Policy Landscape

Election Results Usher In Uncertain Prospects for Pandemic Relief and Funding Omnibus

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Ballot counting in the presidential election continued for the fourth day this week as former Vice President Joe Biden made gains against President Trump in key battleground states. Control of the Senate balances on the results of undecided races in Alaska and North Carolina – and on both Senate seats in Georgia that will face run-off elections on Jan. 5.

  • The Real Estate Roundtable will hold a membership-only town hall discussion on Monday, Nov. 9 from 5-6pm EST to discuss the policy implications of the elections with Roundtable staff, elected leaders and special guests. 

  • Electoral uncertainty will influence Congress on its return to Washington next week for a “lame-duck session,” which will include consideration of a pandemic relief package and must-pass legislation to keep the government open past Dec. 11. (BGov, Nov. 6 and Roundtable Weekly, Oct. 30)

  • House Speaker Nancy Pelosi (D-CA) this morning called for Republicans to re-enter negotiations for COVID-19 relief as Senate Majority Leader Mitch McConnell on Wednesday said Congress should pass a new economic-relief package this year. (Politico and Wall Street Journal, Nov. 6)

  • McConnell said, “We need another rescue package. Hopefully the partisan passions that prevented us from doing another rescue package will subside with the election. We need to do it, and I think we need to do it before the end of the year.”

  • Senate Whip John Thune (R-SD), who is number 2 in the chamber’s leadership, said on Oct. 25 that if Democrats prevail in the presidential election, a smaller stimulus bill could be pursued in the lame-duck session, followed by another package in the new year. (BGov, Oct 27)

  • A major impediment in the negotiations over pandemic aid is cost, as the Trump administration has offered a ceiling of $1.8 trillion, House Democrats passed a $2.2 trillion bill, and Senate Republicans favored a $500 billion measure. (Wall Street Journal, Oct.9 / AP, Oct. 1 / USA Today, Oct 21)

  • The tension surrounding the presidential election results adds to the uncertainty about whether President Trump will negotiate and seek to influence a Senate GOP bill addressing COVID-19 relief during the lame-duck session.

  • White House economic adviser Larry Kudlow today said the administration remains open to negotiations.  “Sen. McConnell and for that matter President Trump, and [Treasury Secretary Steven Mnuchin] and I and the others ... we would like to negotiate a package. It would still be a targeted package to specific areas. We’re not interested in two or three trillion dollars,” Kudlow said. (CQ, Nov. 6)

Lawmakers during the lame-duck may choose to merge some COVID-19 aid measures into a sweeping multi-trillion-dollar omnibus bill to avoid a partial government shutdown on Dec. 11, when funding is set to expire.  Additionally, many temporary financial safety net programs are set to expire on Dec. 31. (Marketwatch, Oct. 21 and RollCall , Oct. 28)

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Capital and Credit

Fed Announces Limited Adjustments to Main Street Lending Program Terms

The Federal Reserve in Washington, DC

The Federal Reserve on Oct. 30 announced limited adjustments to the terms of its Main Street Lending Program (MSLP) facility in an attempt to support small and medium-sized businesses affected by the COVID-19 outbreak. (Fed news release

  • The MSLP has the capacity to issue up to $600 billion in loans, yet has only completed approximately 400 loans totaling $3.7 billion. (Washington Post, Oct, 30) 

  • With congressional negotiations over a pandemic relief package at an impasse, The Fed reduced the minimum loan size for three Main Street facilities from $250,000 to $100,000 and reduced fees to lenders who facilitate the loans. (Wall Street Journal and Roundtable Weekly, Oct. 30)

  • The Fed also issued a set of frequently asked questions to clarify that Paycheck Protection Program loans of up to $2 million may be excluded when determining the maximum MSLP loan size. (MSLP FAQs, Oct. 30)

  • Real Estate Roundtable and President Jeffrey DeBoer yesterday commented to CoStar, “The Main Street Lending Program won’t be energized by modest revisions. Banks need greater incentives to focus on the program, the borrower eligibility rules must be rethought, and the loan underwriting rules should better reflect the needs of troubled businesses. Without far deeper reforms to the program, its full potential assistance will continue to be untapped,” DeBoer stated. (CoStar, Nov. 5, “Modest Changes May Not Be Enough to Make Relief Effective, Head of Real Estate Industry Group Says”)

  • DeBoer testified about the MSLP on Sept. 9 before the Senate Banking, Housing and Urban Affairs Committee on how to improve access to Federal Reserve credit facilities for businesses such as manufacturing, retail, restaurants, real estate owners, and other asset-based borrowers. (Roundtable Weekly, Sept. 11)

  • DeBoer told the Committee, “The recommendations that I have made on the Main Street Lending Program … really require no additional funds from the federal government. They are administrative. They could be done tomorrow by the Treasury and the Fed if they wanted to.” (Roundtable Oral Comments and written statement / video of DeBoer's Testimony and Q&A with Senators)

  • Fed Chairman Jay Powell testified before Congress on Sept. 23 that the central bank has “done basically all of the things that we can think of.” Powell added, “There is nothing major that we see now that would be consistent with opening it (MSLP) up further.” (American Banker, Sept. 23)

  • Last month, The Fed released its Summary of Commentary on Current Economic Conditions, showing that “commercial real estate conditions continued to deteriorate in many Districts.” (The Fed’s Beige Book, Oct. 22)

  • The Fed lending programs backed by pandemic relief legislation are set to expire at the end of December.  Fed Chairman Powell and Treasury Secretary Steven Mnuchin must decide which programs to extend into 2021. (New York Times, Nov. 5) 

The Roundtable continues to urge regulators and lawmakers to develop specific MSLP changes to bolster small business tenants and other industries struggling with the pandemic’s ongoing economic impact. 

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