Tag: Policy Landscape

Congressional Republicans Pass Budget Resolution, Move One Step Closer to a Final Tax Bill 

Posted on by abigail_grenadier

This week, House Republicans approved a major budget framework that moves President Trump’s tax and spending agenda closer to the finish line and set the stage for Congressional Committees to “mark up” the key details in May—including tax cuts, revenue raising provisions, and spending reductions.  

State of Play

  • Despite tight margins, on Thursday House Speaker Mike Johnson (R-LA) was able to corral his caucus into passing a new budget resolution that was approved by the Senate over the prior weekend, bringing the president’s goal of “one big beautiful bill” closer to fruition. (WSJ, April 10)
  • Senate Republicans adopted a budget resolution on Saturday morning after an all-night voting marathon. Senate Republicans unveiled their 70-page budget blueprint last Wednesday.  It lays out a fiscal framework for implementing Trump’s border security, defense, energy and tax priorities. (CBS News, April 9)
  • The budget outline punts many of the hard decisions for lawmakers to hammer out later in the tax-cut negotiations. That could lead to a standoff between the House and Senate at the end of the process, where several Senators are resistant to large cuts in safety-net programs while House conservatives are seeking significant deficit reduction. (Bloomberg, April 10)

Next Steps and Implications for CRE

  • Lawmakers in the House and Senate now turn their attention to “marking up” their respective Committee instructions, as provided in the budget resolution.  The House and Senate instructions do not align, so their differences will have to be resolved later in the process.
  • The budget resolution allows the House Ways and Means Committee to pass a tax cut of up to $4.5 trillion, using a current law budget baseline.   The resolution allows the Senate Finance Committee to pass a $1.5 trillion tax cut, but assumes a current policy baseline in the Senate.  The practical effect of the current policy baseline is to increase the size of the Senate tax cut to $5.3 trillion.

  • On the spending side, the budget resolution directs the House Committees to identify at least $1.5 trillion in spending cuts.  The spending reductions for the Senate Committees are de minimis ($4 billion spread across four committees).
  • Besides tax cuts and spending reductions, the resolution calls for increased spending on the military ($150 billion), along with another $175 billion for border security and immigration enforcement work. (Politico, April 10)
  • The debt limit fight will also shape the legislative timeline. House and Senate Republicans have different reconciliation instructions for increasing the nation’s borrowing authority. (Punchbowl News, April 11)
  • Through meetings, outreach, and aggressive advocacy efforts, The Roundtable and the real estate industry continue to urge lawmakers to reject a revenue proposal to limit the deductibility of state and local business-related property taxes as part of the tax bill.  The proposal could have a devastating impact on property values, rents, the health of the financial system, local communities, and consumer prices.
  • In addition, members in both chambers continue to raise concerns about repealing clean energy tax credits from the Inflation Reduction Act (IRA) as part of the upcoming budget reconciliation bill. This week, four senators sent a letter to Senate Republican Leader John Thune warning that a full repeal would undermine investment, hurt businesses, and threaten jobs. (Punchbowl News, April 11) (RW, March 14)
  • At our Spring Roundtable Meeting, House Ways and Means Chairman Jason Smith (R-MO) engaged with RER members, acknowledging their concerns about proposals to change the treatment of business SALT and carried interest. He emphasized the importance of using data to inform policy discussions and commended RER for its impactful work educating policymakers on the issues.

As the budget process enters its next phase, RER will continue to advocate for key real estate priorities and inform members on policy updates from Capitol Hill and their impact on the industry. 

Senate Budget Deal Advances with Trump Support, Tax Policy in Focus

Posted on by Trey Jackson

This week saw a major announcement from President Trump on sweeping new tariffs and movement in Congress as the Senate advances a compromise budget resolution, with big implications for tax and spending cuts.

Budget Resolution Moves Forward

  • During his tariff announcement, President Trump announced his “complete and total support” for a compromise budget resolution released on Wednesday. The statement came after Senate Budget Committee Chair Lindsey Graham (R-SC) unveiled the updated resolution, paving the way for a vote later this week. (Punchbowl News, April 3)

  • Trump’s public support for the budget resolution was the result of behind-the-scenes negotiations with Senate leadership to move the reconciliation process forward.
  • Senate Majority Leader John Thune (R-SD) and others in the administration brought the meeting together to alleviate the concerns of skeptical deficit hawks who believed the Senate’s budget resolution didn’t do enough to cut spending. (Punchbowl News, April 3)

  • After receiving assurances from Trump about his support for large-scale deficit reductions, Senators John Kennedy (R-LA) and Ron Johnson (R-WI) seemed to get on board with the compromise budget resolution. With key holdouts resolved, Majority Leader Thune appears to have the votes needed to get the resolution adopted. (CNN, April 2)

  • The budget resolution includes separate spending cut instructions for the House and Senate. While House committees are instructed to find $1.5 trillion in spending cuts, the Senate instructions only call for $4 billion. Senate GOP leaders indicate that they still plan to target $1.5 to $2 trillion in spending cuts, giving them greater flexibility but punting lingering issues down the road. (Politico, April 3)

  • A “vote-a-rama” on the budget resolution is expected to begin Friday evening, with final adoption anticipated early Saturday. (Politico, April 2)

Tax Policy Implications

  • The compromise budget resolution incorporates a “current policy baseline” approach that allows the 2017 tax cuts to be permanently extended without needing to offset roughly $4 trillion in costs.

  • The Senate version also authorizes $1.5 trillion in additional tax relief beyond making the tax cuts permanent, allowing tax writers to include other key provisions that business advocates are asking for.

  • The current policy baseline was another sticking point in the Senate resolution that has been punted to later in the process. Senate GOP leadership has opted to assert that the Budget Committee Chair has the authority to choose the baseline used in reconciliation. (Axios, April 1)

  • While this decision allows the compromise budget resolution to move forward, the parliamentarian could still rule on the issue later on. If the parliamentarian rules against the current policy baseline, it would dramatically change the budget resolution landscape and potentially force the GOP to enact a shorter-term extension of the 2017 tax cuts, rather than making them permanent.

  • The current policy baseline also has political implications. Responding to the Senate resolution, House Budget Committee Chair Jodey Arrington (R-TX) and other House tax writers expressed concern that the Senate budget resolution could add as much as $5.3 trillion to the debt. (Politico, April 2)

  • House Speaker Mike Johnson (R-LA) was more optimistic about the compromise budget resolution and the inclusion of the current policy baseline, saying, “We’re in the consensus-building business here… So we’ll have to socialize this with our members and see. Look, I think there’s a large number of House Republicans who expected that would be the final outcome… so it’s not a big surprise.” (Punchbowl News, April 3)

  • In a conversation with Punchbowl News this week, Chairman of the House Financial Services Committee French Hill (R-AR) emphasized that President Trump and House and Senate GOP leaders are united on the urgency to get the reconciliation package done.

  • Rep. Hill also strongly defended the current tax treatment of carried interest. “It’s not a loophole,” he said, calling it an “important component for long-term finance across the country” for many businesses, including commercial real estate, venture capital and energy. (Punchbowl News, April 3)

Looking Ahead
The coming weeks are a critical time for the administration and congressional leaders on key issues, including trade and tax policy. RER will continue to engage with policymakers to advocate for pro-growth policies that support investment, job creation and healthy real estate markets.

Lawmakers Navigate Action-Packed Week on Capitol Hill

Posted on by Trey Jackson

Contentious policy discussions surrounding the economy, immigration and government spending continued this week in Washington as lawmakers work towards an agreement on a federal spending bill.

State of Play

  • The House narrowly approved a continuing resolution (CR), on March 11 to keep the government funded through September. Speaker of the House Mike Johnson (R-LA) managed to largely keep his GOP conference united, passing the measure days ahead of a possible government shutdown. (CBS News, March 11)
  • To prevent a shutdown, the Senate must approve a measure before the current funding expires on Friday night. Republicans will require support from at least seven Democrats to reach the 60-vote threshold necessary to overcome a filibuster. (Financial Times, March 12)
  • Senate Minority Leader Chuck Schumer (D-NY), told his caucus privately on  Thursday, and later in a floor speech, that he would vote to advance a GOP-written stopgap to fund the government through September. While he described the Republican spending bill as “very bad,” he emphasized that the “consequences of a shutdown for America would be far worse.” (Politico, March 13)

National Flood Insurance Program (NFIP)

  • Included in the CR package, is the extension of The National Flood Insurance Program (NFIP).
  • If enacted, this will be Congress’s 32nd  short-term extensions of the NFIP. The Roundtable has been a long-standing supporter of a long-term reauthorization of the NFIP with appropriate reforms.
  • A long-term reform and reauthorization of the NFIP is essential for residential markets, overall natural catastrophe insurance market capacity, and the broader economy.

  • RER, along with its industry partners, will continue advocating for targeted policy solutions that can help alleviate increased insurance costs for housing providers nationwide. (Roundtable Weekly, Feb. 28)

Inflation Reduction Act

  • As Congressional Republicans look to offset trillions of dollars in proposed tax cuts in their budget bill, Biden-era provisions from the Inflation Reduction Act (IRA) have sparked debate. (Politico, March 10; Brookings, Jan. 6)
  • This week, a group of 21 House Republicans led by Rep. Andrew Garabino (R-NY), whose districts have benefited from billions in new investments due to IRA incentives, argued that energy tax credits and provisions for manufacturers and builders are essential in achieving President Trump’s goal for the U.S. to be “energy dominant”. (Politico, March 10)
  • In a letter to President Trump, the group asserted that eliminating certain credits could mean “drastically higher power bills for American families” and emphasized that “many credits were enacted over the course of a 10-year period, which allowed energy developers to plan with these tax incentives in mind.” (Reuters, March 11)

Immigration – Gold Card Proposal

  • On March 11, RER sent a letter to Commerce Secretary Howard Lutnick, expressing support for the “Gold Card” proposal. This concept aims to bolster U.S. economic growth, address the national deficit, and strengthen America’s competitive edge in the global marketplace.
  • The letter reiterated support for the existing EB-5 program, which allows foreign investors to obtain a green card by making substantial investments that result in jobs for American workers and funding for large-scale developments.
  • As RER’s letter emphasized, pairing the “Gold Card” program with the EB-5 framework offers a powerful, dual-track approach that will reform America’s visa system, attract top global talent, and drive foreign investment into strategic, job-creating projects. (Letter, March 11)

  • During a meeting with GOP Senators this week, President Trump discussed his “Gold Card” Program as a revenue source to address the national deficit.

Federal Workforce Cuts and GSA Leasing

  • Federal agencies faced a Thursday deadline to submit initial plans for sweeping workforce cuts and reorganizations, following President Trump’s directive for “large-scale reductions in force,” with a second round of plans due in April. (Politico, March 12)
  • The “Phase 1” agency cut plans due this week mark the first step in the Trump administration’s broader downsizing strategy, with “Phase 2” plans—detailing operational overhauls—due by April 14 and set for implementation by Sept. 30. (Politico, March 12)
  • A federal judge ordered the administration to rehire thousands of employees dismissed from six agencies, disputing the Trump administration’s justification for firing the probationary workers. (NYT, March 13)

  • RER will continue to track these developments and their potential implications for government leasing in Washington, D.C. and other major urban centers. (Roundtable Weekly, Feb. 7)

Both chambers are in recess next week and set to return to Washington on March 24.

Major Tax and Fiscal Package Gains Momentum as House Passes Budget Resolution

Posted on by Trey Jackson

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.

Senate Advances Narrow Budget Resolution as President Trump Endorses House “One Bill” Strategy

Posted on by Trey Jackson

After an all-night session of voting on amendments, the Senate passed a narrow budget resolution focused on border security, defense spending, and expanded energy production. 

Senate Passes Budget Resolution

  • The Senate vote, 52-48, came two days after President Trump expressed his preference for the House strategy of moving forward with “one big beautiful bill” that would include all of his agenda, including an extension of the 2017 tax cuts. (Reuters, Feb. 21)

  • After its passage, Senate Budget Committee Chairman Lindsey Graham (R-SC) said the Senate resolution would allow the Judiciary and Homeland Security Committees to spend up to $175 billion to implement the President’s border security agenda, increase defense spending by $150 billion, and facilitate energy independence through new on and offshore lease sales and ending the methane emissions fee. (Politico, Feb. 20)

Amendments Defeated

  • Although the Senate budget resolution does not include an extension of the 2017 tax cuts, Senate Democrats used the open amendment process to challenge Republicans on tax policy, offering several amendments calling on Senators to reject tax cuts for millionaires and billionaires. These amendments were defeated on party-line votes. (AP, Feb. 21)

  • Senator Mark Warner (D-VA) offered an amendment to create a point of order against any final budget reconciliation bill that does not decrease the cost of housing for American families. It was also defeated on a party-line vote. (WSJ, Feb. 21)

  • Senators Tammy Baldwin (D-WI) and Sheldon Whitehouse (D-RI) filed, but did not offer, an amendment aimed at putting Senators on the record in favor or against recharacterizing carried interest as ordinary income.

House and Senate’s Competing Plans

  • The House and Senate appear to be on a collision course.  Last week, the Senate Budget Committee passed, on a party-line vote, a much more ambitious budget resolution that includes $4.5 trillion in tax cuts and up to $2 trillion in spending reductions. (Reuters, Feb. 21)

  • The House approach received a major lift on Wednesday when President Trump posted that the House resolution “implements my FULL American First Agenda … not just parts of it,” and that “[w]e need both Chambers to pass the House Budget to ‘kickstart’ the Reconciliation process.” (Barrons, Feb. 19)

  • The House budget could be on the House floor as early as next week. Passage would allow the two chambers to resolve their differences in a conference committee, vote on the compromise budget, and then move to the next stage—committee action on actual legislation. (AP, Feb. 21)

Looking Ahead

RER will pay close attention to budget discussions coming from both chambers and their implications on crucial real estate policy issues. We will continue to advocate for pro-growth budget considerations in areas such as State and Local Tax (SALT) and carried interest. 

House GOP Unveils Fiscal Blueprint Calling for Trillions in Cuts to Taxes and Spending

Posted on by Trey Jackson

After weeks of discussions, the House GOP and Speaker Mike Johnson unveiled their long-term budget blueprint, which would allow congressional committees to move forward with trillions into tax cuts and spending reductions. However, negotiations to fund the government ahead of the March 14 deadline have stalled.

Committee Advances Budget Plan

  • The House Budget Committee voted late Thursday night 21-16 to advance their budget resolution, which authorizes up to $4.5 trillion in tax cuts and $2 trillion in spending cuts over the next decade. The fiscal blueprint also calls for $300 billion in new border and defense spending and a two-year extension of the debt ceiling. (Politico, Feb. 12)
  • While Speaker Mike Johnson hopes to bring the resolution to the floor later this month, there are a number of details to hammer out that could hinder its passage. Overcoming the GOP’s extremely narrow majority in the House (218-215) will be a challenge.
  • House Budget Republicans secured passage of their resolution along party lines after striking a deal with the Freedom Caucus to win over fiscal hardliners Reps. Ralph Norman (R-SC) and Chip Roy (R-TX). (Roll Call, Feb. 13)

  • An amendment from Vice Chair Lloyd Smucker (R-PA) cemented the agreement by linking the size of a future tax-cut package to spending reductions. Under the modified resolution, the amount of the tax cuts would be reduced if the legislation does not include the full $2 trillion in spending reductions.

Tax Negotiations

  • House Ways and Means Chair Jason Smith (R-MO) also faces a difficult road to extend key provisions in the 2017 Tax Cuts and Jobs Act (TCJA). The $4.5 trillion figure for tax cuts is not enough to permanently extend the TCJA and include President Trump’s other tax priorities. (Politico, Feb. 12)

  • How to come up with the spending cuts to fund a permanent TCJA extension and other priorities remains a fundamental question. The budget package is expected to include significant reductions in Medicaid, which provides health benefits to low-income families and individuals.  President Trump has expressed concern with those health care cuts. (Politico, Feb. 13)
  • Some estimates place the cost of the President’s additional tax priorities as high as $2 trillion. These include exempting tips, overtime pay, and Social Security benefits from tax. Tax-writers must also find a way to pay for any adjustments to the SALT limitation, which are widely understood as needed to secure Blue State Republican votes in the House. 
  • Tax-writers are expected to look for other tax offsets, raising concerns that they could target issues such as the deductibility of state and local property taxes paid by businesses.
  • Limits on the deductibility of property taxes would upend the federal income tax by denying a deduction for a basic cost of doing business. It would severely hurt property values, real estate markets, and the millions of Americans employed directly and indirectly by the real estate industry.
  • “Capping or eliminating the federal deduction for business property taxes would be a major policy misstep,” said Roundtable President and CEO Jeffrey DeBoer. “Property taxes are not optional—they are a fundamental cost of doing business.”
  • “This change would force businesses to pay federal tax on money they never actually receive, placing a heavy burden on real estate investment and development. The impact would be severe for property owners repositioning assets—such as converting office buildings into housing—where property taxes remain due even when rental income is disrupted. Losing this deduction would drive up operating costs, which would ultimately be passed to consumers through higher rents, and hindering economic growth at a time when we should be encouraging investment and revitalization,” said DeBoer.
  • House Republicans are also considering shorter extensions of the expiring tax cuts in a bid to fit them into the budget plan’s constraints.
  • However, in a letter released Thursday, Senate Republican leaders, including Majority Leader John Thune (R-SD), Finance Chair Mike Crapo (R-ID) and seven others, said they would not support a tax package that only provides temporary relief from tax hikes. They said that any extension of the provisions due to lapse at the end of this year “must” be permanent. (Politico, Feb. 13)
  • Meanwhile, congressional Democrats have attacked Republican’s tax and spending cuts as a “betrayal of the middle class,” though they have minimal power to stop the GOP’s budget plan if Republicans are able to align on a strategy. (Politico, Feb. 13)

Reconciliation

  • To avoid the Senate filibuster, the tax and spending cuts will require the House and Senate to pass identical budget resolutions as part of the reconciliation process—and the Senate is pursuing its own budget proposal. (Politico, Feb. 12)

  • On Wednesday, the Senate Budget Committee approved its own budget blueprint, which includes up to $345 billion in funding for border security, immigration enforcement and defense. However, the resolution punts on any sweeping tax and spending cuts. (Washington Times, Feb. 12)

  • Preferring a two-step strategy over the House Republican’s plan, Senate Budget Chair Lindsey Graham (R-SC) said, “To my colleagues in the House, I hope you can pass one, big beautiful bill.” “But we’ve got to move on this issue.” (Politico, Feb. 12)

  • The March 14 deadline to fund the government is fast approaching. House Appropriations Chair Tom Cole (R-OK) indicated that negotiations are ongoing, but with much activity and attention focused on budget resolutions, little progress has been made.
  • If congressional leaders are unable to extend government funding before the deadline, key programs like the National Flood Insurance Program (NFIP) could lapse. (Politico, Feb. 12)

Looking Ahead

While the Senate will be in session next week after President’s Day, the House is out of session until February 24. The Roundtable will continue to follow developments on tax and budget negotiations closely.

Tax Policy This Week in Washington: Carried Interest and Budget Talks

Posted on by Trey Jackson

As budget negotiations continued this week in the House and Senate, President Donald Trump met with Republican lawmakers on Thursday to discuss his tax priorities.

Tax Talks

  • White House Press Secretary Karoline Leavitt told reporters that during a Thursday meeting with Republican lawmakers, President Trump outlined his tax priorities, including closing the “carried interest tax deduction loophole,” along with other provisions he wants included in a sweeping tax bill this year. (Bloomberg, Feb. 6 | Axios, Feb.7)
  • President Trump also reiterated ideas he promoted on the campaign trail, including ending taxes on tips, overtime and Social Security payouts, as well as adjusting deductions for state and local taxes.
  • Appearing on Fox Business this week, Treasury Secretary Scott Bessent rejected the idea of a short-term extension of President Trump’s tax cuts, emphasizing they should be made permanent. (Fox Business, Feb. 5)

The Roundtable’s Position

  • Since carried interest and its tax treatment first emerged as a controversial political issue in 2007, The Roundtable has consistently opposed legislative proposals to tax all carried interest at ordinary income rates.
  • “The proposals would penalize entrepreneurs, slow housing production, and reduce economic mobility,” said Roundtable President and CEO Jeffrey DeBoer.  “The tax code has never, and should never, limit the reward for risk-taking only to deep-pocketed investors who have cash to deploy.” 
  • “Real estate partnerships of all sizes across the country, small and large, use carried interest.  It is not compensation for services, and it is not comparable to wages. Carried interest is granted for the value a general partner adds beyond routine services, and it is a recognition of the risks a general partner takes, such as funding predevelopment costs, guaranteeing construction budgets and financing, and exposure to potential litigation,” said DeBoer. 
  • Reversing well-established tax law and ending carried interest would raise little revenue. It would, however, reduce construction activity, especially higher-risk and much-needed projects like affordable housing, commercial developments in long-neglected neighborhoods, and the cleanup of contaminated land. 
  • “Today, construction costs are higher than ever and financing remains challenging.  Now is not the time to raise taxes on U.S. real estate,” said DeBoer. 

Senate Proposal

  • Senate Budget Chair Lindsey Graham (R-SC) announced today that his committee will convene Wednesday and Thursday to debate and vote on his budget resolution, setting the stage for a future vote on a bill focused solely on border security, defense, and energy. (Politico, Feb. 7)
  • Their decision comes ahead of a meeting with President Trump at Mar-a-Lago today, where they also plan to discuss budget reconciliation. (Politico, Feb. 5)
  • “This budget resolution jumpstarts a process that will give President Trump’s team the money they need to secure the border and deport criminals, and make America strong and more energy independent,” Graham said in a statement.
  • With a 53-seat majority, Senate Republicans have a bit more flexibility than the House, but still need to unite their party, as some members demand significant spending cuts.
  • Senate GOP leaders plan to revisit the extension of the TCJA 2017 tax cuts later this year through a second reconciliation package.

House Proposal

  • Several House Republicans met with President Trump on Thursday to resolve intraparty spending disputes. House Majority Leader Steve Scalise (R-LA) said the meeting was designed so House Republicans could “get in a place” where they could advance their stalled budget blueprint “next week.” (Politico, Feb. 7)
  • Speaker Mike Johnson had aimed to release a framework today but now says Republicans will be working all weekend to finalize it.

GOP leaders have warned members that full details won’t be available until Monday, and a topline spending agreement remains elusive.

This Week on Capitol Hill: Confirmation Hearings and Tax Policy Debates

Posted on by Trey Jackson

This week, the Senate conducted confirmation hearings for several of President-elect Donald Trump’s Cabinet nominees, providing critical insights into the nominees’ perspectives and potential policy directions on real estate, housing, the economy, and tax policy under the incoming administration.

Senate Confirmation Hearings

  • Scott Bessent – Nominee for Secretary of the Treasury: Treasury nominee Scott Bessent faced bipartisan scrutiny during his Senate Finance Committee confirmation hearing over tax policy, tariffs, and China on Thursday. (Axios, Jan 17)
  • He emphasized the importance of extending the 2017 Tax Cuts and Jobs Act, stating, “This is the single most important economic issue of the day.” (Roll Call, Jan. 16 | PoliticoPro, Jan. 16)
  • “We must make permanent the 2017 Tax Cuts and Jobs Act and implement new pro-growth policies to reduce the tax burden on American manufacturers service workers and seniors,” Bessent said in his testimony. He also praised the Opportunity Zones program as a “resounding success,” highlighting its potential to address housing challenges, promote inner-city redevelopment, and support rural growth. (Politico, Jan, 16)
  • He also called for spending cuts and shifts in existing taxes to offset the costs that extending the tax cuts would add to the federal deficit. (AP News, Jan. 16)
  • Lee Zeldin, nominee for EPA Administrator, Chris Wright, nominee for Energy Secretary, and Doug Burgum, nominee for Housing and Urban Development Secretary, also testified this week and are expected to be confirmed. (see Energy story below)
  • Sean Duffy – Nominee for Secretary of the Department of Transportation: Appearing before the Senate Commerce Committee, Duffy emphasized his commitment to safety and pledged to streamline regulatory processes that delay infrastructure projects. Promising to uphold the 2021 infrastructure law, he stated, “I commit to implementing the law,” and vowed to expedite funding distribution, addressing delays to ensure critical projects move forward efficiently. (Politico, Jan. 17)

Federal Housing Finance Agency (FHFA) Nominee

  • On Thursday, Trump announced he would nominate Bill Pulte for Director of the Federal Housing Finance Agency (FHFA). (HousingWire | Reuters Jan. 16)
  • If confirmed, Pulte would oversee Fannie Mae and Freddie Mac, the government-sponsored enterprises (GSEs) standing behind roughly half of the U.S. residential mortgage market.
  • The Trump administration is expected to pursue a plan to release Fannie and Freddie from government control. (GlobeSt., Jan. 17)
  • GOP lawmakers have raised the idea of including language to mandate Fannie and Freddie’s release in this year’s reconciliation package as a way to offset the cost of extending expiring tax cuts. (Politico, Jan. 16)

House Ways and Means Committee Hearing – TCJA

  • The tax debate kicked off Tuesday with the House Committee on Ways and Means’ first hearing on extending key provisions of the TCJA led by Chairman Jason Smith (R-MO). (Fox News, Jan. 14)
  • At the hearing, lawmakers discussed expiring provisions of the TCJA including the SALT deduction, Section 199-A, opportunity zones, and child tax credits.
  • Congress faces the dual challenge of addressing expiring tax provisions while managing fiscal pressures. While bipartisan cooperation is possible on certain issues like affordable housing, divisions over business tax rates, SALT deductions, and the debt ceiling could stall progress.

What’s Next: RER President & CEO Jeffrey DeBoer will be on Marcus & Millichap’s 2025 Economic & CRE Outlook webinar next Thursday, January 23. He will be joined by Mark Zandi and a panel of industry leaders discussing the macro environment and the potential policies of the new administration and key trends on jobs, the FED outlook, tax policy expectations and more. (Register)

Tax Policy 2025: Competing Strategies and CRE Priorities

Posted on by Trey Jackson

The Real Estate Roundtable (RER) is focused on advancing a tax code that encourages investment, supports economic growth, and ensures fair treatment for commercial real estate. With significant provisions of the 2017 Tax Cuts and Jobs Act (TCJA) set to expire, tax policy is already dominating early Congressional discussions.

Congressional Dynamics

  • The tax debate is set to kick off on Tuesday, Jan. 14, with the House Committee on Ways and Means’ first hearing on extending key provisions of the TCJA led by Chairman Jason Smith (R-MO).
  • Congress faces the dual challenge of addressing expiring tax provisions while managing fiscal pressures. While bipartisan cooperation is possible on certain issues like affordable housing, divisions over business tax rates, SALT deductions, and the debt ceiling could stall progress.
  • House Speaker Mike Johnson and top House leaders doubled down on their plan to bundle border, tax, and energy policies into a single bill. Meanwhile, Senate leaders are continuing with their two-bill approach, aiming for faster legislative wins for the new administration. (The Hill, Jan. 10)
  • The two chambers are effectively competing to see which strategy can deliver results more quickly.
  • Trump indicated he can live with either approach. “I like one, big, beautiful bill,” Trump said at a press conference on Tuesday. On Wednesday after meeting with Senate Republicans, he told reporters “Whether it’s one bill or two bills, it’s going to get done one way or the other. The end result is the same.” (Axios, Jan. 8 | The Hill, Jan. 8)
  • Speaker Johnson and Republicans are determined to pass their budget blueprint by the end of February. Johnson told reporters Thursday that he’s still working with the Senate to properly “sequence” the massive effort. (PoliticoPro, Jan. 9)
  • On Thursday, Senate Majority Leader John Thune refused to commit to the House’s preferred approach and called it an ongoing conversation. “Obviously we want to give the House as much space as possible,” he told reporters. “They believe they can move and execute on getting a bill across the finish line fairly quickly. But we are prepared to move here, as well.” (PoliticoPro, Jan. 9)
  • “We’re going to be having conversations with each chairman to make sure that the targets they’re given are achievable within their committee, and then ultimately get pulled back into budget reconciliation to give us the ability to do all the things you want to do,” House Majority Leader Steve Scalise told Punchbowl News. (Punchbowl News, Jan. 10)

Senate Bipartisan Outreach

  • Eleven moderate Senate Democrats, led by Sens. Catherine Cortez Masto (D-NV) and Mark Warner (D-VA) wrote to Republican leaders, offering to work with them on extending expiring tax cuts and raising the debt ceiling, proposing bipartisan reforms to balance tax policy and fiscal responsibility. (PoliticoPro, Jan. 10)
  • The letter stated the group was willing to cut spending, protect family-oriented tax policies, maintain competitive business tax rates, — and indicated that they could provide enough votes to allow Republicans to overcome a filibuster in the Senate without having to go through the reconciliation process.
  • While the GOP is unlikely to accept the offer amid internal divisions, the proposal highlights potential avenues for compromise on tax reform and debates ahead.

Roundtable Tax Priorities for 2025

RER encourages lawmakers to ensure that any major tax legislation in 2025 retain or include:

  • The reduced tax rate on capital gains. 
  • Tax fairness for partnerships and pass-through entities.
  • Safeguard like-kind exchanges.
  • Extend, improve, and enact smart tax policies to address the severe housing shortage.
  • Tax rules that encourage, rather than deter, foreign investment in U.S. real estate.

As negotiations and debates continue, RER remains committed to working with lawmakers to ensure the U.S. maintains a competitive tax code that encourages capital formation, rewards entrepreneurial risk-taking, and supports policy objectives, including accessible and affordable housing and safe and healthy communities.

Congress Faces Shutdown Threat Amid Funding Battles

Posted on by Trey Jackson

House Speaker Mike Johnson (R-LA) announced this afternoon that the House will vote tonight on a revised version of the bill that was defeated on Thursday, excluding the debt ceiling provision advocated by President-elect Trump. (Politico, Live updates)

Latest Funding Plan

  • On Thursday, Democrats and a group of Republicans rejected a second Continuing Resolution (CR) proposal in a decisive 174-235 vote, which fell short of the two-thirds majority needed under expedited rules.  (Axios, Dec. 20)
  • Elon Musk and President-elect Trump amplified tensions in Congress, urging Johnson to abandon the bipartisan agreement he reached with top Democrats in favor of a Republican-preferred measure earlier in the week. (AP, Dec. 20)
  • By rejecting the Trump-endorsed proposal, Democrats signaled they would not support legislation unless they were included in negotiations.

Roundtable Urges National Flood Insurance Program (NFIP) Extension

  • The Roundtable and 11 other organizations wrote to Congressional leadership urging swift action to extend the National Flood Insurance Program (NFIP) before its December 20 expiration. (NFIP Letter, Dec. 20)
  • The letter emphasized the urgency of passing the “NFIP Extension Act of 2024” in the event of a government funding lapse. This legislation, already introduced in both the House and Senate, would extend the NFIP through September 30, 2025, ensuring continuity and aligning the program with the end of the fiscal year.

Debt Ceiling

  • House Republican leaders unveiled a plan this afternoon to raise the debt ceiling by $1.5 trillion in early 2025, paired with $2.5 trillion in cuts to mandatory spending. (Politico, Dec. 20)
  • GOP leaders aim to use the reconciliation process next year to pass these measures with a simple majority vote in the Senate, bypassing the filibuster. The proposal directly challenges President-elect Donald Trump’s demands for immediate bipartisan action to raise the debt ceiling.
  • GOP leaders hope to leverage this budget tool to achieve major policy goals, such as increased border security and expiring tax cuts, but face challenges in rallying the slim majorities they will have in both chambers when the new Congress is sworn in. (Politico, Dec. 20)

What’s next: The GOP plan sets the stage for a contentious fiscal battle in 2025, as the party grapples with how to balance its policy priorities against the looming threat of economic fallout.