Policymakers Claim Deal is Close on Bipartisan “Physical” Infrastructure Proposal; Roundtable Chair John Fisk Addresses Infrastructure Investment
Senate Hearing Focuses on Need for Federal Pandemic Risk Insurance Program
Senate Finance Committee Chair Introduces Bill to Restrict 20% Pass-through Business Income Deduction
Roundtable Weekly
July 23, 2021
Policymakers Claim Deal is Close on Bipartisan “Physical” Infrastructure Proposal; Roundtable Chair John Fisk Addresses Infrastructure Investment

Members of a bipartisan group of senators working on a $579 billion “physical” infrastructure proposal said Thursday that final details may be announced as early as July 26, after a procedural vote in the Senate earlier this week failed to allow debate on the evolving measure. (Bloomberg, July 22)

Bipartisan Deal

  • The bipartisan group initially announced their tentative, broad infrastructure agreement with President Biden on June 24. Remaining issues to resolve are finalizing how to pay for the package including measures affecting funding for transit systems. (Roundtable Weekly, June 25 and BGov, July 22)
  • One of the 22 Senate negotiators, Sen. Joe Manchin (R-WV), said, “We had an agreement on 99% when we walked out yesterday afternoon. The pay-fors are pretty much lined up.” (Bloomberg, July 22)
  • Another negotiator, Sen. Mitt Romney (R-UT) added, "I think we’ll get it done over the weekend, and then I hope that we get another cloture vote next week, and that will succeed." (PolitcoPro, July 22)
  • The bipartisan proposal, if eventually translated into legislation, would need at least 10 Republican votes in the 50-50 Senate to avoid a filibuster and start debate on the measure.


  • If the deal fails, Democrats may consider paring the “hard” infrastructure proposal with a separate, $3.5 trillion “human” infrastructure plan that addresses climate change, child care and health care. A combined package could be pushed through Congress as part of a budget “reconciliation” process that would bypass the need for Republican votes. (CNBC, July 22)
  • Senate Majority Leader Chuck Schumer (D-NY) on July 21 said he may delay the chamber’s August recess to pass both infrastructure packages. (Roll Call, July 21)
  • House Speaker Nancy Pelosi (D-CA) yesterday reiterated that the House will not act on the Senate's bipartisan infrastructure plan until the upper chamber also passes a reconciliation bill.  (Transcript of July 22 press conference)

Infrastructure Investment Analysis 

CRE & Infrastructure

  • Roundtable Chair John Fish (Chairman and CEO, Suffolk), above right, on July 21 discussed infrastructure issues, the impact of the pandemic on commercial real estate and the industry’s leadership role in national policy issues with Roundtable member Willy Walker (Chairman and CEO of Walker & Dunlop), left, on the Walker Webcast. (Bisnow and Connect, July 21)
  • Fish noted that economic opportunities resulting from investments in physical infrastructure are equally as important as investment in social infrastructure. Fish noted Boston’s “Big Dig” transportation infrastructure project as an example of a large-scale public investment that returns enormous benefits for the larger community.
  • “Boston made an almost $19 billion investment with the federal government in the Big Dig, and we have received probably $100 billion in returns today so far,” Fish said. “If we didn't make those investments in the Big Dig back in the 1990s, early 2000s, the city of Boston would not be growing the way that it is right now.” (Walker Webcast and Bisnow)

Fish also commented on The Roundtable’s role in Washington and the importance of CRE industry leadership in the climate change debate. He emphasized that the vast majority of US buildings were constructed in the last century — and that with 40% of US energy use attributable to owners, tenants, and other occupants of residential and commercial structures, now is the opportune time for the industry to reimagine its positive role for future generations. (See 34:45 in the Walker Webcast) 

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Senate Hearing Focuses on Need for Federal Pandemic Risk Insurance Program

Senate lawmakers heard testimony yesterday about the importance of establishing a federal pandemic risk / business continuity insurance program during a hearing entitled “Examining Frameworks to Address Future Pandemic Risk.” (See webcast and witness statements).

Public-Private Backstop

  • Senator Bob Menendez (D-NJ), above, chairman of the Senate Banking Subcommittee on Securities, Insurance, and Investment, stated in his opening remarks, “We must determine the extent to which businesses, private insurance providers, and the federal government are able to share the risk of losses due to a pandemic. Each presents different ideas on how much risk is borne by the private sector versus the federal government, and the approach to paying claims.”
  • Menendez also noted that of the eight million businesses with commercial insurance policies with business interruption coverage, 83 percent also carried a clause excluding claims from viral contamination, disease, or pandemic – and that 82 percent of claims have been closed without payment. (Menendez remarks)

Roundtable & Coalition Efforts

  • The Roundtable is part of the Business Continuity Coalition (BCC), which offered testimony during the hearing on how a public-private backstop program for pandemic risk insurance – similar to the Terrorism Risk Insurance Act (TRIA) program – is urgently needed. Charles Landgraf of Arnold & Porter, above, testified on behalf of the BCC. (See written testimony and video at 1:00:20)
  • The coalition includes 44 trade associations and major companies representing more than 70 million workers from healthcare and dining/hospitality to real estate, construction, finance, manufacturing, media and film, live entertainment, professional sports and professional services.
  • The BCC’s testimony emphasized how pandemic risk is possibly the largest unhedged risk exposure in the U.S. economy. The coalition’s statement also shows how a precedent for government involvement in insurance markets exists for a broad range of risks – including terrorism (TRIA), flood (NFIP), and crop risk (FCIC) – where private markets fail to provide the economy with the coverage it needs.
  • A detailed, section-by-section description of the BCC Recommended Proposal urges the design of any pandemic risk insurance program to address core principles, including: scope, availability and affordability; private insurer utilization; a pooling alternative for offerinf non-damage business interruption insurance (NDBI) coverage; stop-loss and quota-share protection; and utilization of reinsurance and capital markets.
  • A New Jersey small business owner, Adenah Bayoh, testified on behalf of the National Restaurant Association (NRA) in support of the BCC proposal, stated, "This country needs a Pandemic Risk Insurance Program to ensure that Main Street businesses and employees have certainty and continuity in the ability to navigate the impact of a future pandemic."

Both Senate and House subcommittees played important role in the seven-year extension of the Terrorism Risk Insurance Program (TRIP) enacted in 2020. (Roundtable Weekly, Dec. 13 and Dec. 20, 2019)

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Senate Finance Committee Chair Introduces Bill to Restrict 20% Pass-through Business Income Deduction

Senate Finance Committee Chairman Ron Wyden (D-OR), above, unveiled new legislation this week that would phase out the 20-percent pass-through business income deduction for taxpayers earning more than $400 thousand a year. (CNBC, July 21 and Wyden news release, July 20) 

  • The current deduction for qualified business income (Section 199A) allows certain taxpayers, such as sole proprietors, partners in partnerships and shareholders of S-corporations, to deduct up to 20% of their net business income.
  • The deduction was enacted as part of the 2017 Tax Cuts and Jobs Act (TCJA), which  reduced the corporate tax rate by 40%. Since the vast majority of American businesses are taxed as pass-throughs, the deduction ensured that the benefits of TCJA were more evenly distributed.

Why It Matters

  • Section 199A is currently scheduled to expire at the end of 2025. Wyden’s proposed overhaul, if enacted, would start with the 2022 tax year. (CQ and BGov, July 20 | one-page summary  | text of the bill)
  • Wyden estimated that his Small Business Tax Fairness Act could raise $147 billion in revenue, based on a Joint Committee on Taxation analysis from 2018. The Senate Finance Committee Chairman also noted that he may add the bill to the Biden administration’s $3.5 billion “human” infrastructure proposal later this fall. (Tax Notes, July 21) 

Roundtable Response 

  • The Roundtable, as part of a broad business coalition, last month expressed strong opposition to any reductions or repeal of the Section 199A deduction – including phasing it out above a certain income threshold – to the leadership of the tax-writing Senate Finance and House Ways and Means Committees. (Coalition letter, June 22 and Roundtable Weekly, June 25) 
  • The coalition’s letter emphasized how nearly 40 percent of individually- and family-owned businesses closed their doors during the COVID pandemic – and that Section 199A provided critical tax relief during that time.
  • “There are nearly two million real estate partnerships with more than 8.6 million partners in the United States,” said Real Estate Roundtable President and CEO Jeffrey DeBoer, above, in response to the new legislation. “Among other benefits, the pass-through deduction allows these real estate businesses to focus on creating jobs, investing in underserved neighborhoods, and creating productive, sustainable properties that support the local tax base. Congress should permanently extend the pass-through deduction. The proposed restrictions are a step in the wrong direction.”   

President Biden proposed phasing out the Section 199A deduction for qualified business income above $400,000 during his presidential campaign. However, that proposal was not included in his Build Back Better agenda released earlier this year or his formal budget proposal. (Tax Notes, July 21) 

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