote of 63-36. (Congressional Budget Office, May 30 and Associated Press, May 26)
  • “No one gets everything they want in a negotiation, but make no mistake: this bipartisan agreement is a big win for our economy and the American people,” President Biden stated last night. “I look forward to signing this bill into law as soon as possible…” (White House statement, June 1)
  • House policymakers have signaled they may follow the debt ceiling crisis with a legislative tax proposal that could include significant measures affecting commercial real estate. (Roundtable Weekly, May 26)
  • Congressional action on such measures would come at a time when the office sector faces difficult conditions, including asset price discovery and tighter liquidity. (Wall Street Journal, May 30 Financial Times, May 29 | GlobeSt, May 26) 

Economic Conditions & CRE

Ross Perot, Jr. on Bloomberg TV

  • Real Estate Roundtable Chair John Fish (Chairman and CEO, SUFFOLK) explained the economic conditions facing CRE and the office market, along with other pressures such as remote work and a shortage of labor, in a May 26 Boston Globe interview. “We’re in a very precarious situation,” Fish said.
  • Roundtable Board Member Ross Perot, Jr., above, (Chairman, The Perot Companies and Hillwood) discussed the financing challenges faced by some CRE sectors in an interview with Bloomberg TV on Wednesday. “If the industry can’t get a construction loan, real estate will have a recession,” Perot said. “The key to commercial real estate today will be banking.”
  • The Federal Reserve’s “Beige Book” issued this week also reported on the nation’s current overall economic activity, noting, “Commercial construction and real estate activity decreased overall, with the office segment continuing to be a weak spot.” (GlobeSt, May 31)
  • Additionally, Trepp’s CMBS Delinquency Report issued this week showed the nation’s overall CMBS delinquency rate hit a 14-month high, topping 4% for the first time since 2018. Although May’s delinquency rate jumped to 3.62%, up 53 basis points for the month, the all-time high registered 10.34% in July 2012 and the COVID-19 high reached 10.32% in June 2020.
  • Federal Reserve monetary policies, congressional fiscal policy, potential tax measures, and other issues impacting CRE will be discussed during The Real Estate Roundtable’s Annual Meeting on June 13-14 in Washington, DC.

The Roundtable meeting includes policy advisory committee meetings—open to all members—that will feature prominent policymakers, including Senate Banking Committee Member Bill Hagerty (R-TN); House Ways and Means Committee Chairman Jason Smith (R-MO); David Crane, the US-DOE’s Director of the Office of Clean Energy Demonstrations; and Alejandra Nunez, US-EPA Assistant Administrator overseeing climate policy.

#  #  # 

Bipartisan Legislation Reintroduced to Allow Greater REIT Equity Investments in Distressed Retail Tenants

Posted on by Trey Jackson

Retail tenant distress

Bipartisan legislation reintroduced this week by House Ways and Means Committee Members Darin LaHood (R- IL) and Brad Schneider (D-IL) would allow real estate investment trusts (REITs) to make greater equity investments in retail tenants that have yet to recover from the pandemic’s economic impact. 

Support for Retail Tenant Assistance

  • The Retail Revitalization Act (H.R. 3749) is aimed at unlocking capital for productive investment and helping prevent further large-scale job losses and bankruptcies in the retail sector and its supply chain. (Congressional Record, May 30)
  • As of May 5, ten major retailers had filed for bankruptcy protection in 2023. The number of retail failures, which includes Bed Bath & Beyond, David’s Bridal, and Party City, is already twice the level of 2022. More bankruptcies are anticipated. (Forbes, May 5 and Forbes, May 15)
  • Real Estate Roundtable President Jeffrey DeBoer stated, “The Retail Revitalization Act would reform an outdated section of our tax code that currently prevents the commercial real estate industry from stepping forward and deploying its own capital to solve significant economic challenges. Retail bankruptcies have negative consequences for employees, surrounding businesses, and local communities. This bipartisan legislation to allow REITs to invest more heavily in their tenants is exactly the type of cost-effective, commonsense measure that everyone can and should support. The bill will save jobs, increase local tax revenue, and create a stronger foundation for future economic growth.”

Amending REIT Rules

REITs - graphic

  • The LaHood-Schneider legislation—strongly supported by The Real Estate Roundtable—would modify tax provisions limiting REITs’ ability to invest equity capital in their retail tenants. The bill would amend existing “related-party rent” rules by:
    • increasing the capacity of a REIT to own the equity of a distressed tenant from 10% to 50% and from 10% to 30% for all other tenants;

    • changing the ownership attribution rules used to determine what is considered related party rent under current REIT rules to the general ownership attribution rules used elsewhere in the tax code, and;

    • changing the limitation on space that a REIT can lease to its taxable REIT subsidiary.

Tax Policymakers

  • House Ways and Means Committee Chairman Jason Smith (R-MO)Tax proposals such as H.R. 3749 and others will be discussed during TPAC, held in conjunction with The Roundtable’s all-member Annual Meeting on June 13-14 in Washington, DC. TPAC speakers will include:

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

    • House Ways and Means Committee Member Brad Schneider (D-IL)
    • Joint Committee on Taxation Chief of Staff Thomas Barthold
    • Senior staff from Senate Finance Committee and House Ways and Means Committee

TPAC will also feature a panel session on “Post-Pandemic Real Estate Challenges and Tax Policy: Debt Workouts / Tax Incentives for Property Repurposing, Community Revitalization, and Housing.” All Roundtable members are encouraged to attend.

#  #  #

 

House Tax Package Expected to Follow Debt Ceiling Resolution

Posted on by Trey Jackson

US Capitol sunsetThe House Ways and Means Committee may release a tax-focused economic growth package in June after a final resolution is reached between President Joe Biden, House Speaker Kevin McCarthy (R-CA), and their negotiation teams on the debt ceiling. The intense talks on federal spending limits have less than a week before the Treasury Department estimates the nation may default on its debt obligations. (Wall Street Journal, May 25 | PoliticoPro, May 23 | Roundtable Weekly, May 19) 

Tax Measures & CRE 

  • The House Republican tax package is about 90% complete and “buttoned up pretty tight,” according to Ways and Means Member Kevin Hern (R-OK). “We’re making sure that we don’t disrupt any of the debt limit conversations and distract from that, but it would be ready to go very quickly,” Hern said. (Tax Notes, May 24)
     
  • Ways and Means Committee Member Randy Feenstra (R-IA) commented that the package will likely include measures that expired last year, including full bonus depreciation and certain taxpayer-favorable rules related to the deductibility of business interest under Section 163(j)—both supported by The Real Estate Roundtable. (PoliticoPro, May 23 and BGov, May 25)
     
  • Under the Tax Cuts and Jobs Act (TCJA) of 2017, 100% bonus depreciation applies to capital investments made between 2018 and 2022 (as well as capital improvements made to the interior of nonresidential buildings). However, the bonus depreciation benefit began phasing down this year. In addition, real estate businesses that elect out of TCJA’s limits on business interest deductibility do not qualify for the bonus depreciation benefit.
     
  • The House tax package is expected to extend 100% bonus depreciation through at least 2025, allowing many taxpayers to continue immediately expensing qualified interior improvements. Moreover, by reinstating certain expired provisions from section 163(j), the tax bill would allow more real estate businesses to avail themselves of the bonus depreciation benefit without inhibiting their ability to deduct their business interest expense. 

Additional Provisions and TCJA Permanency 

House Ways and Means Committee doorway

  • The economic growth package could also include provisions extending the enhanced child tax credit and the deductibility of R&D expenditures.  Housing-related measures, such as an expansion of the low-income housing tax credit, are also under consideration. 
  • Separately, the Ways and Means Committee may also consider the TCJA Permanency Act (H.R. 976), reintroduced by Committee Vice Chairman Vern Buchanan (R-FL) in February. The bill would permanently extend TCJA provisions scheduled to sunset at the end of 2025, including the 20 percent deduction for qualified pass-through business income (Section 199A). (Tax Notes and Roundtable Weekly, Feb. 24)
  • While a TCJA permanency bill is likely dead on arrival in the current Senate, the House economic growth tax package could be the starting point for bipartisan negotiations with congressional Democrats on a limited number of tax and economic priorities as the year further unfolds. 

House Ways and Means Committee Chairman Jason Smith (R-MO) will be a guest at The Roundtable’s June 13-14 all-member Annual Meeting and policy adivisory committee meetings will include discussions on a debt ceiling agreement and potential tax legislation. 

#  #  # 

Administration Unsuccessfully Seeks to Add Like-Kind Exchange Restrictions to Debt Ceiling Talks

Posted on by Trey Jackson
LKE form 8824 held by business person

President Joe Biden and House Speaker Kevin McCarthy (R-CA) signaled progress this week on debt limit and federal spending talks after they assigned teams of negotiators to bang out an agreement before a looming national default “x-date” is reached in June. (BGov and CQ, May 18)

LKE Restrictions Rejected

  • One cost-cutting measure proposed by the administration’s team, and rejected by Republicans, would have imposed limitations on the use of Section 1031 like-kind exchanges. (Washington Post, May 15)
  • President Biden has consistently proposed limiting the use of LKEs, most recently as part of his FY2024 budget proposal submitted earlier this year. (Roundtable Weekly, March 10)
  • “The administration’s proposal to severely limit the use of section 1031 would destroy jobs, lock properties into unproductive uses at a time when a realignment of real estate assets is needed, harm housing supply, and end a mechanism used by environmental groups to conserve land and natural spaces,’ said Real Estate Roundtable President and CEO Jeffrey DeBoer.
  • “It is an idea that has been debated by Congress numerous times and always rejected, most recently in a unanimous vote on the Senate floor,” DeBoer continued. “Perhaps most importantly, the proposal would eliminate one of the only real estate market liquidity tools available at a time when credit markets and banks are tightening, as they are today.”
  • Academic and other economic research has repeatedly demonstrated the positive economic contribution of LKEs and their importance to the US economy. (Roundtable Weekly, July 1, 2022 and EY report—“Economic Contribution of the Like-Kind Exchange Rules to the US economy in 2021: An Update”)

Looming Deadline

US Capitol
  • President Biden and Speaker McCarthy assigned five Washington insiders on May 16 to the immense negotiation task, in hopes that an “agreement in principle” can be reached this weekend, which would allow the House and Senate to vote before June 1. (The Hill and BGov, May 17 | Associated Press, May 18)
  • “I’m confident that we’ll get the agreement on the budget and America will not default,” Biden said before departing this week for a meeting of world leaders at the G-7 annual summit in Japan. (CBS News, May 17)
  • McCarthy said yesterday, “I see the path that we can come to an agreement. And I think we have a structure now and everybody’s working hard.” (Politico, May 18)

House Democrats this week began preparing an emergency “discharge petition” to raise the debt ceiling if negotiators are unable to reach an agreement, though its odds of passing are uncertain. (Wall Street Journal, May 17)

#   #   #

Debt Ceiling Talks Inch Forward as Republicans, Democrats Prioritize Permitting Reform for Energy Projects

Posted on by Trey Jackson

Big Four with President Biden

A May 9 meeting between President Joe Biden and the “Big Four” congressional leaders about the debt ceiling and federal spending ended with little progress—yet the policymakers agreed to meet early next week as their respective staffs begin separate budget discussions. (The Hill, May 11 and Axios May 9 | Roundtable Weekly, May 5)

 Talks Begin 

  • As the “X date” for defaulting on the national debt looms in June, House Speaker Kevin McCarthy (R-CA), Senate Minority Leader Mitch McConnell (R-KY), Senate Majority Leader Chuck Schumer (D-NY), and House Minority Leader Hakeem Jeffries (D-NY) met to discuss raising the $31.4 trillion U.S. debt limit with President Biden, who described the gathering as “productive.” (Associated Press and Reuters, May 10)
  • McCarthy commented he “didn’t see any new movement,” but added he was willing to discuss spending cutbacks such as clawing back funding for pandemic programs. He added that Biden may also be open to discussing permitting reform for energy infrastructure projects, though the two parties are far apart on the specifics of their legislative proposals. (Washington Post and CNN, May 10 and BGov, May 9)

Energy Infrastructure Priorities 

White House Senior Advisor John Podesta

Related Energy News  EPA logo

  • The Environmental Protection Agency released a proposed rule today to cut carbon emissions by 90% from the nation’s power plants, drawing a “counterattack from Republicans and coal-state Democrat Sen. Joe Manchin” (D-WV), chairman of the Senate Energy Committee. (New York Times, May 11 and POLITICO, May 11)
  • De-carbonizing the electric grid, and moving utilities away from combusting coal and natural gas, would help building owners and commercial tenants reduce their “indirect” Scope 2 GHG emissions attributable to the electricity they purchase.
  • Meanwhile, the General Services Administration (GSA) announced yesterday it will leverage $3.4 billion it received under the IRA to pursue new public-private partnerships that will improve energy efficiency, reduce onsite emissions, and encourage electrification in federal buildings. (GSA news release, May 10)
  • The GSA will advance the White House’s  Climate Smart Buildings Initiative. It aims to modernize 41 federal facilities in DC and the Midwest through long-term “performance contracts” with private sector companies that guarantee projects will pay for themselves over time through energy savings that accrue from retrofit installations. (BGov, May 10). See GSA’s National Deep Energy Retrofit program. 

The Roundtable will focus on the impact of the debit ceiling and federal energy policy priorities during its all-member Annual Meeting on June 13-14 in Washington. 

# #  # 

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.

#  #  # 

GOP Speaker Votes Stymie Start of House Session in Divided 118th Congress

Posted on by Trey Jackson

14th Vote for House Speaker 2023

The protracted vote process for Republican House Speaker this week stalled the start of the new GOP House majority in a narrowly divided 118th Congress, portending difficulties ahead for policymakers to reach agreement on raising the debt limit this summer and passing FY24 funding for the government by Sept. 30. This speaker election is the longest since 1859. (Semafor, Jan. 6 | The Hill, Jan. 5 | Bloomberg Law, Jan. 3)

House Challenges Ahead U.S. Capitol evening

  • Until a House speaker is elected, new representatives cannot be sworn in, lawmakers cannot introduce bills, and committee chairs (including leadership of the important tax-writing House Ways and Means Committee) cannot be confirmed. (BGov, Jan. 6 and ABC News, Jan. 5)
  • Sen. John Cornyn (R-TX), an adviser to the Senate GOP leadership team, said raising the debt limit with a slim, five-seat Republican majority in the House that can be leveraged by a small group of staunch conservatives, “will probably be the single biggest challenge the House will have.” (The Hill, Jan. 5)
  • Failure to raise the U.S. debt limit would lead to a first-ever default, causing financial chaos in the global economy. In 2011, an impasse between Republicans and President Obama over increasing the debt limit led to a temporary downgrade of the credit of the United States. The crisis ended after an agreement was reached to cut more than $2 trillion in spending over a decade. (New York Times, Dec. 9, 2022 and Washington Post, Dec. 5, 2022 | Congressional Research Service, Nov. 22, 2022)
  • Additionally, funding for the government expires on Sept. 30, the end of the federal fiscal year. A legislative standoff on spending priorities for FY24 after Sept. 30 could lead to either a “Continuing Resolution” to fund the government programs at current levels or a partial shutdown. (CQ, Dec. 29, 2022)

The Regulatory Front

SEC logo - image

  • The new Republican majority in the House is expected to bring intense oversight of government programs funded by the Inflation Reduction Act (IRA) passed by Congress in August—and increased scrutiny of proposed regulations that could impact commercial real estate. (Roundtable Weekly, Aug. 12, 2022)
  • The IRA included nearly $370 billion in climate spending—the largest federal clean energy investment in U.S. history—with measures important to CRE. [See Roundtable Fact Sheets on the IRA & CRE: Clean Energy Tax Incentives (Sept. 20) and Revenue Provisions (Aug. 17)]
  • The Real Estate Roundtable submitted extensive comments to Treasury and the IRS on Nov. 4 that address various clean energy tax incentives in the IRA. (Nov. 4 letter and Roundtable Weekly, Aug. 12)
  • The Roundtable also plans to submit comments by Jan. 18 to the Environmental Protection Agency on EPA federal grant programs that could impact CRE.

  • Securities and Exchange Commission (SEC) climate disclosure regulations are now expected 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 to the SEC about the proposal on June 10. (Roundtable Weekly, June 10, 2022)

Policymaking in the 118th Congress and 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.

#  #  # 

House to Vote on Senate-Approved “Omnibus” Funding Package

Posted on by Trey Jackson

U.S. Capitol golden glowThe House of Representatives is expected to pass a Senate-approved $1.65 trillion fiscal 2023 bill by tomorrow to avert a government shutdown. President Biden needs to sign the 4,155-page “omnibus” package before midnight on Dec. 23 to fund the government through Sept. 30, 2023. (CNBC and Politico, Dec. 22 | The Hill, Dec. 20)

Omnibus & Taxes

  • The omnibus passed by the Senate today includes $858 billion in military spending and approximately $772.5 billion in nondefense discretionary spending. The $1.65 trillion legislative package is a slight increase over the previous fiscal year’s $1.5 trillion omnibus. (Wall Street Journal, Dec. 22)
  • The massive funding bill also includes a bipartisan package of retirement savings provisions, but not other proposals on lawmakers’ shortlist of end-of-year tax priorities, such as an expansion of the low-income housing tax credit (LIHTC). The Roundtable’s support for the LIHTC and other provisions such as modernizing the rules for REITs and facilitating condominium construction will continue into the 118th Congress. (Tax Notes, Dec. 21 and Roundtable Weekly, Oct. 21)

The outlook for policy in the new Congress will be a topic for discussion during The Roundtable’s Jan. 24-25 all-member State of The Industry Meeting in Washington.

#  #  # 

Congress Extends Funding Deadline to Dec. 23; Democrats Pushing Full-Year Omnibus Spending Bill

Posted on by Trey Jackson

U.S. CapitolThis week, Congress passed a government funding extension package until Dec. 23 while appropriators continue working on a $1.7 trillion FY2023 “omnibus” spending deal that they may unveil on Monday. (CQ News and BGov, Dec. 16) 

Omnibus Negotiations 

  • President Biden is expected to sign the extension today, as bipartisan efforts to reach a funding agreement continue among congressional policymakers. Some Republicans, including House Minority Leader Kevin McCarthy (R-CA), are urging their colleagues to postpone negotiations until January when the GOP assumes majority control of the House. (Wall Street Journal, Dec. 14)
     
  • The logjam in reaching a final deal focuses on $26 billion in non-defense, domestic spending. Both sides have agreed on $858 billion for defense spending. (Forbes, Dec. 14)
     
  • If an agreement on an omnibus cannot be reached next week, Democrats may forego new legislation in favor of a one-year continuing resolution that would freeze government funding at current levels and allow certain tax policies to expire. (Roundtable Weekly, Dec. 2 and Dec. 9) 

Tax Policy Prospects 

House Ways and Means Chairman Richard Neal (D-MA)

  • Chances that a spending agreement will include tax policy—including “extenders” of tax incentives that have expired or are set to lapse after 2022—are uncertain. (Roundtable Weekly, Dec. 9)
  • House Ways and Means Committee Chair Richard Neal (D-MA), above, said on Thursday, “We continue the negotiations. The conversations are ongoing. I still can see the contours of a big deal.” (BGov, Dec. 16)
  • Senate Minority Whip John Thune (R-SD) said earlier this week that he is doubtful that a year-end tax deal will be added to an omnibus. (Politico, Dec. 13)

Implementing IRA Tax Provisions

  • The Internal Revenue Service (IRS) will open a new office to monitor the agency’s implementation of the 2022 Inflation Reduction Act’s clean energy provisions, according to a new IRS report released Thursday.
  • The Inflation Reduction Act (IRA) Transformation & Implementation Office will include units focused on “implementation of new tax law provisions, taxpayer services transformation, tax compliance transformation and human capital transformation.” (BGov, Dec. 15)
  • Additionally, The White House released a guidebook this week on the IRA’s clean energy provisions as a compendium reference to the large amount of federal energy and climate programs financed by the IRA. (White House Fact Sheet, Dec. 15) 

The Roundtable will discuss energy and tax policy developments during our 2023 State of the Industry and Policy Advisory Committee meetings on Jan. 24-25 in Washington, DC.

#  #  #