Category: Policy Landscape

Senate Advances FY’26 Spending Bills Preserving Key Transportation, Housing and EPA Programs

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The Senate Appropriations Committee on Thursday advanced bills to fund rental assistance, transit-oriented development loans, ENERGY STAR, and other key programs important to real estate, for the federal fiscal year that starts Oct. 1. The measures come as congressional leaders rush to complete appropriations work ahead of the Sept. 30 funding deadline to avoid a government shutdown.

HUD Programs        

  • The full Senate Appropriations committee passed the “T-HUD” bill to fund the Departments of Transportation and Housing and Urban Development, on a strong bipartisan vote (27-1). (Senate Press Release, July 24) (PoliticoPro, July 24)
  • The bill allocates $73.3 billion overall to HUD—maintaining or increasing funding for rental assistance, homelessness services, and economic development. (Bill Summary | Text )
  • Project-based rental assistance would receive $17.8 billion, a roughly $900 million increase above FY25 enacted levels. This funding provides a full renewal of housing contracts serving about 1.2 million households.
  • Tenant-based rental assistance would receive $33.9 billion to renew Section 8 vouchers. (THUD bill report, p. 115) The Senate’s funding levels contrast with the Trump Administration’s May 2 proposal to significantly cut both tenant- and project-based assistance.
  • The Community Development Block Grant (CDBG) program would receive $3.1 billion, with $1.2 billion allocated for the HOME Investment Partnership program.
  • Last week, the House Appropriations Committee passed its version of T-HUD funding (Bill Text | Summary). The full House of Representatives has yet to vote on it. (Roundtable Weekly, July 18)

DOT Programs

  • The U.S. Department of Transportation (DOT) would receive $26.5 billion under the Senate T-HUD bill. (Senate press release, July 24).
  • This includes a modest increase (over current FY levels) for the Build America Bureau (BAB), which oversees the TIFIA/RRIF federal loan programs. These programs can provide favorable, long-term, low-interest federal loans for transit-oriented developments, including housing and property conversions near mass transit. (FAQs)
  • The funding bill’s underlying report (p. 22) explains that DOT and HUD shall establish a “task force” to improve the TIFIA/RRIF loan process, with a report due back to the House and Senate on ideas for removing “administrative and statutory barriers” to access financing.

EPA – ENERGY STAR

  • The Senate’s bill text specifies $36 million next fiscal year, for the popular ENERGY STAR program, recognizing leadership in energy-efficient buildings, homes, and products.
  • The underlying report language for the Senate bill states that the Appropriations Committee “recognizes the value of and continues to support ENERGY STAR” – with a directive for EPA to “report back” on its plans for the program’s future implementation.
  • On the House side on Tuesday, the Appropriations Committee likewise showed support for ENERGY STAR. It passed a “manager’s amendment” on voice vote, instructing EPA to fund ENERGY STAR in FY’26. (PoliticoPro, July 22)
  • RER has long urged the “business case” to support the ENERGY STAR program. It is working with multi-industry partners in the real estate, manufacturing, consumer tech, and retail sectors to explain to Congress and the Administration why ENERGY STAR is critical to the national “energy dominance” agenda. (Roundtable Weekly, June 6; May 23).  

Agency Reorganizations

  • It is not yet clear how any FY’26 funds appropriated by Congress may interact with particular internal plans from federal agencies to reorganize and eliminate programs.
  • An 8-1 decision in July by the U.S. Supreme Court allows the Trump administration to move forward with large-scale staff reductions and structural overhauls across 19 federal departments. (Politico, July 8)
  • As part of government-wide efforts triggered by the DOGE Executive Order, restructuring plans and layoffs are under consideration at the EPA. (Politico, July 17)

What’s Next

  • Senate Majority Leader John Thune (R-SD) has indicated that he wants to sign as many spending bills into law as possible, then use a short-term stopgap measure to cover the remaining agencies and avert a shutdown before the Sept. 30 deadline. (PoliticoPro, July 23)
  • Any specific agency reorganization and staff layoff plans may be released in the coming weeks.

RER will continue to monitor all developments on matters of appropriations and federal agency reorganizations relevant to real estate.

Appropriations Season Underway on Capitol Hill; Agency Reorganization Plans Expected

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With the One Big Beautiful Bill Act (OBBBA) now enacted, attention in Washington has turned to appropriations for fiscal year 2026. Programs important to real estate—like HUD’s rental assistance program, and EPA’s ENERGY STAR program—are navigating the annual federal spending process, as Congress must pass legislation by September 30 to avoid a government shutdown.  (Roll Call, July 18)

HUD Programs

  • The House Appropriations Committee passed a bill on Tuesday to fund HUD in FY’26. (Bill text | Summary). The measure will next proceed to the full House of Representatives for a vote. (Press Release, July 17)
  • Under the bill, HUD would get about $67.8 billion in discretionary funds, a $939 million decrease compared to FY 2025.
  • Section 8 project-based rental assistance would receive a $237 million increase over FY 2025 levels, totaling $17.127 billion. According to the committee, the funding would support full renewal of contracts for roughly 1.2 million households.
  • Despite the funding gains for rental assistance, the bill includes a 26% cut to HUD staffing—raising concerns about the agency’s capacity to manage and deliver programs efficiently. (PoliticoPro, July 9)

EPA Programs

  • A separate House appropriations subcommittee also passed a bill on Tuesday to fund EPA for FY’26. (Bill text | Summary). The bill proposes no specific cuts to ENERGY STAR. The program receives strong support from RER in partnership with a broad coalition of national real estate, manufacturing, retail, and technology industry groups. (Roundtable Weekly, June 6).
  • The measure proposes $2.27 billion for EPA’s environmental programs in FY’26, representing a 29% cut compared to current fiscal year funding. (Summary)

Supreme Court Ruling Upholds Agency Reorganizations

  • Ultimate FY’26 spending levels will be impacted by agencies’ internal plans to reorganize and eliminate programs. An 8-1 decision by the U.S. Supreme Court last week allows the Trump administration to move forward with large-scale staff reductions and structural overhauls across 19 federal departments. (Reuters, July 9)
  • The high Court’s ruling states that any specific reorganization effort could be deemed illegal, while confirming the President’s general authority to direct agencies to develop “RIF and Reorganization Plans” by September 30 in accord with a “DOGE” Executive Order and White House memo both issued in February.
  • Moving forward with EPA’s planned restructuring, Administrator Lee Zeldin on Thursday announced further reorganization by consolidating finance and administrative offices, changing enforcement and Superfund offices, and continued workforce reductions through early retirements and layoffs. (PoliticoPro, July 17)
  • Reports thus far of Zeldin’s plans do not identify any planned cuts to ENERGY STAR or the larger division in which it is housed at the agency.
  • Advocacy by RER and coalition partners to the administration and Congress explains that ENERGY STAR’s continued success as a non-regulatory, public-private partnership depends on sufficient staff and budget resources to implement the program.

What’s Next

  • Rescissions: Congress may consider further efforts to rescind unspent prior-year funding, similar to the bill passed this week and now heading to the President’s desk clawing-back $9 billion in previous funds for foreign aid and public media. (POLITICO, July 18). 
  • More Tax Legislation?: According to the House speaker’s top tax aide, Congress may pursue a bipartisan tax package, additional retirement policy changes, and a follow-up reconciliation bill informally dubbed “2 Big 2 Beautiful.” (Tax Notes, July 17)
  • Section 899: Republican tax leaders Rep. Jason Smith (R-MO) and Sen. Mike Crapo (R-ID) have signaled they may reintroduce the Section 899 retaliatory tax if negotiations to exempt U.S. companies from OECD Pillar 2 taxes fail, potentially in a second reconciliation bill (Tax Notes, July 17). However, Germany’s Finance Minister Lars Klingbeil reaffirmed his country’s commitment to implementing Pillar 2 of the global minimum tax, despite widespread uncertainty following recent U.S. tariff announcements and the G7 carveout exempting American companies. (PoliticoPro, July 18)
  • FY’26 Appropriations: Senate Majority Leader John Thune has not yet decided whether to bring a government funding bill to the floor next week but aims to pass at least one funding package before the Senate’s August recess. (PoliticoPro, July 17) If congress does not pass FY’26 spending legislation by September 30, it could default to a stop gap “continuing resolution” and extend FY’25 levels to keep the government running.
  • Agency Restructurings: Reorganizations plans prompted by DOGE efforts will continue to be unveiled before and after Labor Day.

RER will continue to monitor all developments on matters of tax, appropriations, and federal agency reorganizations relevant to real estate.

Congress Delivers Historic Tax and Budget Package to Trump’s Desk for July 4th Signing

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After months of high-stakes negotiations, Congress this week passed the sweeping One Big Beautiful Bill Act, a comprehensive reconciliation package that overhauls tax policy, restructures federal spending, and advances numerous Real Estate Roundtable (RER) priorities as it heads to President Trump’s desk for signature. (Roll Call, July 3)

State of Play

  • The House passed the final version of the One Big Beautiful Bill Act this afternoon, following a narrow vote of 218–214, capping off weeks of negotiations and delivering a legislative victory to Republican leaders ahead of the July 4 deadline. In the end, two Republicans—Reps. Thomas Massie (R-KY) and Brian Fitzpatrick (R-PA)—joined all Democrats in opposing the bill. (The Hill, July 3)
  • “With one big, beautiful bill, we are gonna make this country stronger, safer, and more prosperous than ever before, and every American is going to benefit from that,” said House Speaker Mike Johnson (R-LA). “Today we are laying a key cornerstone of America’s new golden age.” (Politico, July 3)
  • The Senate passed the sweeping budget bill in a 51-50 vote on Tuesday, after almost 24 hours of debate, amendments, and a “vote-a-rama” that ended with Vice President JD Vance casting the tiebreaking vote in favor of passage. Three GOP senators—Rand Paul (R-KY), Thom Tillis (R-NC), and Susan Collins (R-ME) voted no. (Axios, July 2)
  • In an interview after the bill’s Senate passage, Senate Majority Leader John Thune (R-SD) acknowledged that the decision to make the measure’s business tax cuts permanent impacted its savings and overall strategy. “We really believed that permanence was the key to economic growth because it creates certainty,” he said. “All the models that we saw showed that you got more growth with permanence.” (PoliticoPro, July 1)

Roundtable Advocacy

  • The final legislation advances a broad array of policies that support capital formation, real estate investment, and housing development, while repealing harmful proposals like Section 899 and preserving longstanding tax rules vital to CRE.
  • “This legislation represents a meaningful step toward strengthening communities, expanding housing opportunities, and supporting long-term economic growth,” said Jeffrey DeBoer, President and CEO of RER. “By advancing policies that encourage investment and preserve small business tax parity, Congress is helping to revitalize neighborhoods, create jobs, and ensure all Americans benefit from a stronger built environment.
  • DeBoer added, “We are, of course, disappointed that the overall bill is predicted to increase the deficit and national long-term debt. However, we hope that the pro-growth aspects of the bill will narrow both by significantly growing the economy and providing revenues greater than those now projected.  Likewise, we are concerned with predictions by some regarding the impact of spending cuts on research and needed health care for Americans.”
  • RER’s advocacy efforts were particularly successful in eliminating several provisions that would have severely impacted CRE, including Section 899, known as the “revenge tax,” and harmful limitations on state and local tax deductions for pass-through businesses.
  • Speaking to Bisnow regarding the impact of the tax provisions on real estate, Ryan McCormick, RER’s SVP and Counsel, said, “From the bill’s investment in housing and low-income communities to its fair treatment of entrepreneurial and pass-through businesses, the legislation strikes the right balance … it should spur job-creating capital investments in commercial properties across the nation.” (BisNow, July 1)

Tax Policy

  • The final legislation includes several tax provisions that will provide significant benefits to commercial real estate and support long-term economic growth:
  • Permanent Business Tax Cuts: The bill makes permanent several business tax deductions from the 2017 Tax Cuts and Jobs Act (TCJA), including the Section 199A deduction for pass-through businesses and interest deductibility rules under Section 163(j).
  • Section 899: Late last week, lawmakers removed the Section 899 provision known as the “revenge tax” from the bill after the Treasury Department secured an international tax agreement with G7 countries. RER strongly advocated for changes to the measure, warning that the tax would have deterred foreign investment in U.S. commercial real estate and weakened capital formation.  (Roundtable Weekly, June 27) (BisNow, July 1) (Commercial Property Executive, July 1)
  • Opportunity Zones: OZs are now a permanent feature of the tax code, though deferral periods for eligible gains are shortened through the end of 2026—a technical issue that RER will continue to address in discussions with Congress and Treasury.
  • Low-Income Housing Tax Credit (LIHTC): The bill preserves and enhances the LIHTC program, supporting the construction of affordable housing nationwide.
  • Bonus depreciation & expensing: Full expensing and 100% bonus depreciation for qualifying property are restored and made permanent, providing significant cash flow benefits for property owners undertaking capital improvements.
  • SALT workarounds preserved: The final bill drops proposed changes to state and local tax deductibility on pass-through business income, preserving current law that allows deductibility through state pass-through entity tax regimes.
  • Condominium construction tax accounting: The legislation includes provisions the RER has advocated for since 2015, allowing condo developers to use the completed contract method of accounting, aligning tax liability with actual receipts.
  • Excess business losses: The revised Senate bill avoids a controversial proposal from earlier drafts that would have permanently siloed active pass-through business losses, instead opting to extend current law under Section 461(l) without restricting taxpayers from using those losses against wages and investment income. This approach preserves flexibility for entrepreneurs, start-ups, and two-earner households and avoids undermining the principle of measuring true net income.

Energy Tax Credits

Sustainable Renewable Energy Concept With Wind Turbines, Solar Panels And City Buildings Background.
  • For months, clean energy tax incentives enacted under the Inflation Reduction Act (IRA) have been a point of contention in both the House and Senate, with several Republican lawmakers urging leadership to take a more targeted approach to scaling back the IRA’s provisions—while maintaining incentives that support both traditional and renewable energy sectors. (RW, April 25) (CBS News, July 1)
  • Ultimately, the final legislation significantly scales back the IRA’s clean energy tax incentives by accelerating the phase-out of wind and solar credits, while dropping a controversial excise tax on projects using foreign components and preserving eligibility for already planned or approved developments that begin construction before mid-2026. (PoliticoPro, July 1) (Bloomberg, July 1)
  • The Section 48E Investment Tax Credit (ITC) for wind and solar projects remains in the tax code, but projects that begin construction 12 months after the bill’s enactment must be placed in service by the end of 2027.
  • The Section 179D deduction for energy-efficient commercial building construction and retrofits is now limited to projects that begin construction by June 30, 2026.
  • Similarly, the 45L tax credit for energy-efficient new residential construction expires for homes “acquired” after June 30, 2026.
  • Importantly, ENERGY STAR’s current budget for FY2025 was not affected by any of the funding rescissions in the final bill.
  • At this week’s BOMA International Conference, RER’s SVP and Counsel Duane Desiderio joined John Boling (VP, Advocacy & Building Codes, BOMA International) for a panel discussion on ENERGY STAR Portfolio Manager, highlighting the program’s legal foundation, bipartisan economic appeal, and importance to real estate stakeholders. (Commercial Property Executive, July 2)
  • RER will continue engaging with lawmakers through the annual appropriations process to ensure that FY2026 federal funding bills (for spending starting October 1) support ENERGY STAR. (Commercial Property Executive, July 2)

What’s Next

  • With the One Big Beautiful Bill Act heading to the president’s desk, attention now turns to the appropriations process and additional reconciliation opportunities.
  • Speaker Mike Johnson has expressed interest in pursuing additional budget reconciliation efforts, a process that Congress can undertake at the end of the fiscal year.
  • In an interview on Fox News Tuesday, Johnson said, “This is just a step in a sequence of events. We’re intending to do more reconciliation work. The plan is to do one in the fall for FY26 budget year and we can also squeeze in a third one for FY27 before this Congress is up.” (Politico, July 2) (Punchbowl News, July 2)

RER will continue to provide in-depth analysis in the coming days and weeks on the reconciliation bill’s implications for commercial real estate, including technical implementation, market impacts, and policy recommendations.

Senate Republicans Race to Resolve Policy Disputes in One Big Beautiful Bill

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Senate Republicans are racing to rewrite significant portions of their sweeping reconciliation bill in an effort to vote before the July 4 recess. Parliamentarian rulings, unresolved tax and Medicaid issues, and opposition from fiscal hawks and House conservatives are testing the goal of delivering the legislation to President Trump’s desk by the holiday.

State of Play

  • “We’ll have you out of here by the Fourth of July,” Senate Majority Leader John Thune (R-SD) told reporters Thursday.
  • Parliamentarian Elizabeth MacDonough has ruled that several provisions violate reconciliation rules, including proposed changes to Medicaid financing and certain tax offsets.
  • Republicans must now revise or replace those sections while managing disagreements over state provider taxes, energy tax incentives, and the deductibility of state and local taxes (SALT).
  • The earliest a Senate vote could begin is Saturday, followed by a “vote-a-rama” and potential final passage on Sunday. The House has pledged a 48-hour notice before any floor vote, meaning the earliest action could occur Monday evening. (Roll Call, June 24)
  • “I remain very optimistic that there’s not going to be a wide chasm between the two products, what the Senate produces and what we produce. We all know what the touchpoints are, the areas of greatest concern,” House Speaker Mike Johnson (R-LA) said.

Energy Tax Incentives

  • Several Senate Republicans are pushing to soften proposed rollbacks to the Inflation Reduction Act’s (IRA) energy tax credits. (PoliticoPro, June 23)
  • The Senate Finance Committee’s current version seeks to phase out IRA credits faster than Democrats’ 2022 law but retains more favorable provisions than the House bill, including construction-based eligibility rules. (PoliticoPro – Analysis, June 24)
  • Sen. Lisa Murkowski (R-AK) said Thursday that she was focusing on ensuring Senate Finance language allowing projects to receive credits based on when they begin construction remains in the bill. Conservatives are seeking to return to more restrictive language passed by the House that would determine eligibility based on when those projects start producing electricity. (PoliticoPro, June 27)
  • “I want to make sure ‘commence construction’ is in place versus ‘placed in service.’ That’s really important,” said Sen. Murkowski.
  • However, fiscal conservatives remain opposed to extending energy subsidies, and Democrats continue to warn that weakening IRA incentives could threaten grid reliability as demand surges from data centers and AI-related power needs. (NYT, June 26)

RER Homeland Security Task Force Engaged Amid Iran Conflict

  • RER’s HSTF is actively coordinating with public and private partners in response to heightened geopolitical risks stemming from the conflict with Iran.
  • Under the oversight of the HSTF, the RE-ISAC, serves as the primary conduit of terrorism, cyber and natural hazard warning and response information between the government and the commercial facilities sector. (RW, June 13)
  • Through the HSTF and RE-ISAC, RER remains engaged in preparedness efforts, emphasizing resilience across the industry and monitoring evolving threats that could affect the nation’s infrastructure and operations.

Congress is expected to work through the weekend as Senate leaders try to finalize the reconciliation package and set up potential floor votes before the July 4 recess.

GOP Leaders Signal Reconciliation May Slip Past July 4 Deadline as Negotiations Continue

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As Senate Republicans navigate internal divisions and mounting pressure from the White House, critical policy decisions in the reconciliation package—including tax reforms, energy, and trade provisions are rapidly taking shape with implications for commercial real estate.

State of Play

  • More doubts have emerged among GOP leaders about whether the Senate will be able to meet its self-imposed July 4 deadline for passing its version of the reconciliation package.
  • Though Speaker of the House Mike Johnson (R-LA) believes that the GOP is still on track, he emphasized that meeting the deadline hinges upon how much the Senate’s bill diverges from the House bill passed last month. 
  • “We’ll see what they produce,” Johnson told Politico, adding, “I just need them to come to their final decisions on everything. So we’ll see how it shapes up.” (Politico, June 11) 
  • Though the White House is keeping the pressure on senators, even President Donald Trump has acknowledged that additional time could be needed to finalize the reconciliation measure. (Politico, June 11)   
  • For their part, House Republicans approved several changes to their bill this week that were necessary in order to keep it in compliance with Senate rules. (Politico, June 10)  
  • If the Senate makes major revisions, the bill could go to conference in July in order to hammer out the differences, which could run up against the U.S. hitting its debt limit in August. (Axios, June 11) 
  • Senate Majority Leader John Thune said his team and key Senate committee chairs are coordinating closely with Speaker Johnson, holding weekly meetings and frequent calls to prevent the House from altering a bill that passes the Senate.
  • “There’s just a lot of coordination to hopefully avoid some of the potential snafus that could happen with something that’s this complicated,” Thune said. (Politico, June 11)

Key Issues 

  • Fiscally conservative Sens. Rand Paul (R-KY) and Ron Johnson (R-WI), among others, continue to scrutinize the long-term effect that the “Big Beautiful Bill” would have on the budget deficit.
  • In an interview with the Financial Times on Tuesday, Sen. Johnson conditioned his vote on assurances that the White House would cut more federal spending with a second major bill before next year’s midterm elections. (Financial Times, June 11)
  • The spotlight remains on the Senate Finance Committee, with Chairman Mike Crapo (R-ID) telling GOP senators Wednesday that he plans to scale back the House’s cap on the deductibility of state and local taxes (SALT) for individuals and rework repeals of clean energy tax credits from the Inflation Reduction Act (IRA). (Punchbowl News, June 12) 
  • Senate Republicans are also aiming to make business tax deductions for R&D, equipment purchases, and interest on debt permanent, rather than temporary as proposed in the House bill. (Punchbowl News, June 13)

IRA Energy Tax Credits

  • Senate Majority Leader John Thune (R-SD) is juggling different IRA demands, including at least four senators who want a less aggressive approach to the House’s proposed repeals. (Punchbowl News, June 12)
  • Sixteen clean energy tax incentives could be repealed or modified under the House-passed reconciliation bill, now under review by the Senate. Proposed changes to the IRA’s clean energy credits would eliminate incentives for residential energy-efficient upgrades and clean vehicles, while shortening the window for projects to begin construction and still qualify.  (PoliticoPro Analysis, June 11)
  • Senate Republicans are moving toward a consensus on preserving the transferability of clean energy tax credits from the IRA, as Finance Chair Mike Crapo (R-ID) signaled openness to easing the House-passed restrictions and extending the phaseout timelines during a GOP conference briefing this week. (PoliticoPro, June 12)
  • The House-passed measure included provisions that would restrict credit transferability, which allows companies to sell their tax credits to a buyer in exchange for cash. (PoliticoPro, June 12)
  • “If you are going to have a credit, if it’s not transferable, it’s not of much use,” said Sen. Kevin Cramer (R-ND). (PoliticoPro, June 12)

Trade Talks

  • Tariffs on materials such as lumber, steel, and aluminum have presented several challenges for commercial real estate. Impacts have included increased construction costs, the potential for project delays, and heightened uncertainty among investors. (RW, April 4)
  • The U.S. and Mexico are approaching a deal to reduce or eliminate President Trump’s 50 percent steel tariffs on imports, up to a certain volume. (Reuters, June 10)
  • This week, Commerce Sec. Howard Lutnick and senior economic officials from China agreed “in principle” to a framework of a “trade truce” between the world’s two largest economies, a sign of further progress. (CNN, June 11)
  • Late Wednesday, Trump said the U.S. was “rocking in terms of deals,” as it held trade talks with about 15 countries, including Japan and South Korea—but the president also threatened to unilaterally set tariff levels for many other countries in the coming weeks.   (WSJ, June 12)

Looking Ahead

As the White House urges Senate Republicans to make only modest changes to the reconciliation bill, Senate leaders are moving toward issuing final bill text by June 23, followed by a vote-a-rama. (Politico, June 12)

Senate Republicans Grapple with Details of Tax and Spending Bill

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With Congress back in session this week, Senate Republicans got to work on ironing out the details of their version of the budget reconciliation package. Members of the upper chamber are signaling a number of changes to the House’s bill, which could complicate Speaker Mike Johnson’s (R-LA) fragile coalition.

State of Play

  • Majority Leader John Thune (R-SD) met with President Trump at the White House on Monday, initiating a series of calls from Trump to individual GOP senators to discuss their concerns for the House-passed reconciliation package. (Punchbowl News, June 4)
  • The Senate GOP caucus met Wednesday afternoon to speak about the portions of the legislation that had already been or are on the cusp of being released. Among the most contentious issues: Medicaid, the state and local tax (SALT) deduction cap, and Inflation Reduction Act (IRA) energy tax credits. (Politico, June 3)
  • Finance Committee member Sen. Thom Tillis (R-NC) is one of several GOP lawmakers who has voiced interest in adjusting the phaseouts of certain IRA energy tax credits with a more “targeted” approach to protect U.S. businesses—including real estate—that are already invested in existing projects. (NBC News, June 6)
  • Fiscal hawks Rand Paul (R-KY) and Ron Johnson (R-WI) have already expressed opposition to the bill because it doesn’t contain enough spending cuts or do enough to address budget deficits. (WSJ, June 4)

Potential SALT & Business Tax Changes

  • On Wednesday, Senate Finance Committee members met with President Trump to discuss possible changes to the tax section of the bill. During the meeting, Senators briefly touched on their intention to try to revise the House’s proposal to raise the cap on SALT deductions for individuals to $40,000. 
  • Speaking to reporters outside the White House, Majority Leader Thune said he and his colleagues “start from a position that there really isn’t a single Republican senator who cares much about the SALT issue.” Thune went on to concede that he and other GOP senators “understand that it’s about 51 and 218, so we will work with our House counterparts and with the White House.”(Politico, June 4)
  • “We are sensitive to the fact that, you know, the speaker has pretty narrow margins, and there’s only so much that he can do to keep his coalition together. At the same time it wouldn’t surprise people that the Senate would like to improve on their handiwork,” Sen. Todd Young (R-IN) told reporters. (Politico, June 4)
  • The bulk of tax writers’ Wednesday meeting with the president, however, focused on a different issue: Trump is not sold on making several proposed business tax breaks permanent, including 100 percent bonus depreciation for equipment, machinery, and nonresidential property improvements.
  • Trump told Sen. Johnson and other members of the Finance Committee that it could be better for economic growth to make the provisions temporary, providing a more immediate incentive for businesses to take advantage of them. (Politico, June 5)

Section 899

  • Another area of debate that has emerged among Senate tax writers concerns Section 899, which would impose steep retaliatory taxes—up to 50 percent—on foreign taxpayers from countries that discriminate against U.S. businesses through their own tax regimes. (Roundtable Weekly, May 30)
  • If enacted in its current form, in addition to taxing foreign companies, Section 899 could raise tax rates on passive foreign investment in the U.S. (CNBC, June 2; Kirkland and Ellis, June 5)
  • Congress’ Joint Committee on Taxation has asserted that the “retaliatory tax” could in effect lead to a decline in foreign demand for U.S. assets and lower U.S. tax revenue (Bloomberg, May 30) 
  • In the short term, however, the provision is projected to raise significant revenue—$120 billion over the first five years. (Politico, June 4) 
  • Senators are reviewing potential changes and modifications to section 899 to address concerns. “There’s a lot of nervousness about how it could be used,” Sen. James Lankford (R-OK) told reporters, indicating that Republicans “want to make sure there’s not some unintended consequences.” (Semafor, June 4)

Implications for CRE

  • Senate tax writers, thus far, have not signaled significant interest in changes to priority issues like the deductibility of property taxes (business SALT) or carried interest.
  • The Senate is considering potential Roundtable-backed improvements to the House-passed Opportunity Zone provisions, as well as reforms to the low-income housing tax credit, the new markets tax credit, and a longer extension for provisions related to bonus depreciation and business interest deductibility.
  • An RER working group is analyzing Section 899’s impact on real estate and working to ensure policymakers understand its potential unintended consequences, which could include deterring foreign investment in large-scale, capital-intensive real estate and infrastructure projects in the U.S. (Roundtable Weekly, May 30)

Looking Ahead

While a few Senate committees have already released their sections of the bill, the Senate Finance Committee is expected to share their draft of the tax portion next week. RER will continue to update its members on key changes and their impacts on the commercial real estate industry during what will surely be an eventful month in Washington as the Senate works toward passing their reconciliation package by July 4.

Senate to Debate Changes to Reconciliation Bill

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With Congress back in session next week, the Senate is gearing up to take on the House’s reconciliation package and potentially make significant changes to the bill. Meanwhile, the Trump administration is expected to release further information on its FY2026 budget.

Senate to Take Up One Big Beautiful Bill Act

  • “This bill is far from over, but we are pleased the House bill maintains current law on business property and income tax deductibility, carried interest, and Section 1031 exchanges, while also improving Opportunity Zones, the Low-Income Housing Tax Credit, and taxation of pass-through entities,” said Jeffrey DeBoer, President and CEO of The Real Estate Roundtable (RER). “As the Senate takes up this bill we plan to work to preserve these provisions.  We are also highly focused on eliminating the ‘retaliatory tax’ on foreign investment, as well as improving other aspects of the bill.”
  • The Senate is back in session Monday and eager to put its mark on the massive reconciliation package. The next four weeks will involve crucial tax negotiations on a variety of key provisions, including Inflation Reduction Act (IRA) energy tax incentives, state and local tax (SALT) deductions, Medicaid, and more. There are also procedural hurdles that the Senate bill must overcome.
  • Speaker Mike Johnson (R-LA) implored his Senate colleagues to avoid making major changes to the bill, saying, “If it wasn’t obvious for them, I wanted them to know the equilibrium that we reached is so delicate… My hope and my encouragement to them is – fine tune this product as little as possible.” (Punchbowl News, May 26)
  • Difficult compromises based on countless hours of negotiations were made to get the House bill across the finish line. If the Senate makes drastic changes, it could force negotiators back to the drawing board on certain issues and make it more difficult to meet the GOP’s goal of getting the reconciliation bill to President Trump’s desk by July 4. (Punchbowl News, May 29)

Expected Changes to the Reconciliation Bill

  • Early reports indicate that Senate leadership will seek only minor modifications to the House’s bill, rather than sweeping changes. But some senators are pushing for much more. (Punchbowl News, May 23)
  • Procedural changes: The Senate’s Byrd Rule requires that only budget-related items are included in the reconciliation process. As a result, some minor provisions could be stripped out. (Axios, May 28)
  • Tax additions: The Senate is also expected to switch the bill from a “current law” to a “current policy” baseline, allowing the Senate to permanently extend key tax cuts expiring this year. This would give Senate tax writers more space to include other tax provisions, including the Tax Cuts and Jobs Act’s (TCJA) 100 percent bonus depreciation.
  • Energy tax incentives: Multiple GOP senators have advocated for protecting the IRA energy tax incentives, including Sens. Lisa Murkowski (R-AK) and Thom Tillis (R-NC), who sits on the Senate Finance Committee and wants to moderate the House’s rollback of the tax credits. (Politico, May 23)
  • These modifications could include extending some tax credits that the House bill proposed eliminating, or expanding the timeline for their phase-out to ensure that the change does not strand energy projects already in progress.

Other Potential Changes

  • Medicaid cuts: Sens. Josh Hawley (R-MO), Susan Collins (R-ME), and others have taken issue with the House bill’s Medicaid cost-cutting measures, including expanded work requirements and other changes. (The Hill, May 28)
  • Deficit debate: A group of deficit hawks, including Sen. Ron Johnson (R-WI), are pushing for far deeper spending cuts than the House bill proposes, and have criticized it for not sufficiently reducing the deficit. Sen. Rand Paul (R-KY) also called the spending cuts in the House bill “wimpy and anemic.” (Axios, May 25)
  • Pressure from President Trump was crucial to getting deficit hawks in the House to back down from their opposition to the lower chamber’s bill. It remains to be seen whether conservatives concerned about the deficit in the Senate will put up more of a fight.
  • Debt limit: The Senate could increase the debt limit hike in the bill from $4 trillion to $5 trillion, ensuring that the next debt limit fight doesn’t happen until after the 2026 midterms. However, this proposal has also faced opposition from Sen. Rand Paul. (Politico, May 25)
  • Overall, Senate Majority Leader John Thune (R-SD) has his work cut out for him in order to hammer out the differences in opinion within his caucus. He can only afford to lose three GOP senators. It will take immense effort and deft political maneuvering to meet their aggressive July 4 goal.

Looking Ahead

  • Trump’s FY2026 budget request is expected to be released next week, kicking off a renewed budget battle after the administration’s skinny budget proposed in early May received pushback from both sides of the aisle. (Reuters, May 2)

RER will continue to engage with policymakers to ensure that the commercial real estate industry has a seat at the table in the critical Senate negotiations to come.

“One Big Beautiful Bill” Moves Through to the Senate as House Republicans Unite on Trump Tax Plan

Posted on by abigail_grenadier

House Speaker Mike Johnson (R-LA) met his self-imposed Memorial Day deadline as dissenting factions within the caucus reached an agreement on a series of last-minute changes, culminating in a razor-thin vote (215-214) on the One Big Beautiful Bill Act early Thursday morning. The budget reconciliation measure—which has wide implications for CRE—now goes to the Senate, where a similar tug of war could play out. (Ways & Means Press Release, May 22)

State of Play

  • The House Budget Committee voted late Sunday night to advance President Donald Trump’s One Big Beautiful Bill Act after several GOP hard-liners on the Committee blocked the measure from moving forward last Friday. (ABC News, May 19)
  • President Trump traveled to Capitol Hill Tuesday morning to deliver a message to House Republicans impeding the massive bill, a critical part of his domestic agenda: stop fighting and get it done as soon as possible. (NBC News, May 20)
  • The chamber took action, clearing the sprawling package in an early-morning vote Thursday after days of marathon meetings, intense negotiations that spanned both ends of Pennsylvania Avenue, and a series of swift changes to the bill, which were crucial in coalescing Republicans around the measure. (The Hill, May 22)
  • House Ways and Means Chair Jason Smith (R-MO) said that he’s been working “hand in glove” with Majority Leader John Thune (R-SD) and Senate Finance Committee Chair Mike Crapo (R-ID) on the tax package and had crafted it intentionally so it could survive the Senate’s rules. “I think 90 to 95 percent of the bill is going to be pretty much very similar,” he said previously. (Bloomberg, May 22)

Implications for CRE

  • The legislation includes an extension of the 2017 tax cuts, while maintaining the full deductibility of state and local business property tax deductions (also known as “Business SALT”) and preserving the current treatment of carried interest, two key priorities for The Roundtable in the current tax negotiations.
  • Additionally, the pass-through deduction under Section 199A would increase from 20 percent to 23 percent for qualifying income, including REIT dividends and the real estate operating income of partnerships and other pass-through entities. A late addition to the bill will allow REITs greater flexibility in their use of taxable REIT subsidiaries. (The Hill, May 21)
  • The bill extends the Opportunity Zone (OZ) tax incentives through 2033, with several updated eligibility criteria and new benefits for rural areas. This legislation also calls for a new round of OZ designations by state governors. (Mortgage Point, May 22)
  • Other positive developments include an expansion of the low-income housing tax credit and the reinstatement of 100 percent expensing for qualifying leasehold and nonresidential property improvements.
  • Now, the Senate will debate and craft its version of the bill, which it aims to pass by July 4. (The Hill, May 21; CNBC, May 22)

The Roundtable’s Position

  • RER expressed support for the House’s budget reconciliation measure. The extension of TCJA policies, preservation of property tax deductibility, continued capital gains treatment for carried interest, increased investment in affordable housing, and enhanced pass-through deduction are all positive developments. 
  • “Taken as a whole, the tax proposals in the Chairman’s amendment will spur needed investment in our nation’s housing supply, strengthen urban and rural communities, and grow the broader economy to the benefit of all Americans,” said RER President and CEO Jeff DeBoer in a recent statement following the House Ways and Means Committee’s bill markup last week.

What’s Next       

  • The action on the tax and fiscal legislation now shifts to the U.S Senate where Republicans are operating under similar tight margins.
  • Senate Republican leaders have not yet decided whether they will mark up the reconciliation bill in the various committees of jurisdiction. Finance Chairman Crapo could bring a substitute amendment straight to the Senate floor sometime in June.

RER will work to ensure that these hard-fought victories are protected in any final tax package.

What’s Ahead: Reconciliation Talks on Capitol Hill

Posted on by abigail_grenadier

Congress will return to Washington next week with an ambitious agenda—kicking off markups for a sweeping reconciliation package that would enact the President’s legislative agenda and could shape the fiscal and tax landscape for years to come. (CBS, April 24)

Markup Schedule

  • The Judiciary, Homeland Security, and Armed Services Committees are expected to lead the process starting the week of April 28. These panels have jurisdiction over spending on border security and defense and are tasked with allocating $110 billion, $90 billion, and $100 billion respectively under the House budget resolution. (Politico, April 17)
  • The Energy and Commerce Committee is targeting May 7 for its markup. The committee is required to find $880 billion in savings, which may involve changes to Medicaid, electric vehicle mandates, and other policy areas. (Punchbowl News, April 23)
  • The Financial Services Committee is set to vote on April 30 on its share of the reconciliation package, which must include a minimum of $1 billion in cuts over 10 years. (PoliticoPro, April 23)
  • Speaker Mike Johnson (R-LA) and Senate Majority Leader John Thune (R-SD) have expressed a shared goal of advancing the reconciliation package by Memorial Day.
  • “We are pushing it very aggressively on schedule, as you said, to get it done by Memorial Day,” Johnson said this week, citing the need to tame stock market instability.
  • Johnson also said he and House Majority Leader Steve Scalise (R-LA) had a conference call with the 11 House GOP committee chairs on Wednesday to discuss the next steps for Trump’s “big beautiful bill.” (PoliticoPro, April 23)

Tax Policy

  • Tax legislation will be a cornerstone of the reconciliation package as lawmakers prepare to extend the major tax provisions from the Tax Cuts and Jobs Act (TCJA) that are scheduled to expire at the end of 2025. (PoliticoPro, April 14)
  • The House Ways and Means Committee is eyeing a potential two-day markup session on May 12 and 13. (PoliticoPro, April 24)
  • House GOP leaders, including Ways and Means Committee Chair Jason Smith (R-MO), are scheduled to meet Wednesday with blue-state Republicans to discuss the personal SALT deduction cap.
  • The meeting marks a key moment in resolving one of the most politically sensitive issues in the tax bill. While most Republicans support maintaining the current $10,000 cap, several GOP lawmakers from high-tax states have threatened to oppose the package unless the cap is raised to at least $25,000. (Punchbowl News, April 25)
  • As policymakers prepare the first major tax bill since 2017, The Roundtable (RER) and the real estate industry are focusing heavily on preserving the full deductibility of business-related property taxes. The deductibility of business-related state and local income and property taxes has emerged as a central issue as lawmakers look for ways to pay for new tax provisions.
  • A cap on the deductibility of property taxes paid by U.S. businesses could have devastating consequences for commercial real estate owners, developers, and investors nationwide, reversing the benefits of the 2017 tax bill and raising effective tax rates on real estate to 1970s-era levels near 50%.  (RW, April 11) 
  • State and local property taxes represent 40% of the operating costs of U.S. commercial real estate, a greater expense than utilities, maintenance, and insurance costs combined.  RER urges its members to weigh in with Members of Congress against restrictions on deducting state and local property taxes.
  • Other important issues for real estate in the current tax discussions include: tax parity for pass-through businesses, potential tax increases on carried interest, preservation of the opportunity zone tax incentives, and a possible expansion of the low-income housing tax credit.  (Bloomberg, April 21)

Potential Challenges Ahead

  • The reconciliation effort faces serious political hurdles, particularly regarding spending cuts and revenue-raising provisions.
  • House Republicans have a narrow majority, and leadership must secure support from nearly every member of their caucus. Proposed cuts to Medicaid and SNAP could generate pushback from moderate Republicans, while debates over “payfors” continue to divide lawmakers.
  • The House and Senate are also operating under different reconciliation instructions, which could further complicate aligning final legislation.

IRA & Energy Tax Credits

  • Since budget negotiations began, Republican leadership has suggested repealing some or all of the Inflation Reduction Act’s (IRA) clean energy tax credits as a way to reduce federal spending. However, several GOP lawmakers have advocated preserving specific provisions that benefit their constituents. (Reuters, April 21)
  • In a recent letter to Leader Thune, four Senate Republicans urged a more selective approach to scaling back the IRA’s tax provisions. Additionally, 21 House Republicans expressed their support for maintaining energy incentives that benefit both traditional and renewable energy sectors in a March letter to House Ways and Means Chair Jason Smith (R-MO). (Newsweek, April 21)

RER at the Forefront

  • This week, RER President and CEO Jeffrey DeBoer appeared on the special webcast  “Real Recession Risk or Temporary Distraction?” hosted by Marcus & Millichap President and CEO Hessam Nadji. DeBoer joined Moody’s Analytics Chief Economist Mark Zandi to discuss recession risks, inflation, and the broader impact of trade and tax policy in Washington. (Watch)
  • DeBoer was also a keynote speaker at the University of Wisconsin-Madison’s James A. Graaskamp Center Spring Board Conference earlier this month, where he shared his insights on how the Trump administration’s economic agenda, regulatory changes, tariffs, and tax policy are impacting commercial real estate.

RER will continue to monitor developments closely as Congress advances a package that could have far-reaching implications for commercial real estate, business taxation, and economic growth.

With Shutdown Averted, GOP Sharpens Focus on Tax Priorities

Posted on by Trey Jackson


Tax and fiscal policy are now at the top of the GOP’s agenda after a stopgap spending bill passed last Friday, preventing a potential government shutdown. House and Senate GOP members have just a few weeks of session before the long Easter and Passover recess to make significant progress on a budget resolution.

Government Shutdown Averted

  • Congress avoided a shutdown last Friday after ten Senate Democrats, including Minority Leader Chuck Schumer (D-NY), voted to advance the GOP’s stopgap spending bill. The six-month continuing resolution funds the federal government through September. (NBC News, March 14)

  • Schumer rallied enough Democrats in the Senate to approve the measure in a key procedural vote. Responding to outspoken disagreement within his party about voting for the GOP’s spending bill, Schumer said, “I knew it was a difficult choice, and I knew I’d get a lot of criticism for my choice, but I felt as a leader I had to do it.” (ABC News, March 18)

Tax Policy Update

  • With the risk of a shutdown now in the rearview mirror, House and Senate GOP leaders are focusing their attention on a reconciliation package that would advance their tax priorities, including extending key provisions of the 2017 Tax Cuts and Jobs Act (TCJA). (NYT, March 21)

  • The House passed its version of the budget resolution last month, but the bill has seen little movement in the Senate due to divisions within the GOP over budget constraints and offsets.
  • Congressional Republicans want to make the TCJA tax cuts permanent, which will be challenging under the House budget resolution’s current $4.5 trillion tax cut ceiling.

  • President Trump, Senate GOP leadership and House Speaker Mike Johnson (R-LA) support using a “current policy baseline” approach, a budget scoring method that would allow Congress to extend the TCJA tax cuts without adding to the deficit on paper and give them more room to include the administration’s other tax priorities. (Politico, March 13)

  • Senate Budget Committee Republicans are planning to hold meetings with the Senate parliamentarian’s office to determine if this approach complies with reconciliation rules. GOP lawmakers need guidance by early April to move forward with large parts of the budget resolution. (Punchbowl News, March 18)

  • The challenge of balancing tax relief with deficit concerns has fueled high-level discussions between Speaker Mike Johnson (R-LA) and Senate Majority Leader John Thune (R-SD). Thune acknowledged the difficulty of the process, saying, “Both of us understand we’ve got to get this done. And we’re trying to figure out the best way to do that.” (Punchbowl News, March 19)

Key Tax Provisions At Stake

  • While GOP leaders seek guidance on the “current policy baseline” approach, House Ways and Means Committee and Senate Finance Republicans are continuing to debate key tax provisions of the bill.

  • Senate Finance Chair Mike Crapo (R-ID) mentioned during an appearance at the U.S. Chamber of Commerce that there are over 200 proposals under consideration—including reducing the estate tax, expanding the Opportunity Zone program and enhancing the Low-Income Housing Tax Credit (LIHTC). (PoliticoPro, March 12)

  • Expanding Opportunity Zones and the LIHTC would help expand the supply of affordable housing and address the U.S. housing crisis. (Roundtable Weekly, March 17)
  • To offset the cost of the large number of tax proposals under consideration, Republicans are considering the repeal of Inflation Reduction Act (IRA) energy tax credits. IRA programs have come under increasing scrutiny by the Trump administration as it looks to roll back Biden-era energy policies.

  • However, a new report warns that eliminating these credits could result in nearly 790,000 job losses and increase consumer energy costs by $6 billion annually by 2030. In light of these concerns, 21 House Republicans have advocated for preserving the energy tax credits—pointing out that they are critical to help the U.S. meet Trump’s goal of becoming “energy dominant.” (PoliticoPro, March 20; Politico, March 10)

  • Other lawmakers have raised potential restrictions on the deductibility of state and local business property taxes, also known as “business SALT,” as a revenue offset for the tax bill. This tax change would have devastating consequences on the commercial real estate industry and the broader economy. (Letter, March 7 | Roundtable Weekly, March 17 | (BisNow, March 14)

  • RER has urged members to contact their representatives to oppose restrictions on business SALT that would discourage new investment and undermine housing affordability nationwide.

GSA’s Plans for Federal Leases

  • In other news this week, the General Services Administration (GSA)—under directions from the Elon Musk-led Department of Government Efficiency (DOGE)—will begin to vacate nearly 800 offices across the country this summer. (AP, March 14)

  • The news has generated great uncertainty for federal agencies using these offices and building owners who lease to the government. The Associated Press released a full list of office locations it found would be affected by the planned lease terminations. (AP, March 14)

Looking Ahead

  • With Congress racing to cut through key process hurdles before the April 13 recess, GOP leaders are hoping the concurrent budget resolution will start to finally take shape—though tough decisions remain ahead.

RER will continue to engage policymakers on important tax priorities for the real estate industry and analyze the implications of the GSA’s federal lease plans on commercial real estate across the country.