Tag: Infrastructure

Infrastructure Negotiations Continue as Congress Extends Government Funding to Dec. 3; Debt Ceiling Deadline Looms

Posted on by Trey Jackson

U.S. Capitol

Intense negotiations among moderate and progressive Democrats on the scope and cost of the $3.5 trillion “human” infrastructure package continued this week, delaying a vote yesterday on the $1 trillion bipartisan “physical” infrastructure bill. House progressives have insisted they will not vote for the bipartisan bill until Senate centrists commit to support a multitrillion-dollar social benefits package. 

Moderates in the Balance 

  • President Joe Biden, House Speaker Nancy Pelosi (D-CA) and Senate Majority Leader Chuck Schumer (D-NY) this week engaged moderate Sens. Joe Manchin (D-WV) and Kyrsten Sinema (D-AZ) in hopes of sealing the support of all 50 Senate Democrats on the “human” infrastructure package. That bill’s passage depends on the budget reconciliation process to bypass Republican opposition. (Reuters, Sept. 28)
  • Sen. Manchin this week released a document indicating the terms for his potential support of the reconciliation package. Manchin’s conditions, provided to Schumer on July 28, cite a topline cost of $1.5 billion for spending on social programs and climate change – $2 trillion less than the package that Democratic progressives have agreed to support.  (Politico, Sept. 30)
  • The Manchin document included proposals to raise the corporate tax rate to 25% and increase the top tax rate on ordinary income to 39.6%. It also lists as an offset condition to “end carried interest,” raise the capital gains tax rate to 28 percent, and notes that “any revenue exceeding $1.5 trillion” should be used to reduce the national deficit. 
  • Tax issues affecting CRE in the “human” infrastructure package are summarized in The Roundtable’s “Pass-Through Businesses and the Reconciliation Bill” document. 
  • White House Press Secretary Jen Psaki yesterday said, “A great deal of progress has been made this week, and we are closer to an agreement than ever. But we are not there yet, and so, we will need some additional time to finish the work.”  (White House Statement, Sept. 30) 

CR and Debt Ceiling 

Treasury Department

  • Meanwhile, Congress passed a Continuing Resolution (CR) yesterday to fund the government through Dec. 3. President Biden signed the bill hours before a partial federal shutdown was scheduled to take effect. (BGov and CQ, Oct 1)
  • The flurry of activity in Washington this week also included action on the debt ceiling. Legislation that would suspend the nation’s debt limit until December 2022 passed the House on Sept. 29 but is expected to fail in the Senate, where 60 votes are needed to advance the bill in the 50-50 upper chamber. Republicans oppose the measure, insisting that Democrats should suspend the debt ceiling through the budget reconciliation process, which requires 50 votes. (CNBC, Sept. 29)

Treasury Secretary Janel Yellen testifying before Congress

  • The debt ceiling must be suspended by Oct. 18 to avoid the government from defaulting on its financial obligations, according to Treasury Secretary Janet Yellen’s Sept. 28 testimony before the Senate Banking Committee.
  • Unless Congress increases the government’s authority to borrow more, “It would be disastrous for the American economy, for global financial markets, and for millions of families and workers,” Yellen said. Federal Reserve Chairman Jerome Powell also testified, supporting Yellen’s view about the catastrophic economic consequences if the government were to default. (AP, Sept. 28)

The potential impact of infrastructure policy proposals on commercial real estate markets, employment and investment in communities Washington will be the focus of discussion during The Roundtable’s Fall Meeting on Oct 5.

#  #   # 

Real Estate Industry Weighs in Against Potential Partnership Tax Changes as House Lawmakers Prepare Next Steps for Infrastructure, Tax Bills

Posted on by Trey Jackson

Senator Roy Wyden (D-OR) comments on floor

The Real Estate Roundtable and 22 other national real estate organizations wrote today to Senate Finance Committee Chairman Ron Wyden expressing significant concerns regarding his draft legislation to overhaul partnership tax rules. The letter was sent after congressional leaders and Treasury Secretary Janet Yellen yesterday announced they had agreed on a framework for moving forward with human infrastructure legislation, which includes a list of tax issues for discussion and potential inclusion in a final reconciliation bill. Additionally, the House Budget Committee announced it would “mark up” the combined $3.5 trillion reconciliation bill tomorrow. (Coalition letter, Sept. 24 and BGov, Sept. 23) 

Why It Matters 

  • On September 10, Chairman Wyden proposed a far-reaching restructuring of partnership taxation that would raise at least $172 billion over 10 years. Chairman Wyden or others could put forward the partnership proposals as revenue provisions for the reconciliation bill.
  • Real Estate Roundtable President and CEO Jeffrey DeBoer stated, “Partnerships are used to bring parties together to create and grow businesses that propel job creation, new investment, and productive economic activity. Partnerships contribute immensely to the culture of dynamic entrepreneurship and risk-taking that is missing in many parts of the world where business activity is dominated by large, public corporations. In this current environment, Congress should be working on ways to encourage and strengthen partnerships, not cut their knees out from under them.” (Roundtable Weekly, Sept. 10)
  • Nearly half of the four million partnerships in the United States are real estate partnerships. These pass-through businesses are a key driver of jobs, investment, and local tax revenue.
  • Provisions in the draft bill would alter the tax rules that apply when a partnership is formed and property is contributed, creating new barriers to business formation. Other provisions would changes the rules when a partnership borrows to finance its growth and expansion, as well as when a partnership distributes profits and gains to the owners. 
  • Many of the provisions in Wyden’s draft would apply retroactively to economic arrangements entered into years, and sometimes decades, earlier. A proposal requiring that partners share all debt in accordance with partnership profits could overturn decades of tax law with respect to nonrecourse borrowing by a partnership.
  • The coalition of 24 real estate organizations stated, “With millions of Americans still unemployed and others who have yet to return to the labor force, we encourage you to focus instead on reforms that will strengthen and expand partnerships’ ability to create jobs and economic opportunities.” (Coalition letter, Sept. 24)

Infrastructure / Reconciliation Developments 

Capitol Building evening 475w

  • A vote on the bipartisan infrastructure legislation is expected on Monday, Sept. 27 or Tuesday, Sept. 28, but that could change depending on Democratic leaders’ ability to ensure sufficient votes for passage.
  • The House Budget Committee’s scheduled mark-up the $3.5 trillion reconciliation bill on Saturday afternoon, Sept. 25 will proceed as Democrats race to reach consensus with moderates who object to the bill’s overall price. (PoliticoPro, Sept. 23)
  • The framework deal between House and Senate Leaders reportedly includes an understanding between Senate Finance Committee Chairman Ron Wyden (D-OR) and House Ways and Means Committee Chairman Richard Neal (D-MA) about revenue-raising proposals that could be used to pay for the massive proposal. (The Hill, Sept. 23)
  • Senate Majority Leader Chuck Schumer (D-NY) described the agreement as a “menu of options that will pay for any final negotiated agreement” as Pelosi called it “an agreement on how we can consider, go forward in a way to pay for this.” 

Roundtable Resources 

RER PC logo x500w white background

Infrastructure bills and tax policy issues in play that may impact commercial real estate will be the focus of discussions during The Roundtable’s Fall Meeting on Oct. 5 in Washington, DC (Roundtable-level members only).

#  #  #

Positive Transit Measures Included in Reconciliation Package

Posted on by Trey Jackson

Infrastructure Virginia highway

The House Transportation and Infrastructure (T&I) Committee this week marked-up its $57.3 billion piece of the reconciliation package with a focus on mass transit and high-speed rail.

  • Many of the T&I measures are now in line with the Biden administration’s original transit priorities, which were pared down in the Senate’s final physical infrastructure bill. (Washington Post, Sept. 10)

  • Roundtable-supported measures in the T&I Committee’s bill include:

    • A competitive federal grant program to support transit access for affordable housing projects and improve mobility for low-income riders; 
    • Grants administered by the Federal Highway Administration to support transportation equity and reconnect communities divided by “existing infrastructure barriers;”
    • Funds to improve high-speed rail corridors;
    • Credit risk assistance to develop rail infrastructure under the Railroad Rehabilitation and Improvement financing (RRIF) program; and
    • Funds to convert federal buildings owned or managed by the General Services Administration to “high-performance green buildings.”    
  • Separately, the Ways and Means Committee’s package also proposed favorable tax-exempt bond financing improvements to attract greater public-private partnership investments in transportation projects.

Timing for a House vote on the sprawling reconciliation bill is uncertain. Modifications to the tax, energy or transportation sections of the bill could be introduced when it is sent to the House Rules Committee, which determines floor action – or through an amendment on the floor. House Speaker Nancy Pelosi (D-CA) can afford to lose only three votes when the final legislation comes to a vote. (Bloomberg, Sept. 15)

#  #  # 

House Ways and Means Committee Advances Historic Legislation with Safety Net Expansion and $2.1 Trillion in Tax Increases

Posted on by Trey Jackson

House Ways and Means Committee graphic

The House Ways and Means Committee voted to advance legislation that would expand benefits for low-income families, invest in affordable housing and other Democratic priorities, and finance the initiatives with a $2.1 trillion tax increase that primarily falls on high-income individuals, pass-through businesses, and corporations. The legislation excludes several tax proposals put forward by the Biden administration and Senate lawmakers that would increase the tax burden on real estate. (Ways and Means news release and markup resources) 

  • Real Estate Roundtable President Jeffrey DeBoer stated, “The House Ways and Means Committee’s proposals include significant tax increases on corporations and income received by upper income taxpayers, and not on business activities like real estate.  Even so, the combined tax hikes on income received from pass-through entities could threaten job creation and business expansion. As the bill moves forward, we encourage Congress to review the suggested tax hikes, particularly those on pass-through businesses, and work to ensure that unnecessary and unintended damage is not done to the economy. Substantial commercial real estate activities are conducted by pass-through entities and these activities create jobs, support retirement savings, and boost tax revenue for critical public services provided by local governments. The Roundtable is encouraged, yet cautious, at this still relatively early stage of the legislative process. Further changes may be on the horizon, both positive and negative.” 
  • Tax issues affecting CRE are summarized in The Roundtable’s summary on Real Estate Tax Issues and Budget Reconciliation Legislation. The real estate tax issues addressed by the W&M Committee include: 

Ways and Means markup


Real Property Like-Kind Exchanges (Section 1031) 

  • The bill wisely preserves taxpayers’ ability to defer capital gain when exchanging real property for another property of like kind. 

Step-Up in Basis and Taxation of Gains at Death 

  • The bill preserves the step-up in basis that applies to appreciated gain when real estate is transferred from a decedent to an heir. The bill does not impose capital gains tax on appreciated real estate when transferred by a decedent or donor.

Capital Gains 

  • The bill increases the maximum capital gains rate from 20% to 25%. The 3.8% investment tax is maintained and extended to all taxpayers, thus making the effective capital gain tax rate 28.8%. The President’s budget proposed increasing the capital gains rate to 39.6% to create parity between the tax rate on ordinary income and capital gains.

Real Estate Carried Interest 

  • The bill generally extends from 3 years to 5 years the holding period for partnership gains attributable to a profits interest to qualify for the long-term capital gains rate. However, the bill preserves the shorter 3-year holding period for capital gain related to a real property trade or business.  The President’s budget proposed converting all carried interest income derived from a profits interest in a real estate partnership to ordinary income.

Pass-Through Business Income Deduction (Section 199A) 

  • The bill limits the maximum deduction available for pass-through business income under section 199A to no more than $400,000 for an individual and $500,000 in the case of a joint return ($2.5 million).

Net Investment Income Tax 

  • The bill would apply the 3.8% net investment income tax to income derived from a trade or business, capital gain, dividends, interest, and rental income regardless of whether the taxpayer is active or passive in the activity.

Other Tax Issues 

  • Other tax issues addressed by the committee included affordable housing, infrastructure financing, grantor trusts, deductibility of active losses and REIT constructive ownership rules. These issues are also summarized in The Roundtable’s summary on Real Estate Tax Issues and Budget Reconciliation Legislation.
  • House Speaker Nancy Pelosi (D-CA) is expected to address a provision affecting the $10,000 limit on state and local deductions (SALT) before a final bill is assembled for a floor vote. (CNBC, Sept. 15)
  • The committee’s proposals on clean energy incentives are detailed in the Roundtable Weekly story below on energy policy. 

The House is expected to try to resolve major differences between their final bill and the Senate’s version before voting on the package. Senate Majority Leader Chuck. Schumer (D-NY) has not set a formal deadline for the Senate to complete its work but he said Tuesday “there’s going to be a lot of intense discussions and negotiations over the next few weeks.” (RollCall, Sept. 14) 

#  #  # 

Democrats Advance Human Infrastructure Package While Facing Tight Deadlines on Physical Infrastructure Bill, Budget Funding and Debt Ceiling

Posted on by Trey Jackson

Capitol Building in Washington, DC side view
House Democrats this week advanced 13 committee bills – including positive measures affecting commercial real estate – that will be assembled into a massive $3.5 trillion “human” infrastructure package for policymakers to consider as soon as this month. (See Roundtable Weekly stories below for details on tax, energy and transportation legislation). 

Human and Physical Infrastructure 

  • Democrats aim to pass President Joe Biden’s massive social spending and tax package in the House and Senate without Republican support using the budget reconciliation process – despite signals of resistance from some caucus members in a narrowly divided Congress. (BGov, Sept. 15)  
  • Additionally, House Speaker Nancy Pelosi (D-CA) has set a Sept. 27 deadline for the House to vote on a separate, bipartisan “physical” infrastructure bill passed by the Senate on Aug. 10. (Roundtable Weekly, Sept. 10 and Aug. 20) 
  • Congress also needs to act on FY22 government funding by October 1 to avoid a partial shutdown – and reach agreement on raising the federal debt ceiling in October to avoid a national credit downgrade or default. (Politico, Sept. 12) 

Roundtable Response

Real Estate Roundtable Town Hall on Reconciliation bill

[Photo, right to left: Roundtable Chair John Fish (Chairman and CEO, Suffolk); Roundtable President and CEO Jeffrey DeBoer and Senior Vice President & Counsel Ryan McCormick during today’s Town Hall discussion on the House reconciliation package.]

  • The physical infrastructure bill’s impact on CRE was the focus of a discussion published Sept. 15 in The Real Deal, featuring Roundtable Chair John Fish (Chairman and CEO, Suffolk) and Roundtable President and CEO Jeffrey DeBoer. 
  • Fish stated in the article, “At the end of the day, these are investments that the government is going to be sponsoring, that creates economic activity, job creation, and a sense of equality across our communities of America.”
  • DeBoer commented, “We think it’s very important and very much needed, long overdue. I think everyone agrees that what is needed immediately is to work on our infrastructure, repairing roads, bridges, inter-city rail, broadband, water systems, and all of these things are definitely needed.” (The Real Deal, Sept. 15)
  • The Real Estate Roundtable also held an all-member Town Hall discussion this afternoon to address specific measures in the House’s human infrastructure bill, including its tax policy aspects. The event featured The Roundtable’s John Fish, Jeffrey DeBoer and Senior Vice President & Counsel Ryan McCormick. 
  • A coalition of 13 real estate trade organizations, including The Roundtable, yesterday 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) 

The many policy issues now in play for CRE will be the focus of discussions during The Roundtable’s Fall Meeting on Oct. 5 in Washington, DC (Roundtable-level members only). 

#  #  # 

Congress Faces Daunting Fall Agenda of Infrastructure Bills, Budget Funding and Debt Limit Deadlines

Posted on by Trey Jackson

red lines to Capitol

Several significant issues affecting commercial real estate converge this month as Congress faces deadlines on a $550 billion “physical” infrastructure bill, a separate $3.5 trillion “social” infrastructure package, government funding for FY2022, and the national debt ceiling.  

The full Senate will return on Sept. 13 and the House on Sept. 20. Deadlines to watch as policymakers face a daunting agenda: 

Sept. 15 — Reconciliation Bills Expected 

  • House committees this week began work on completing various portions of the massive social infrastructure package – including tax revenue raisers impacting CRE – by a Sept. 15 deadline set by House Speaker Nancy Pelosi (D-CA). The $3.5 trillion package will be considered under “reconciliation” budget rules that would only require Democratic votes to pass. (The Hill, Sept. 9 and Roundtable Weekly tax story below)
     
  • Senate Majority Leader Chuck Schumer (D-NY) has instructed his committees to finalize their parts of the upper chamber’s reconciliation bill by Sept. 15 – although this deadline is non-binding and expected to slip. (CNBC, Aug. 11)
     
  • Sen. Joe Manchin (D-WV) wrote in a Sept. 2 Wall Street Journal op-ed that Congress should take a “strategic pause” on the reconciliation package. In a 50-50 Senate, the votes of moderate Democrats such as Manchin and Krysten Sinema (D-AZ) are crucial for passage. 

Sept. 27 — House infrastructure Vote 

House of Reps vote

  • The Senate on Aug. 10 passed a bipartisan bill addressing physical infrastructure with $550 billion in new spending. (Roundtable Weekly, Aug. 13) 
  • Pelosi has set a Sept. 27 deadline for the House to vote on the Senate-passed bill. Pelosi’s move accommodated a group of 10 moderates in her caucus who insisted on de-coupling House votes on physical and human infrastructure legislation. (Roundtable Weekly, Aug. 20)
     
  • Pelosi can afford to lose only three Democratic votes in the narrowly divided House if all Republicans oppose a bill. (New York Times, Sept 5)
     
  • The Real Estate Roundtable held an all-member Infrastructure Town Hall on Aug. 12 to discuss the Senate infrastructure bill, what lay ahead in the House, and the potential impact on commercial real estate. (Roundtable Weekly, Aug. 13)   

October – Federal Government Funding and Debt Ceiling 

Treasury logo on flag background

 

  • Funding for the federal government expires Oct. 1 unless an FY22 appropriations bill is enacted. Congress is expected to pass a stopgap spending bill – known as a Continuing Resolution (CR) – that would fund agencies at current levels to avoid a partial government shutdown. 
  • The CR could also include a measure to suspend or raise the national debt ceiling, which would require at least 10 Senate Republican votes to pass under regular order. 
  • Democratic leaders plan to pursue a bipartisan vote to waive the debt limit. (Reuters and PoliticoPro, Sept. 8) However, 46 Senate Republicans pledged in an August 10 letter that they “will not vote to increase the debt ceiling, whether that increase comes through a stand-alone bill, a continuing resolution, or any other vehicle.” (Bloomberg and The Wall Street Journal, Aug. 10) 
  • Congress must address the national debt ceiling by October, according to a Sept. 8 letter from Treasury Secretary Janet Yellen to congressional leaders. 

The Roundtable will discuss how all these issues impact CRE and the national economy during its Fall Meeting on Oct. 5 in Washington, DC (Roundtable-level members only). 

#  #  # 

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 Scheduled to Vote Next Week on Rule to Advance both “Physical” and “Human” Infrastructure Packages

Posted on by Trey Jackson

US Capitol view up

The House of Representatives will briefly return to Washington the week of Aug. 23 to vote on measures affecting the future of President Biden’s sweeping infrastructure agenda. (New York Times, Aug. 17) 

Two-Track Approach

  • A group of nine moderate Democrats led by Rep. Josh Gottheimer (D-NJ) informed House leadership on Aug. 12 that they will not support a $3.5 trillion budget resolution encompassing “human” infrastructure initiatives unless the bipartisan “physical” infrastructure bill passed by the Senate last week is approved by the House and enacted. (Bloomberg, Aug. 17 and Roundtable Weekly, Aug. 13)

  • The moderates’ letter to House Speaker Nancy Pelosi (D-CA) stated, “Some have suggested that we hold off on considering the Senate infrastructure bill for months – until the (budget) reconciliation process is completed. We disagree. We will not consider voting for a budget resolution until the bipartisan Infrastructure Investment and Jobs Act passes the House and is signed into law.” (Politico, Aug. 13)
  • Progressive House Democrats countered with the opposite approach, stating that they will not support the bipartisan infrastructure plan unless it is tied to the massive budget reconciliation measure, which addresses child care, health care and climate change. (Axios, Aug. 18)
  • Pelosi this week reiterated her two-track plan to advance both measures in the House despite having just a three-vote margin majority. Republicans are expected to oppose the sprawling “human” infrastructure budget resolution. (BGov, Aug. 18) 

CRE Impact 

image - Roundtable President and CEO Jeffrey DeBoer


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.

  •  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), Roundtable President and CEO Jeffrey DeBoer, and other Roundtable staff for the Town Hall discussion.  (Roundtable Weekly,  Aug. 13 and The Roundtable’s  Bipartisan Infrastructure Deal Fact Sheet and Tax and Fiscal Reconciliation Fact Sheet)  
  • DeBoer, above, 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

image - House floor debate

  • Pelosi and House Majority Leader Steny Hoyer (D-MD) laid out a schedule for votes next Monday and Tuesday.
  • The House is scheduled to vote Aug. 23 on a rule that governs floor debate on the $3.5 trillion budget resolution (S Con Res 14), the $550 bipartisan infrastructure bill (HR 3684) and a voting rights bill (HR 4). The chamber is then expected to vote Tuesday on the “human” infrastructure framework and the popular voting rights bill. (CQ, Aug. 16)
  • Approval of the budget resolution would allow the development of legislation to move forward that could pass later this year under “reconciliation” rules without any Republican support. The Senate voted last week to advance the same measure. (Roundtable Weekly, Aug. 13)
  • White House spokesman Andrew Bates this week told Bloomberg, “All three are critical elements of the President’s agenda, and we hope that every Democratic member supports this effort to advance these important legislative actions.” (Bloomberg, Aug. 17) 

Pelosi sent a note to her caucus this week, warning that any delay next week  “jeopardizes the once-in-a-generation opportunity” to enact Biden’s broader legislative priorities. (Politico, Aug. 17) 

#  #  # 

Senate Democrats Pass Budget Resolution that Would Authorize $3.5 trillion “Human Infrastructure” Bill with Large Tax Increases

Posted on by Trey Jackson

DC monuments night

Senate Democrats voted August 11 to advance a $3.5 trillion “human infrastructure” budget resolution, which allows development of legislation that could pass later this year without any Republican support. The budget blueprint passed on a party-line vote of 50-49 the day after the Senate passed a $1.2 trillion “physical infrastructure” bill on a bipartisan basis. (BGov, Aug 11 and Roundtable Weekly, story above) 

Why It Matters 

  • The Senate budget resolution supports President Biden’s wide-ranging domestic priorities that aim to expand the federal social safety net and combat climate change. (New York Times and The Hill, Aug. 11)
  • The sprawling human infrastructure proposal would be partially financed by raising taxes on corporations and wealthy individuals – and potentially include a variety of tax increases affecting commercial real estate.
  • The Senate measure also provided instructions for various committees to craft bills under “reconciliation” budget rules. If approved by the Senate Parliamentarian, the committees’ work would be combined into final legislation that could pass on a majority vote, thereby bypassing a Republican filibuster. (Senate Democratic Memorandum, Aug. 9)
  • The House announced this week that it will return early from summer recess on Aug. 23 to consider the budget resolution. (Associated Press and CQ, Aug. 11)
  • House Speaker Nancy Pelosi (D-CA) reiterated on Aug. 11 that until the Senate finishes and passes the massive reconciliation bill, the House will not vote on the physical infrastructure legislation. Other Members of the Democratic Caucus, including Rep. Josh Gottheimer (D-NJ), co-chair of the bipartisan Problem Solvers Caucus, have called on Congressional Leaders to decouple the measures and send the bipartisan infrastructure bill to the President without delay. (Politico, Aug. 11 and The Hill, Aug. 11) 

Taxes & CRE  

Philadelphia, PA skyline

Roundtable President and CEO Jeffrey DeBoer commented on the Senate’s $3.5 trillion reconciliation bill and the tax proposals under consideration.  

  • DeBoer on Aug 11 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)
  • The Roundtable this week produced a summary of budget reconciliation tax issues that could directly impact commercial real estate, including: 
    • Like-Kind Exchanges
    • Capital Gains
    • Pass-through Business Income
    • Step-up in Basis and Taxation of Gains at Death
    • Carried Interest
    • Energy Efficiency Incentives
    • Affordable Housing Incentives 

Roundtable Infrastructure Town Hall 

Roundtable Infrastructure Town Hall - image capture

  • The Roundtable held an all-member Infrastructure Town Hall on Aug. 12 to discuss the Senate reconciliation measure and what it means for commercial real estate. Rep. Tom Suozzi (D-NY), a member of the tax-writing House Ways and Means Committee, center in photo,  joined Roundtable Chair John Fish, top right, Jeffrey DeBoer, top left, and other Roundtable staff for the Town Hall discussion.

The congressional debate on infrastructure is expected to extend into the fall, when policymakers face multiple other deadlines that converge on Sept. 30 – government funding for FY2022, reauthorization of funding for surface transportation programs, and reauthorization of the National Flood Insurance Program. The Roundtable is scheduled to discuss all these issues at its Fall Meeting on Oct. 5 in Washington, DC (Roundtable-level members only). 

#  #  #

Senate Passes Historic Bipartisan Infrastructure Legislation

Posted on by Trey Jackson

Senate Infrastructure Vote Total
The Senate on Aug. 10 passed a historic, bipartisan $1 trillion+ infrastructure bill that would allocate $550 billion in new spending to improve the nation’s transit, utilities and broadband. The Infrastructure Investment and Jobs Act (H.R. 3684) was approved 69-30, with support from all Democrats and 19 Republican Senators, including Minority Leader Mitch McConnell (R-KY). (Wall Street Journal and New York Times, Aug. 10)   

Why it Matters 

  • Real Estate Roundtable Chair John Fish (Chairman and CEO, Suffolk) on Aug. 11 commented, “With the Senate’s passage of this bill, we are one step closer to realizing a once-in-a-generation opportunity to rebuild and reimagine the buildings of tomorrow. We applaud both this historic investment in our nation’s infrastructure, and the members of Congress who have reached across the aisle to find common ground.”
  • Real Estate Roundtable President Jeff DeBoer added, “By devoting more than a trillion dollars toward American infrastructure projects, this long-term investment in the nation’s roads, bridges, mass transit, high-speed rail, broadband, power grid, water pipes, and electric vehicle charging will prompt positive, transformational change for our communities and citizens.” (Roundtable statement, Aug 11)
  • The Roundtable held an all-member Infrastructure Town Hall on Aug. 12 to discuss the Senate bill, its prospects in the House and what it means for commercial real estate. Rep. Tom Suozzi (D-NY), a member of the tax-writing House Ways and Means Committee, joined Roundtable Chair John Fish, Jeffrey DeBoer and other Roundtable staff for the Town Hall discussion. (See Tax Policy story below and  The Roundtable’s Bipartisan Infrastructure Deal Fact Sheet)
  • Roundtable policy specialists also briefed members of the CREW (Commercial Real Estate Women) Network on Aug. 11 about how the infrastructure legislation could potentially impact CRE.  

BID Details 

Roundtable Infrastructure Senate Bill Summary August 5, 2021

  • The 2,700-page Senate bill evolved from bullet points to legislation after a painstaking journey of more than a month by a group of bipartisan senators who negotiated with the Biden Administration. (Politico and Senate Group Joint Statement, Aug. 10)
  • President Biden remarked about the Senate bill, “Forecasters on Wall Street project that over the next 10 years our economy will expand by trillions of dollars, and [the legislation] will create an additional 2 million jobs.” (White House Remarks, Aug. 10)
  • The amounts that would be invested by the “Bipartisan Infrastructure Deal” (BID) to various infrastructure categories are listed in White House summaries and The Roundtable’s BID Fact Sheet. 
  • The BID seeks no tax increases on families or businesses as “pay-fors.”
  • The Senate bill includes Roundtable-supported measures that will utilize public-private partnerships to reach ‘physical’ infrastructure goals, streamline the federal permitting process, and improve key federal energy data used in EPA building labels.

What’s Next 

U.S. Capitol dome interior

  • The Senate’s “physical” infrastructure package now goes to the House.
  • House Speaker Nancy Pelosi (D-CA) has insisted that she will not bring up the Senate’s “physical” infrastructure bill until the Senate also passes a sprawling $3.5 trillion “human” infrastructure bill with funding for climate programs, health care, education and child care.  (New York Times, Aug. 10). 

Majority Leader Steny Hoyer (D-MD) announced the House will interrupt its summer recess and return to session on Aug. 23 to consider the Senate-passed budget resolution that Democrats have insisted is a precursor to votes on the bipartisan infrastructure deal. (NBC News, Aug. 10) (See “reconciliation” story below) 

#  #  #