White House Requests Billions for Ukraine and Pandemic Response as Congress Rushes to Pass Omnibus Funding
Congressional appropriators received an emergency request yesterday from the White House for an additional $10 billion for Ukraine assistance and $22.5 billion for pandemic response funding. The request may complicate lawmakers’ efforts to pass an “omnibus” spending package by March 11, when current government funding expires. (Punchbowl News, March 3)
- Congressional appropriators may release the text of an omni bill within days, as House Democrats hope to pass a potential $1.5 trillion spending package early next week for the Senate to consider before the March 11 funding deadline. (Politico, March 3)
- A deal on an omni package would fund the government though Sept. 30, consolidate 12 separate spending bills and release additional funds for infrastructure. (Tax Notes, Feb. 18 and Roundtable Weekly, Feb. 11)
- Reauthorization and reform of the EB-5 visa investment program is one of the many issues being negotiated for possible inclusion in the omni funding bill.
- If efforts to pass an omnibus deal fail, Congress could pass yet another Continuing Resolution to fund the government at current levels – while considering separate bills to fund aid for Ukraine or the U.S. response to COVID-19.
SOTU & Climate Measures
- Yesterday’s White House emergency request comes after President Joe Biden’s March 1 State of the Union address, where he sought to rebrand the multitrillion Build Back Better (BBB) spending package into a pared-down proposal called “Building a Better America.” (BGov, March 2)
- The moribund BBB legislation stalled at $1.7 trillion, which included $555 billion in climate-related incentives. (Roundtable Weekly, Jan. 21)
- President Biden’s address on Tuesday also touched on climate measures such as tax credits for electric vehicles, energy efficiency improvements, and clean energy production. (White House Fact Sheets on Clean Energy and Infrastructure, Feb. 28)
- “Let’s provide investment tax credits to weatherize your home and your business to be energy efficient and get a tax credit for it; double America’s clean energy production in solar, wind, and so much more,” Biden stated.
- The Real Estate Roundtable on Nov. 16, 2021 supported the BBB Act’s climate measures in a letter to congressional tax writers. The letter also detailed five Roundtable recommendations aimed at improving certain green energy tax provisions affecting real estate. (Roundtable letter, Nov. 16)
Key Senate Votes
- Key Sen. Joe Manchin (D-WV), right, chair of the Senate Energy and Natural Resources Committee, has signaled his support for climate measures in a revised BBB package. (Roundtable Weekly, Feb. 18)
- Manchin on Wednesday responded to the State of the Union, saying he could support a smaller spending package that would split revenue between deficit reduction and new spending. Manchin said, “If you do that, the revenue producing [measures] would be taxes and [prescription] drugs. The spending is going to be climate.” (Politico, March 2 and E&E News, March 3)
- However, another key vote in the 50-50 upper chamber – Sen. Kyrsten Sinema (D-AZ), left – has voiced opposition to raising taxes. (BGov, March 2)
As Congress continues to work on the current fiscal year budget, President Biden will release a non-binding budget for the 2023 fiscal year that will outline his administration’s major economic, tax and climate policy priorities. The Treasury Department will also release its “Greenbook,” which will detail proposed tax cuts and revenue raisers that could fund the White House’s budget initiatives.
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Roundtable Recognized as Energy Department “Ally” in Better Climate Challenge
The U.S. Department of Energy (DOE) recognized The Real Estate Roundtable this week as an inaugural “ally” of the Better Climate Challenge (BCC), a voluntary program to encourage private and government owners of buildings and industrial plants to cut their GHG emissions in half. (Climate Challenge Factsheet | FAQs | BCC Launch video, Feb. 28)
Better Climate Challenge & CRE
- “The Real Estate Roundtable is proud to partner with the Department of Energy as an ‘ally’ in the Better Climate Challenge,“ said Roundtable Chair John Fish, above, (Chairman and CEO, Suffolk). “As leaders in the CRE industry, our members welcome opportunities to innovate with DOE and other federal agencies to reimagine how our nation’s buildings can optimize efficiency, slash GHG emissions, and draw electricity from a cleaner grid.
- “Partnerships with DOE offer significant opportunities to focus on retrofitting older buildings,” Fish continued. “Seventy-five percent of U.S. buildings were constructed in the last century. The greatest and most positive impact our industry can have on the climate crisis is to make smart investments that modernize the apartments, office buildings, and other structures where our communities live, work, learn, and socialize.”
- The BCC to date has received commitments from more than 90 organizations from various industries, including six companies represented by Roundtable members – Empire State Realty Trust, Hilton, Jamestown LP, LaSalle Investment Management, Lendlease, and MetLife Investment Management.
- Other real estate industry trade groups who are designated “allies” of the BCC include the Building Owners and Managers Association International (BOMA) and the American Hotel & Lodging Association (AHLA).
- DOE Secretary Granholm, top left, officially launched the BCC on Feb. 28 during an executive discussion with White House National Climate Advisor Gina McCarthy, middle left, Housing and Urban Development Secretary Marcia Fudge and committed partner organizations.
- The key element of DOE’s voluntary challenge is for companies to commit to reduce direct emissions (“scope 1”), and emissions from electricity purchases (“scope 2”), by 50% over 10 years. There is no requirement to quantify or reduce indirect “scope 3” emissions.
- The 10-year window is measured from a baseline of up to five years before a company joins the program.
- Commitments to reduce emissions must be across a building portfolio. DOE explained that to reach the 50% emissions reduction target, companies can tally their long-term clean power purchase agreements (PPA) and associated renewable energy certificates (RECs). PPAs and RECs are increasingly common strategies used by CRE and other sectors to help deliver more renewable energy to the electricity grid. (Roundtable Weekly, November 5, 2021)
- Participating companies must also pursue an efficiency target, to prioritize energy savings that will contribute toward the 50% reduction in portfolio-wide emissions over a decade.
- Companies joining the program must pledge to share energy and emissions data for 10 years through EPA’s Portfolio Manager, publicly report on progress, participate in peer-to-peer exchanges, and help develop industry best practices.
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Russian Aggression Raises Cybersecurity Concerns for CRE
Russian aggression against Ukraine has included cyberattacks that could potentially spillover to U.S. networks that serve commercial real estate. (GlobeSt, March 2)
Spillover or Direct Threats
- Since the imposition of American sanctions, direct Russian retaliation to U.S. networks could include malware, supply chain disruption and cyberattacks on critical infrastructure. (The Hill, March 3)
- Senate Intelligence Committee Chairman Mark Warner (D-VA) recently told Axios that Russian cyber weapons inside Ukraine could spread to NATO member states. In 2017, Russia's NotPetya malware was unleashed in Ukraine, causing billions of dollars in damage to companies worldwide. (Axios, Feb. 23)
- "If you're suddenly having 190,000 troops attack Ukraine, chances are that the cyberattack will not be a single piece of malware," Warner told Axios. "The chances of that staying within the Ukrainian geographic border is quite small. It could spread to America, could spread to the U.K., but the more likely effect will be spreading to adjacent geographic territory [such as] Poland.” (Axios, Feb. 23)
- GlobeSt on March 2 addressed potential cyber threats to CRE. “The largest vulnerabilities for real estate companies are systems such as HVAC, elevators, lighting, metering, parking, and physical access control,” according to Tom Shircliff of Intelligent Buildings.
- Homeland Security Today also reported in January about a cyberattack on a German engineering firm’s building automation system that locked the owners out of the system and rendered three-quarters of several hundred devices in the building nonoperational.
- The CRE industry has responded to emerging cyber threats through the Real Estate Information Sharing and Analysis Center (RE-ISAC) – a public-private information sharing partnership organized and managed by The Real Estate Roundtable since 2003.
- The RE-ISAC sends a Daily Report to members to raise awareness on cyber threats and other concerns affecting the U.S. commercial facilities sector, while sharing guidance from the Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency (CISA) and other agencies. See CISA’s online resources on Russian cyber threats.
- The RE-ISAC has also worked with InfraGard National Capital Region (InfraGardNCR) to establish the Commercial Facilities Cyber Working Group (CCWG), a virtual effort to share cyber threat intelligence. The group shares threat reports, ransomware victim examples, and other information on a regular basis.
- RE-ISAC Managing Director Andy Jabbour interviewed James Whalen, Boston Properties’ SVP, Chief Information & Technology Officer on the steps commercial real estate companies are takings to meet cybersecurity threats. (Gate 15, March 23, 2021 and Blended Threats: Holding Buildings Hostage)
This week, the FBI recommended organizations take the following steps:
- Review recent cybersecurity advisories, such as the Department of Homeland Security’s recent “Shields Up” warning that urged “all organizations – regardless of size – adopt a heightened posture when it comes to cybersecurity and protecting their most critical assets.” (TechCrunch, March 2)
- Know your networks; especially if you have even a tangential relationship with Russia and surrounding countries.
- Know your Cyber Incident Response plan. If you don’t have one, you should. Make sure the FBI and info sharing are embedded in that plan. Lower your thresholds for reporting.
- Report mis, dis, mal information, a tried-and-true tactic of the Russian government, including on your social media.
- In the event of a compromise, call the FBI.
The Real Estate Roundtable’s Homeland Security Task Force continues to work with key law enforcement, intelligence agencies and the RE-ISAC on protective measures that businesses can take to create infrastructure resistant to physical damage and cyber breaches. (Information on joining the RE-ISAC)
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