2018 Ushers In Sweeping Tax Code Changes and a Loaded Congressional Agenda Under Threat of Jan. 19 Government Shutdown
With sweeping tax code changes enacted last month now in effect, both chambers of Congress are returning to a packed legislative to-do list and looming policy deadlines – including the expiration of the latest round of government funding on Jan. 19.
With sweeping tax code changes enacted last month now in effect, both chambers of Congress are returning to a packed legislative to-do list and looming policy deadlines.
As businesses and individuals adjust to the new tax law's various provisions, it is expected that the IRS will issue guidance on the largest change to the tax code in 31 years – including the 20 percent deduction for qualified business income; limitation on deductibility of business interest and losses; and deprecation and expensing of assets. The Roundtable will participate throughout 2018 in the regulatory and rulemaking process as technical questions and detailed tax guidance affecting commercial real estate are addressed by policymakers in Washington. (Roundtable Weekly, Dec. 22)
This week, congressional leaders and Trump Administration officials met to discuss the need for a government spending measure to avoid a shutdown when the current "Continuing Resolution" (CR) expires Jan. 19. Policymakers will seek to link other issues to a funding deal, such as overhauling the nation's immigration system; funding for a border wall; and the status of "Dreamers" – undocumented immigrants brought to the country as children.
Other pressing policy issues needs that may be wrapped into the spending debate include disaster relief, electronic surveillance laws and the Children's Health Insurance Program. Senate Minority Leader Chuck Schumer (D-NY) said on the Senate floor last month, "We can't leave any of those issues behind." (BNA, Jan. 3)
The budget also affects issues of importance to CRE such as the National Flood Insurance and EB-5 foreign investment programs.
Since only eight scheduled legislative days are available for Congress and the Administration to agree on a new spending measure before the Jan. 19 expiration, another short-term CR may be passed to keep the government open – or a shutdown will result.
This week also saw two new Democrats join the Senate, narrowing the Republican majority to 51-49. After Sens. Doug Jones (D-AL) and Tina Smith (D-MN) were sworn in yesterday, the ability of Senate Majority Leader Mitch McConnell (R-KY) to attract 60 votes to pass most legislation in the Senate will become a greater challenge.
In the House, Republican Speaker Paul Ryan (WI) has a 239-193 majority, yet pushback from certain Republican coalitions may necessitate Democratic votes to pass legislative initiatives.
Rep. Mark Meadows (R-NC), the chairman of the conservative House Freedom Caucus, recently told Bloomberg, "People are not going to come back singing the Sound of Music together. January is going to be contentious." (Bloomberg Government, Jan..2)
The upcoming Roundtable State of the Industry Meetings will take place just days before President Trump's first State of the Nation address on Jan. 30, when he may emphasize his infrastructure initiative.
Additionally, House Transportation and Infrastructure Committee Chairman Bill Shuster (R-PA) announced this week that he will not seek re-election, but emphasized he will be dedicated to passing an infrastructure bill this year. Shuster, who addressed the Roundtable last spring (see Roundtable Weekly, April 7, 2017) said upon announcing his retirement, "About a week or so ago I had a private meeting with the president at the White House. Now when I say private meeting, it was the president and I in the Oval Office with his senior advisers and some of my senior people, and we talked about the infrastructure bill. He's very excited. He seems to be ready to go, as we are, and so I think we're going to have a good working relationship as we move forward." (Washington Examiner, Jan. 2.)
President Trump met yesterday with governors and local government leaders about nationwide infrastructure improvements. Trump also will meet with Republican congressional leaders this weekend to discuss making infrastructure a top legislative priority this year. According to USA Today, the Administration will issue a new proposal later this month that would shift infrastructure project responsibilities to states and private investors by leveraging 200 billion dollars in federal funding to leverage 1 trillion in improvements. (USA Today, Jan. 5)
Details of the new tax overhaul law, along with the budget outlook, immigration, infrastructure and other policy topics will be discussed in detail during The Roundtable's State of the Industry and Policy Advisory Committee meetings on Jan. 24-25 in Washington. The meetings will take place just days before President Trump's first State of the Nation address on Jan. 30, when he may emphasize his infrastructure initiative.