President Trump today signed a spending measure to fund the government until Dec. 21, buying time for policymakers to negotiate over the key issue of funding a border wall on the Mexican border.  (RollCall, Dec. 7)

The  115th Congress is now scheduled to end on Dec. 21.

• Today was the original deadline for funding the government's FY2019 budget (through Sept. 30, 2019).  The short-term Continuing Resolution passed by Congress this week accommodated observances in honor of former President George H. W. Bush.  The extension includes funding for the National Flood Insurance and EB-5 investment programs until Dec. 21.
• Policymakers will now focus on an appropriations package affecting several government agencies, including the Department of Homeland Security.  If an agreement on funding is not reached for FY2019, they may pass another short-term extension or face a partial shutdown.
• A key issue in the funding negotiations is construction of a wall along the U.S.-Mexican border.  The president is scheduled to meet with Senate Minority Leader Chuck Schumer (D-NY) and House Minority Leader Nancy Pelosi (D-CA) on Tuesday about his initial request for at least $5 billion to build the wall.  Trump told a law enforcement conference today, "Congress must fully fund border security in the year-end funding bill."  (NBC News and Fox News, Dec. 7)
• Schumer said yesterday that a bipartisan Senate plan for $1.6 billion in border security funding does not include money for a wall, adding that the money "can only be used for fencing" and technology security features.  Pelosi, who is likely to become the next speaker of the House, yesterday referred to the construction of a wall as "immoral, ineffective, and expensive." (AP, Dec. 6)
• Sen. Lindsey Graham (R-S.C.) met with Trump this morning, tweeting that the president "indicated he supports" adding a bipartisan criminal justice reform bill to the year-end spending measure - potentially adding another complicating factor to negotiations. (CNBC)

Separately, a House GOP tax bill introduced last week, which includes tax "extenders" and technical corrections of importance to commercial real estate, faces an uncertain future in the remaining weeks of the lame duck session.  Congressional tax-writers and leaders do not appear to be any closer to an agreement that would include certain tax provisions in the end-of-year spending bill, such as a technical correction related to the depreciation schedule for nonresidential, interior real estate improvements.  (Roundtable Weekly, Nov. 30 and BGov, Dec. 7)

The 115^th Congress is scheduled to end on Dec. 21.

A Dec. 4 report by Heritage Foundation Economist Stephen Moore finds that "promoting and facilitating foreign tourism to the United States can be an effective way to increase American jobs and national output while reducing the nation's trade deficit."

According to Tourism to the U.S. Means More Growth, More Jobs, Lower Trade Deficit by Stephen Moore, when international travelers visit the United States, their spending at hotels, retail stores, attraction properties and restaurants totals nearly $250 billion per year. This economic activity supports approximately 1.2 million U.S. jobs and at least $30 billion in worker pay and benefits.

• Moore advised President Trump during the 2016 campaign and worked closely with Larry Kudlow, now the chief White House economic adviser. (Washington Examiner, Dec. 4)
• Moore's analysis shows the impact of foreign travel on the U.S. economy and how the growth rate of visitor spending in the U.S. has fallen in comparison to other nations in recent years. 
• According to the report, when international travelers visit the United States, their spending at hotels, retail stores, attraction properties and restaurants totals nearly $250 billion per year. This economic activity supports approximately 1.2 million U.S. jobs and at least $30 billion in worker pay and benefits.
• The report also shows that tourism from abroad lowers the trade deficit.  In 2017, international tourism generated a $77 billion trade surplus — more than any other industry except for financial services — which reduces the U.S. overall trade deficit by an equivalent amount. (Tourism to the U.S. Means More Growth, More Jobs, Lower Trade Deficit by Stephen Moore)
• The Roundtable is part of the Visit U.S. coalition, which advocates for reauthorization of the Brand USA program — a public-private partnership that markets the United States as a travel destination to international travelers.  The Roundtable joined a coalition of nearly 600 organizations last week in a letter urging Congress to pass legislation that puts Brand USA funding at risk.  (Roundtable Weekly, Nov. 30)
• Today, Brand USA operates at a 29:1 return on investment-a program with undeniable economic benefits at no cost to the taxpayer.   If Congress does not renew Brand USA this year, $17.7 billion in visitor spending, $5 billion in tax revenue, and 51,000 American jobs generated are at risk. (Return On Investment Analysis, Oxford Economics and Visit U.S. Letter to Congressional Leadership, Nov. 30) 

The economic importance of foreign travel and tourism to the United States' economy and commercial real estate industry was the focus of a panel discussion during The Roundtable's 2018 Annual Meeting. (Roundtable Weekly, June 15, 2018).

The Real Estate Roundtable's support for a federal proposal that would implement modified capital rules for High Volatility Commercial Real Estate (HVCRE) loan exposures is detailed in a  Nov. 26 comment letter to three banking agencies.  The Agencies — tasked with developing a rule consistent with Section 214 of the Economic Growth, Regulatory Relief, and Consumer Protection Act (S. 2155) to clarify the capital treatment of HVCRE Acquisition, Development, or Construction (ADC) loans — invited comments on their Notice of Proposed Rulemaking. (Roundtable Weekly,  May 25)

The  Real Estate Roundtable's support for a federal proposal that would implement modified capital rules for High Volatility Commercial Real Estate (HVCRE) loan exposures is detailed in a  Nov. 26 comment letter  to three banking agencies..

• The Roundtable's comment letter to the Office of the Comptroller of the Currency; the Board of Governors of the Federal Reserve System; and the Federal Deposit Insurance Corporation states the current implementation proposal "more realistically aligns the requirements for HVCRE loans on commercial real estate projects with the actual periods of development or construction risk."  The letter also notes that when the final proposal is implemented, it "will aid economic growth and job creation, while maintaining adequate capital levels to manage the risks associated with ADC lending."  (Roundtable Comment Letter, Nov. 26)
• The changes to the capital rules address key deficiencies in the agencies' prior regulations governing the criteria for HVCRE or HVADC loans by providing the following modifications and clarifications:
• The 15% equity requirement would be revised to expressly include contributed land/property at the appreciated  land value as determined by a FIRREA appraisal and bank review (versus the cost basis under the current rule).
• Clarifies that loans made to acquire existing property with rental income and/or do cosmetic upgrades and other improvements don't trigger the capital penalty.
• A new exemption would be added to the HVCRE rule covering acquisition/refinancing loans for performing income producing properties.
• Allows borrowers to use internally generated capital in the project and, once the development/construction risk period has passed, outside the project, rather than forcing them to refinance the loan (possibly away from the original lender).
• All ADC loans made prior to January 2015 would be grandfathered and do not have to satisfy current HVCRE exemption criteria.
• Banks would able to withdraw HVCRE status prior to the end of an ADC loan's term.
• Roundtable President and CEO Jeffrey DeBoer also suggests in the letter that periodic industry forums be held on the implementation of the capital rules. "This feedback would allow the Agencies to appropriately address any possible unintended economic consequences resulting from the regulation by supervisory personnel or by the institutions they supervise that might threaten the soundness of the banking system or the stability of the real estate lending market," DeBoer added.
• The Roundtable's letter is supported by The American College of Real Estate Lawyers (ACREL) and The American College of Mortgage Attorneys (ACMA).  (Joint Letter of Support, Nov. 27)

The Agencies' HVCRE proposal was one of the issues discussed at this week's meeting of The Roundtable's Real Estate Capital Advisory Committee (RECPAC).  Since 2015, The Roundtable's HVCRE Working Group and industry coalition partners have played a key role in advancing specific reforms to the HVCRE Rule.  (Roundtable HVCRE Comment Letter, March 2).