Category: Policy Landscape

Senate to Debate Changes to Reconciliation Bill

Posted on by abigail_grenadier

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.

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.

White House Moves on Plans to Slash Federal Funding, Staff, and Office Leases

Posted on by Trey Jackson
The White House

Funding freezes, employee buyouts and scrutiny of the federal office lease portfolio were among the actions taken by the White House and its Department of Government Efficiency (DOGE) this week, as the Trump Administration acted on promises to shrink the federal government.

Federal Funding

  • On Monday, the Office of Management and Budget (OMB) issued a memo implementing a “Temporary Pause” on certain federal financial assistance programs. (Politico, Jan. 28)
  • This directive aimed to stop federal loans and grants “implicated” by seven recent executive orders pertaining to areas such as clean energy, DEI initiatives, transgender rights, and foreign aid.
  • By Wednesday, OMB issued a 2-sentence memo rescinding the temporary pause, with the goal to moot the lawsuit filed in the interim that resulted in a federal court restraining order placing the spending freeze on ice.  (NYT, Jan. 28) (The Hill, Jan. 29)
  • OMB’s reversal does not lift previous holds on funding of programs disfavored by the administration. Underlying Executive Orders remain in effect regarding the U.S. withdrawal from the Paris climate treaty, “unleashing” American energy resources with a preference for oil and gas development, and abandoning federal DEI programs.
  • The administration may also issue future spending freezes. (Politico, Jan. 29) The administration will continue to reshape federal spending policies through executive action, raising significant constitutional issues that could reach the U.S. Supreme Court. (ABA Journal, Jan. 29).

Federal Workforce

  • The Office of Personnel Management (OPM) announced a buyout program offering federal employees severance equal to eight months’ salary if they resign by February 6. (The Hill, Jan. 30)
  • Employees who stay do not have a guarantee of their job – but must return to full-time, in-office work as per an executive order signed by Trump on inauguration day. (Washington Post, Jan. 23)
  • DOGE, led by Elon Musk, estimates the push for “deferred resignations” could shrink the federal workforce by 5% to 10%. (AP News, Jan. 28) (Axios, Jan. 28)
  • Meanwhile, Trump has ousted Democratic appointees of the National Labor Relations Board (NLRB) and the Equal Employment Opportunity Commission (EEOC) before the expiration of their terms. Litigation challenging these firings is highly likely. (Federal News Network, Jan. 28).    

Federal Office Leases

  • DOGE is also reportedly focused on reducing federal government leases in private-sector buildings. Musk has installed “longtime associates” at the General Services Administration (GSA) to reduce the footprint of U.S. owned and leased real estate. (NextGov, Jan. 30)
  • Musk’s visit yesterday to GSA headquarters could “presage more cost-cutting efforts” to “right-size the Federal real estate portfolio of more than 7,500 leases.” (New York Times, Jan. 30)
  • A recent Trepp analysis quantifies the impact of GSA-leased space in the Chicago, Dallas, Los Angeles, New York City, Washington, DC, and other metro areas where federal tenancy accounts for significant percentages of total office inventory.
  • Just as federal workers are returning to offices—prompted by a Trump Executive Order signed after his inauguration—the “cumulative damage” of canceling federal leases under a DOGE-led initiative “would be severe.” (GlobeSt, Jan. 20).

Looking Ahead

  • Ongoing budget reconciliation discussions on Capitol Hill suggest that further government funding cuts remain a possibility as part of broader fiscal policy negotiations. The situation remains fluid, with potential implications for various federal programs.
  • On Wednesday, House Republicans outlined their budget blueprint, setting fiscal targets and potential cuts as they prepare to draft a reconciliation package next week. (Politico, Jan. 29)
  • However, Republicans remain divided on strategy for advancing President Trump’s agenda. House Republicans favor a single-bill approach, while Senate Majority Leader John Thune indicates that his conference has developed an initial budget as part of a two-step plan to pass border security measures, tax cuts, and other priorities. (Politico, Jan. 29)

The Roundtable will continue to stay informed about further developments as the administration’s policies evolve.

Trump’s First 100 Days: Top Commercial Real Estate Policies to Watch

Posted on by Trey Jackson

President Donald Trump’s second term is rapidly taking shape, with sweeping executive orders, quick nominations and bold policy announcements advancing in the first few days of his second administration. From tax policy to housing, immigration, and energy initiatives, the commercial real estate sector faces a dynamic and fast-changing landscape.

Tax Policy

  • TCJA Renewal: Efforts to extend key provisions of the 2017 Tax Cuts and Jobs Act (TCJA) are a key priority for the Trump administration and Republicans in Congress, with significant implications for commercial real estate.
  • A number of RER priorities are at stake, including maintaining the reduced tax rate on capital gains, extending Opportunity Zones and the Section 199A deduction, safeguarding like-kind exchanges and enacting federal tax incentives for property conversions to address the housing shortage. (Roundtable Weekly, Jan. 10)
  • The content of the reconciliation package continues to be heavily debated, with multiple areas of intra-party disagreement among Republicans to overcome in order to reach a deal. Concerns about pay-fors, the growing debt, budget cuts and proposals to eliminate the state and local tax deduction (SALT) remain. (Politico, Jan. 22)
  • RER President & CEO Jeffrey DeBoer appeared on Marcus & Millichap’s 2025 Economic & CRE Outlook webinar with a panel of industry leaders discussing the macro environment, the potential policies of the new administration and tariffs, affordable housing, tax policy expectations and more.

Tariffs

  • Proposed Tariffs: Trump has signaled a desire to implement sweeping tariffs, including a 25% tariff on goods from Mexico and Canada that could go into effect on Feb. 1. Trump has also considered a universal 20% tariff on all imports and a 60% tariff on China. (CNN, Jan. 21)

  • These measures are aimed at boosting domestic manufacturing and addressing trade imbalances but could have ripple effects on construction costs and material availability. Any tariffs on imported materials like steel, aluminum and lumber are likely to drive up costs for developers and impact efforts to address the housing shortage. (BisNow, Jan. 17)

  • The scale and scope of the President’s tariff plans are in flux. Trump’s advisors have reportedly considered a phased-in tariff approach. It’s also possible that Trump makes use of the White House’s exemption authority to protect certain industries or goods deemed vital. (Bloomberg, Jan. 13)

Regulatory Work

  • President Trump also signed an executive order freezing all ongoing regulatory work across the federal government, halting the proposal or publication of new rules until reviewed and approved by his administration.
  • The freeze delays the effective date of recently published rules by 60 days, allowing time to decide which Biden-era regulations to keep, rewrite, or discard. (National Law Review, Jan. 23)
  • As with many other parts of the U.S. financial regulatory framework, the pending Basel III Endgame proposal may end up being reproposed with a capital neutral scheme, giving a potential boost to liquidity and credit capacity under the new Trump administration. 

Disaster Aid and NFIP Extension

  • California Fires: Congress and the new administration will soon need to provide billions of dollars in aid to assist those affected by the Los Angeles wildfires. The catastrophe could reach up to $275 billion, with then of thousands of homes and businesses will need to be rebuilt, making federal assistance essential. (Roundtable Weekly, Jan. 17)
  • NFIP: The increasing severity of natural disasters—including the devastating hurricanes last year—has increased the importance of the National Flood Insurance Program (NFIP), whichis set to expire on March 14 unless reauthorized. The Senate Banking, Housing and Urban Affairs Committee held a hearing on Thursday to discuss the program’s renewal. (Politico, Jan. 22)

Housing

  • Fannie Mae and Freddie Mac Privatization: Trump’s team is expected to resume efforts to privatize the government-sponsored enterprises (GSEs), which could significantly reshape multifamily financing markets.
  • Trump has nominated Bill Pulte, to lead the Federal Housing Finance Agency (FHFA), which oversees the GSEs—a move experts say is part of Trump’s push towards privatization. (CRE Daily, Jan. 17)
  • Deregulation to Spur Housing Development: Trump has pledged to roll back environmental and building regulations that hinder housing construction. This includes streamlining permitting processes, relaxing restrictions and accelerating project timelines.
  • Trump’s nominee for the Department of Housing and Urban Development (HUD), Scott Turner, has pledged to cut regulations that he says are stifling development. These efforts aim to increase housing supply, particularly in high-demand markets. (BisNow, Jan. 17)

Immigration and Labor

  • Deportations: Trump’s plans for mass deportations could have significant effects on the housing industry. Immigrants make up over 25% of the construction laborer workforce in the U.S., an industry where more workers are sorely needed—especially if affordable housing goals are to be met. (Bisnow, Jan. 17)
  • Depending on the extent of Trump’s deportation plans, CRE projects may face rising costs and delays if the construction workforce is severely affected. (NBC News, Jan. 21)
  • According to the Associated Builders and Contractors, the construction industry needs 439,000 new workers this year to meet rising demand. The need for construction resources is urgent, with Los Angeles requiring rebuilding after devastating fires and a nationwide surge in data center construction on the horizon. (Axios, Jan. 24)

Energy and Infrastructure

  • Emergency Powers: On the day Trump took office, he declared an energy emergency—giving the White House new authority to speed up the manufacture of certain products under the Defense Production Act, issue waivers on certain gasoline restrictions and restrict energy trade, among other powers—likely in service of Trump’s stated effort to “drill, baby, drill.” (The Hill, Jan. 20)
  • Data Centers: Trump also announced a $500 billion “Stargate” initiative designed to expand AI-focused data center infrastructure. The executive order prioritizes the use of fossil fuels to power these facilities and streamlines permitting processes for large-scale projects. (AP News, Jan. 22)
  • The investment could help hasten the buildout of high-demand data centers, which are limited by the availability of energy resources and infrastructure. (BisNow, Jan. 22)

Looking Ahead

With the whirlwind of activity coming out of the Trump administration and Congress, RER will continue to proactively evaluate policy developments as legislative efforts and White House implementation of executive orders progress.