Roundtable Weekly - February 1, 2019
House Speaker Nancy Pelosi Addresses National Policy Issues; Roundtable Introduces 2019 Policy Agenda
Speaker of the House of Representatives Nancy Pelosi (D-CA) and Sen. Tim Scott (R-SC) were among the guests who addressed national policy issues during The Real Estate Roundtable’s 2019 State of the Industry (SOI) meeting this week in Washington.
Speaker of the House Nancy Pelosi (D-CA) addressed the Democrats' legislative priorities in the 116th Congress.
- Roundtable Chair Debra Cafaro (Chairman and CEO, Ventas, Inc.) launched the meeting on Tuesday, noting that 2019 marks the 20th anniversary of The Real Estate Roundtable's advocacy efforts in Washington. She also announced the release of The Roundtable's 2019 Policy Agenda – developed with input from a recent membership survey; discussions held throughout the year by policy advisory committees; consultation with 17 national real estate trade association partners; and The Roundtable's Board of Directors.
- Roundtable President and CEO Jeffrey DeBoer discussed policy initiatives the organization will focus on with the new Congress and the Trump Administration. The issues include ongoing implementation of the 2017 tax overhaul; FIRPTA repeal; infrastructure; affordable housing; renewal of the Terrorism Risk Insurance Act (TRIA); and energy efficiency initiatives affecting commercial real estate – all vital to spurring job creation and sustaining economic growth.
Policy Issues & Featured Speakers
The SOI meeting included the following speakers:
- Speaker of the House Nancy Pelosi addressed the Democrats' legislative priorities in the 116th Congress, including infrastructure improvements; the low-income and workforce housing crisis; and policies that will continue to foster economic growth. She emphasized the need for lawmakers to find common ground for the good of the nation, despite their differences on policy.
- Sen. Tim Scott, a leader in the development of legislation that established the new Opportunity Zones program, discussed the OZ program with Roundtable Member Geordy Johnson (CEO, Johnson Development). Sen. Scott delved into the creation and ongoing development of the OZ program – designed to channel investment and spur economic development, affordable housing, and job creation in distressed areas throughout the US. He also offered his views on how members in both the Senate and House need to inspire civility, opportunity and fairness in public life and the private sector.
- Dr. Ken Rosen , chairman of the Rosen Consulting Group, offered a presentation on "Continued Recovery or Brink of Recession." Joining Dr. Rosen in a discussion about recent Fed actions, stock market volatility and how signs of weakness in the Chinese economy may affect U.S. growth, were Roundtable Board Members Ric Clark (Senor Managing Partner & Chairman, Brookfield Property Group); Thomas Arnold, Global Head of Real Estate, Abu Dhabi Investment Authority); and Roundtable Chair Debra Cafaro (Chairman and CEO, Ventas, Inc.).
- Jim VandeHei , co-founder and CEO of Axios – a media company delivering news and insights on politics, business, media and tech – discussed the confluence of recent elections, social media and emerging global influences such as Artificial Intelligence.
- Jeff Flake (former US Senator, 2013-2018) and Joseph Crowley(former Member of the House, 1999-2018) discussed prospects for policymaking in a divided Congress with Roundtable President and CEO Jeffrey DeBoer.
Sen. Tim Scott (R-SC), left, a leader in the development of legislation that established the new Opportunity Zones program,
discussed the OZ program with Roundtable Member Geordy Johnson (CEO, Johnson Development).
Roundtable Policy Committees
SOI also included meetings of The Roundtable's policy advisory committees, which analyzed policy issues with high-level congressional and agency staff
Rep. French Hill (R-AR) at the joint Research and Real Estate Capital Policy Advisory Committee (RECPAC) meeting.
- Research and Real Estate Capital Policy Advisory Committee (RECPAC)
During this joint meeting, Rep. French Hill (R-AR) – member of the influential House Committee on Financial Services – discussed recent, positive reforms to the High Volatility Commercial Real Estate Loans (HVCRE) rules, which he played a key role advancing in Congress. Other issues discussed with Rep. Hill included reform of the Government Sponsored Enterprises and reauthorization of the National Flood Insurance Program, Export-Import Bank and terrorism risk insurance. A panel of industry experts also addressed the current real estate market cycle and the state of real estate capital and debt markets.
- Tax Policy Advisory Committee (TPAC)
A panel of all four chief tax counsels from the congressional tax-writing committees described what lay ahead for tax legislative priorities affecting commercial real estate. The discussion, moderated by Russ Sullivan (Brownstein Hyatt Farber Schreck), included Andrew Grossman, Chief Tax Counsel, House Ways & Means Majority; Tiffany Smith, Chief Tax Counsel, Senate Finance Minority; Randy Gartin, Chief Tax Counsel, House Ways & Means Minority; and Mark Warren, Chief Tax Counsel, Senate Finance Majority. An additional panel addressed the evolving Opportunity Zones program and featured Shafron (Shay) Hawkins, Legislative Assistant for Sen. Tim Scott (R-SC).
- Sustainability Policy Advisory Committee (SPAC)
U.S. Energy Information Administration speakers updated SPAC on the Commercial Building Energy Consumption Survey (CBECS) and its impact on ENERGY STAR scores. Additionally, Curtis Ravenel, Bloomberg LP's Global Head of Sustainable Finance and Business, addressed environmental, social and governance (ESG) risks and opportunities.
- Homeland Security Task Force meeting (HSTF) and Risk Management Working Group (RMWG)
Representatives of the FBI briefed the Joint Meeting on the current threat picture and discussed the recent efforts of its Critical Incident Response Group (CIRG) Special Events/Crisis Management Unit. The Task Force was also briefed on that status of reauthorization of the National Flood Insurance Program and the Terrorism Risk Insurance Act (TRIA), a major policy focus of The Roundtable in 2019.
Roundtable Senior Vice President & Counsel Ryan McCormick, left, with the four chief tax counsels of the congressional tax-writing committees at the Jan. 30 TPAC meeting.
Next on The Roundtable's FY2019 meeting calendar is the Spring Meeting on April 9 in Washington, DC. This meeting is restricted to Roundtable-level members only.
Lawmakers Focus on Preventing Second Partial Government Shutdown; House Committees Prep for Action on Tax and Infrastructure Issues
The federal government this week resumed full-time operations after a 35-day partial shutdown. A three-week bill signed by President Trump last Saturday now funds approximately 25% of the government – including the Department of Homeland Security (DHS), Treasury and the Internal Revenue Service (IRS) – until Feb. 15. If a new funding measure is not passed, the government will face another partial shutdown.
President Trump is scheduled to deliver the State of the Union to Congress on Tuesday, Feb. 5.
- The nonpartisan Congressional Budget Office released a report on Monday showing the partial shutdown reduced gross domestic product by $3 billion. (Wall Street Journal, Jan. 28)
- A House-Senate conference committee began negotiations Wednesday on a border security funding measure to resolve the same issue that caused the shutdown in December – a wall on the Mexican border.
- President Trump yesterday said, "On Feb. 15th, the committee will come back and if they don't have a wall, I don't even want to waste my time reading what they have because it's a waste of time." (Bloomberg, Jan. 31)
- House Speaker Nancy Pelosi (D-CA) yesterday stated, "There's not going to be any wall money in the legislation. However, if they have some suggestions about certain localities where technology, some infrastructure [is appropriate] ... that's part of the negotiation."
- The House Speaker added that House rules require the congressional conference committee to complete an agreement by Feb. 8 to pass it by Feb. 15. "In order to have a bill signed by the president, we have to have a signed conference report by next Friday. So we only have this week plus one day, with the State of the Union in between, to get this done," Pelosi said. (The Hill, Jan. 31)
- President Trump is scheduled to deliver the State of the Union to Congress on Tuesday, Feb. 5, when he is expected to address his proposed increase in border security funding, including $5.7 billion for wall construction. (Daily Caller, Jan. 30)
If a new funding measure is not passed by Feb. 15, the government will face another partial shutdown.
House Committee Hearings on Tax, Infrastructure
House Ways and Means Committee Chairman Richard Neal (D-MA) recently addressed his legislative priorities.
- House and Senate tax-writing committees are preparing for action on their policy agendas in the 116th Congress.
- House Ways and Means Committee Chairman Richard Neal (D-MA) addressed his priorities during a Jan. 24 organizational meeting. Neal stated that in addition to retirement security and health care costs, "Another issue requiring our attention is America's infrastructure. We must ensure our infrastructure systems are both safe and efficient it's essential for our global competitiveness. We'll also closely examine the Republicans' tax law and its various problems. So we'll be conducting thorough oversight of this law – oversight that frankly is well overdue. (Ways and Means, Neal Statement, Jan. 24.)
- Rep. Mike Thompson (D-CA), chairman of the Ways and Means' Subcommittee on Select Revenue Measures (formerly the tax policy subcommittee), said his panel's first hearing will focus on infrastructure, although he has not set a date for the hearing. Thompson added that the subcommittee will also review the 2017 tax code overhaul and how tax policies, such as a carbon tax or renewable energy tax breaks, impact climate change. (CQ, Jan. 31)
- The House Transportation and Infrastructure Committee, chaired by Rep. Peter DeFazio (D-OR), has scheduled a Feb. 7 hearing on "The Cost of Doing Nothing: Why Investing in Our Nation's Infrastructure Cannot Wait." DeFazio told CQ last week, "What happens if the rail tunnels under the Hudson River fail, what happens when the tunnel under Baltimore fails, built in the Civil War? We need to begin thinking about what are the costs and the potential for calamity if we don't make these investments." (Roll Call, Jan. 30)
- The Ways and Means Subcommittee on Oversight, chaired by Rep. John Lewis (D-GA), has also scheduled a Feb. 7 hearing on "Legislative Proposals and Tax Law Related to Presidential and Vice-Presidential Tax Returns." ( Washington Post, Jan. 31)
The Ways and Means Subcommittee on Oversight, chaired by Rep. John Lewis (D-GA), has also scheduled a Feb. 7 hearing on "Legislative Proposals and Tax Law Related to Presidential and Vice-Presidential Tax Returns."
Senate Finance Committee Chairman Charles Grassley this week said that retroactive renewal of more than 20 tax deductions that expired at the end of 2017 should be tied to a spending measure to keep the government fully funded beyond Feb. 15. "The only vehicle that I see in the next few weeks is what comes out of this closing-down conference," Grassley said,. "And if we don't have something ready to go when that's done, have a compromise on extenders ... then it's going to be a long time before we get another opportunity." (CQ, Jan. 31)