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

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

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)

ENERGY STAR and IRA Tax Credits Remain Front and Center

Lawmakers put energy policy under a microscope this week, as Environmental Protection Agency (EPA) Administrator Lee Zeldin appeared before Congress regarding the agency’s FY2026 budget request and addressed concerns over the future of the ENERGY STAR program. Additionally, significant changes to the Inflation Reduction Act’s (IRA) energy tax credits were included in the One Big Beautiful Bill that passed in the House on Thursday morning.

Roundtable Advocacy

  • This week, The Real Estate Roundtable (RER) joined a coalition of real estate organizations in writing to key members of the House and Senate committees to urge continued funding for the ENERGY STAR program. (Letter)
  • As House appropriators begin drafting FY2026 spending bills, the letter urged committees to maintain funding for ENERGY STAR—highlighting the program’s bipartisan value and pro-business message. (PoliticoPro, May 21)
  • The letter emphasized ENERGY STAR’s value as a voluntary, market-based public-private partnership that helps building owners and managers benchmark building performance, reduce utility costs, and bolster grid reliability. (Roundtable Weekly, May 16)
  • The coalition letter built upon earlier communications RER and partner organizations sent to the EPA and Department of Energy (DOE) opposing a potential phaseout of the program’s foundational benchmarking platform, Portfolio Manager. (Letters: May 14 and April 4)

Hearings This Week

  • EPA Administrator Zeldin appeared before the House and Senate panels this week to defend the EPA’s FY2026 budget request. (E&E News, May 21)
  • Lawmakers voiced concerns about EPA plans to wind down or defund ENERGY STAR. (Rep. Paul Tonko (D-NY) Press Release, May 20)
  • Rep. Darren Soto (D-FL) questioned Zeldin directly about the administration’s plans. In response, Zeldin claimed that ENERGY STAR is not a statutory obligation. (E&E News, May 21). However, the real estate coalition’s letter to Congress this week, cites multiple examples of bipartisan legislation that authorizes ENERGY STAR as a federal program.
  • On Thursday, Senators Peter Welch (D-VT) and Jeanne Shaheen (D-NH) led 20 colleagues in a letter to EPA Administrator Lee Zeldin and Energy Secretary Christ Wright, urging the Trump administration to reverse its plan to eliminate the ENERGY STAR program—citing its bipartisan support, billions in consumer energy savings, and nearly 800,000 U.S. jobs it helps sustain. (Sen. Welch Press Release, May 21)

IRA Clean Energy Tax Credits

  • The One Big Beautiful Bill Act passed by the House Thursday would end IRA tax incentives for clean energy projects (like solar and storage) earlier than initially proposed. (Bloomberg, May 21)
  • Late-night modifications to the bill, accelerate the repeal of the clean energy production (45Y) and investment (48E) tech-neutral credits, limiting their eligibility to only projects that have started construction within 60 days of the bill’s enactment and which are put into service before January 1, 2029. (Utility Dive, May 22) 
  • The initial version of the bill proposed by House Republicans had a longer phase-out time, which would have allowed many of the IRA’s energy tax credits to remain until 2032. (Bloomberg, May 21)
  • The Senate may take a more measured approach. Several Senate Republicans have voiced support for maintaining IRA incentives that bolster U.S. manufacturing, enhance grid reliability, and support domestic clean energy production. (Roundtable Weekly, April 25; Semafor, May 22)

RER supports an “all of the above” energy efficiency, generation, and storage agenda and will continue to engage lawmakers and share member perspectives on effective energy policies that strengthen industry and economic growth.

Policymakers and Industry Advocates Focus on ENERGY STAR Support, Clean Energy Tax Credits

As Republican lawmakers released a sweeping tax package this week and considered federal spending for the next fiscal year, The Real Estate Roundtable (RER) and industry allies continued to advocate for the ENERGY STAR program amid efforts to cut Inflation Reduction Act (IRA) clean energy credits.

Roundtable Advocacy

  • This week, RER along with eleven industry partners submitted a letter to U.S. Department of Energy (DOE) Secretary Wright reiterating the message of support for ENERGY STAR, and the benefits of the program driving down utility costs, bolstering grid reliability, and supporting U.S. economic competitiveness by helping building owners and managers benchmark performance and cut waste (Letter, May 14) (RW, May 9)
  • In April, RER and 17 industry organizations sent a letter to EPA Administrator Lee Zeldin expressing strong support for the program. (Roundtable Weekly, April 4)
  • In a Washington Post op-ed this week, former EPA Administrator William K. Reilly (1989-1993) described the program as “government at its best,” noting it was never intended as a climate policy tool but rather a cost-saving initiative embraced by businesses, developers, and consumers alike. (Washington Post, May 14)

Hearings This Week

  • EPA Administrator Lee Zeldin testified at Appropriation Committee House and Senate hearings this week regarding the president’s budget, but offered no clarity on ENERGY STAR’s future.
  • Lawmakers on both committees voiced concern over the scope of proposed EPA spending cuts.
  • The chair of the House’s Interior-EPA spending subcommittee Mike Simpson (R-ID) told Zeldin during the hearing, the administration’s proposed 55% EPA budget cut was unlikely to be accepted. (PoliticoPro, May 15)
  • In the Senate, Appropriations Subcommittee on Interior, Environment, and Related Agencies Chair Lisa Murkowski (R-AK) called the FY2026 EPA budget proposal “unserious” and “problematic.” (Sen. Murkowski Remarks, May 15)

IRA Clean Energy Tax Credits

  • The House Ways and Means Committee advanced its reconciliation bill that proposes sweeping changes to the IRA.

  • The bill terminates or phases out most of the clean energy tax credits that were expanded or created in the IRA.
  • Over past few weeks, several Senate and House Republicans have written to leadership expressing their support for maintaining energy incentives that benefit both traditional and renewable energy sectors, and urging a more selective approach to scaling back the IRA’s tax provisions. (RW, April 25)
  • Ways and Means vice chair Rep. Vern Buchanan (R-FL), a defender of IRA clean energy credits, said in an interview Wednesday he hopes Senate Republicans will make changes to the committee’s rollback of incentives. (Politico, May 14)

The Roundtable continues to engage lawmakers to ensure balanced, effective energy policies that support industry and economic growth.

GOP Races to Shape Reconciliation Bill

The House returned this week from recess to begin critical markups, racing against Speaker Mike Johnson’s Memorial Day goal. With just over three weeks until the Memorial Day target for President Donald Trump’s ambitious reconciliation bill, GOP lawmakers are navigating contentious policy debates on tax, Medicaid, energy incentives, and spending cuts.  (Politico, May 1)

State of Play

  • On Monday, Treasury Secretary Scott Bessent held another “Big Six” meeting with Speaker Mike Johnson (R-LA), Senate Majority Leader John Thune (R-SD), Senate Finance Chair Mike Crapo (R-ID), House Ways and Means Chair Jason Smith (R-MO), and National Economic Council Director Kevin Hassett to discuss the GOP’s tax provisions in the bill.
  • Although Speaker Johnson is adamant about his Memorial Day goal, Secretary Bessent indicated July 4 might be the more practical timeline.
  • After a White House meeting between President Trump, Speaker Johnson, House Majority Leader Steve Scalise (R-LA) and key committee chairs, the GOP leadership decided to delay markups next week in the House Energy and Commerce, Ways and Means and Agriculture committees. (Punchbowl News, May 2)
  • The House Financial Services Committee voted along party lines Wednesday to approve its portion of the reconciliation package, with Chair French Hill (R-AR) expecting savings to surpass the $1 billion in cuts mandated by the congressional budget resolution.

Tax Policy

  • Business SALT: The Roundtable (RER) is still focusing heavily on preserving the full deductibility of business-related property taxes, as lawmakers look for ways to pay for new tax provisions.
  • Through meetings, outreach, and aggressive advocacy efforts, RER and the real estate industry continue to urge lawmakers to reject a revenue proposal to limit the deductibility of state and local business-related property taxes as part of the tax bill.  The proposal could have a devastating impact on property values, rents, the health of the financial system, local communities, and consumer prices.
  • 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 Cuts and Jobs Act (TCJA) and raising effective tax rates on real estate to 1970s-era levels near 50%.  (RW, April 11) 
  • SALT: House Republicans left a high-stakes meeting with Speaker Mike Johnson on Wednesday without resolving their long-running internal dispute over the $10,000 SALT deduction cap.
  • Bonus Depreciation: President Trump said on Wednesday that Republicans are going to restore bonus deprecation for only four years. “Our big, beautiful bill, we may name it that actually, will include 100 percent expensing retroactive to January 20,” And we’re gonna make that expensing for a four-year-period at a full 100 percent.” (PoliticoPro, April 30)
  • The TCJA allowed businesses to fully deduct the costs of equipment and machinery, but bonus depreciation began phasing out in 2023, decreasing 20 percent annually and fully expiring at the end of 2025.

Carried Interest

  • The House Ways and Means Committee has privately indicated it’s not inclined to close the so-called carried interest loophole in the GOP’s sweeping tax package, though conversations are still ongoing. (PoliticoPro, April 29)
  • When asked about the proposal at a press conference, Speaker Johnson said that he didn’t want to get out front of the Ways and Means Committee but that “we’ve heard from interest groups around the country, and we want to do right by them.” (PoliticoPro, April 29)
  • Rep. Hill told Politico’s Morning Money last week that the policy “is a major source of economic growth, jobs, that impacts every community in the country — it’s not a loophole.” (Politico, May 1)
  • Since carried interest and its tax treatment first emerged as a controversial political issue in 2007, RER has consistently opposed legislative proposals to tax all carried interest at ordinary income rates.
  • RER’s Ryan McCormick told Bloomberg this week that taxing real estate investors’ “sweat equity” at higher income rates would hit projects in low-income and high-risk areas hardest. He added that, small real estate entrepreneurs take on significant risk when developing low-income areas, and these investors face similar risks as long-term equity holders and should be taxed at the 20 percent capital gains rate—a point he said has resonated with lawmakers. (Bloomberg, April 29)

IRA Energy Tax Credits

  • As the House Ways and Means Committee, prepares to markup its portion of the reconciliation bill in the coming weeks, House Ways and Means Chair Jason Smith (R-MO) has said the fate of the Inflation Reduction Act (IRA) is one of a few sticking points that the committee still has to figure out. (PoliticoPro, May 1)
  • Internal party divisions persist, highlighted by recent opposing letters from GOP lawmakers. Yesterday, Chair Smith received two letters from opposing House Republicans arguing their cases for full repeal of all energy tax credits under the IRA and preservation of the law.
  • The coalition of 26 House Republicans is urging GOP leaders to preserve electricity tax credits and protect the IRA’s transferability provision, which allows developers to finance clean energy projects by selling their tax credits. (PoliticoPro, May 2)
  • Nothing is decided on the IRA,” said Rep. Vern Buchanan (R-FL), the number two Republican on Ways and Means. “The chips are on the table and a lot of that is going to happen next week.” (PoliticoPro, May 2)
  • In recent weeks, several Senate and House Republicans have written to leadership expressing their support for maintaining energy incentives that benefit both traditional and renewable energy sectors, and urging a more selective approach to scaling back the IRA’s tax provisions. (RW, April 25)

Challenges Ahead

  • The Energy and Commerce Committee faces internal GOP friction over Medicaid reductions, balancing fiscal hawks demanding significant cuts against moderates worried about political fallout. (Politico, May 1)
  • Majority Leader Thune (R-SD) highlighted the looming debt ceiling as a “hard deadline,” adding pressure to lawmakers juggling complex fiscal decisions.
  • Upcoming Treasury forecasts on the debt ceiling “X-date” could further adjust legislative schedules, as lawmakers await crucial financial projections.
  • Both House and Senate Republicans want to raise the debt limit in a budget reconciliation measure, something that President Trump has called for as well. (PoliticoPro, April 29)

White House Releases Budget

  • The White House on Friday released President Trump’s fiscal year 2026 budget request, outlining $163 billion in proposed reductions to federal spending that would start on October 1. (WSJ, May 2)
  • While presidential budgets outline an administration’s policy priorities, the figures rarely reflect the final appropriations determined by Congress. (Axios, May 2)
  • The FY2026 budget is expected to build on cuts already implemented by President Trump and adviser Elon Musk’s Department of Government Efficiency—most notably, reductions in the federal workforce. (AP News, May 2) The Trump proposal is already running into early resistance on Capitol Hill, including from Republicans. (Politico, May 2)
  • As reconciliation efforts progress, balancing the administration’s budgetary goals with legislative feasibility will be a challenge.

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.

What’s Ahead: Reconciliation Talks on Capitol Hill

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.

Congressional Republicans Pass Budget Resolution, Move One Step Closer to a Final Tax Bill 

This week, House Republicans approved a major budget framework that moves President Trump’s tax and spending agenda closer to the finish line and set the stage for Congressional Committees to “mark up” the key details in May—including tax cuts, revenue raising provisions, and spending reductions.  

State of Play

  • Despite tight margins, on Thursday House Speaker Mike Johnson (R-LA) was able to corral his caucus into passing a new budget resolution that was approved by the Senate over the prior weekend, bringing the president’s goal of “one big beautiful bill” closer to fruition. (WSJ, April 10)
  • Senate Republicans adopted a budget resolution on Saturday morning after an all-night voting marathon. Senate Republicans unveiled their 70-page budget blueprint last Wednesday.  It lays out a fiscal framework for implementing Trump’s border security, defense, energy and tax priorities. (CBS News, April 9)
  • The budget outline punts many of the hard decisions for lawmakers to hammer out later in the tax-cut negotiations. That could lead to a standoff between the House and Senate at the end of the process, where several Senators are resistant to large cuts in safety-net programs while House conservatives are seeking significant deficit reduction. (Bloomberg, April 10)

Next Steps and Implications for CRE

  • Lawmakers in the House and Senate now turn their attention to “marking up” their respective Committee instructions, as provided in the budget resolution.  The House and Senate instructions do not align, so their differences will have to be resolved later in the process.
  • The budget resolution allows the House Ways and Means Committee to pass a tax cut of up to $4.5 trillion, using a current law budget baseline.   The resolution allows the Senate Finance Committee to pass a $1.5 trillion tax cut, but assumes a current policy baseline in the Senate.  The practical effect of the current policy baseline is to increase the size of the Senate tax cut to $5.3 trillion.

  • On the spending side, the budget resolution directs the House Committees to identify at least $1.5 trillion in spending cuts.  The spending reductions for the Senate Committees are de minimis ($4 billion spread across four committees).
  • Besides tax cuts and spending reductions, the resolution calls for increased spending on the military ($150 billion), along with another $175 billion for border security and immigration enforcement work. (Politico, April 10)
  • The debt limit fight will also shape the legislative timeline. House and Senate Republicans have different reconciliation instructions for increasing the nation’s borrowing authority. (Punchbowl News, April 11)
  • Through meetings, outreach, and aggressive advocacy efforts, The Roundtable and the real estate industry continue to urge lawmakers to reject a revenue proposal to limit the deductibility of state and local business-related property taxes as part of the tax bill.  The proposal could have a devastating impact on property values, rents, the health of the financial system, local communities, and consumer prices.
  • In addition, members in both chambers continue to raise concerns about repealing clean energy tax credits from the Inflation Reduction Act (IRA) as part of the upcoming budget reconciliation bill. This week, four senators sent a letter to Senate Republican Leader John Thune warning that a full repeal would undermine investment, hurt businesses, and threaten jobs. (Punchbowl News, April 11) (RW, March 14)
  • At our Spring Roundtable Meeting, House Ways and Means Chairman Jason Smith (R-MO) engaged with RER members, acknowledging their concerns about proposals to change the treatment of business SALT and carried interest. He emphasized the importance of using data to inform policy discussions and commended RER for its impactful work educating policymakers on the issues.

As the budget process enters its next phase, RER will continue to advocate for key real estate priorities and inform members on policy updates from Capitol Hill and their impact on the industry. 

Biden Administration Announces $240 Million of IRA Grants for Building Efficiency Upgrades

Department of Energy building in Washington, DC

On August 27, the U.S. Department of Energy announced plans to allocate $240 million from the Inflation Reduction Act (IRA) to 19 state and local governments to help communities adopt energy-efficient building codes and retrofit structures to meet updated standards. (Politico, Aug. 27)

Key Details

  • The initiative is expected to reduce utility costs for multifamily residents and commercial building operators, enhance grid resilience, and lower emissions.
  • “DOE is helping jurisdictions move further and faster in implementing stronger codes that will provide Americans safer, healthier, and more comfortable places to live, work, and play,” said U.S. Secretary of Energy Jennifer Granholm. (US-DOE Press Release, Aug. 27)
  • The 19 selected projects will receive direct technical assistance to support the adoption and implementation of traditional energy codes, zero energy codes, and building performance standards.
  • The grants also align with the Justice40 Initiative, designed to direct 40% of federal investments to disadvantaged communities overburdened by pollution.
  • This latest announcement follows an initial $90 million awarded to 27 projects last year from the 2021 Infrastructure Investment and Jobs Act, commonly known as the bipartisan infrastructure law, to implement updated building codes. (Politico, Aug. 27)
  • Chosen jurisdictions must go through a “negotiation process” with US-DOE before the agency ultimately awards Round 1 grants. Applications for the second round of IRA funding will close on Sept. 13. (US-DOE Press Release, Aug. 27)

What’s Next

The Roundtable is developing a “primer” for real estate stakeholders, highlighting key issues in the state and local BPS trend, with a release planned for this fall.

IRS Regulations Clarify Rules for Transferring Energy Tax Credits

IRS building in Washington, DC

On Thursday, the IRS issued a package of final regulations on the transferability of tax credits for rooftop solar and other clean energy investments under the Inflation Reduction Act (IRA). (Final regulations and IRS news release, April 25)

Transferability

  • The final rules relate to the transferability of qualifying credits to third-party credit purchasers in the context of partnerships and pass-throughs, as well as potential credit recapture events and penalties for excessive credit transfers. (PoliticoPro, April 25 and Tax Notes, April 26)
  • The ability to transfer clean energy credits allows REITs to participate in the new IRA tax incentive regime. The final regulations address several concerns raised by The Roundtable in its July 2023 comment letter, particularly in the context of REIT investments. For example, the regulations clarify that as-yet-untransferred credits are disregarded for purposes of the REIT 75% asset test.
  • Unfortunately, the final regulations did not reverse the Biden administration’s prior guidance that generally limits the ability of mixed real estate partnerships (taxable and tax-exempt partners) to maximize their credit benefits through a combination of credit transfers and direct payments.  Mixed partnerships can still claim the new tax credits, but may lose some of the financial value due to the specific tax attributes of the individual partners. 
  • Treasury indicated additional guidance is likely to help taxpayers meet the cumbersome credit registration requirements and ensure taxpayers can qualify for the underlying incentives. The IRS also updated its FAQs on tax credit transfers on April 25.  

The Roundtable’s Energy Credit Transferability/Direct Pay Working Group is analyzing the regulations and assessing their impact on CRE.

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Roundup: Lawmakers Seek Action on Affordable Housing Incentives, Senators Push Treasury for EV Recharging Station Guidance, and Joint Tax Committee Releases Long-Awaited “Bluebook”

House Ways and Means Committee members sent a bipartisan letter to House Leadership last Friday urging consideration of the Affordable Housing Credit Improvement Act (H.R. 3238) in any potential tax legislation brought to the floor in 2024. (Letter, Dec. 15)

AHCIA Provisions

  • Since the introduction of H.R. 3238 in May, the bill has garnered strong bipartisan support with 200 cosponsors—100 Republicans and 100 Democrats. (summary of AHCIA)
  • Representatives Darin LaHood (R-IL), Suzan DelBene (D-WA) and others wrote to House leadership urging inclusion of two key changes to the low-income housing tax credit (LIHTC) in any tax legislation that emerges (Tax Notes, Dec. 15):
  • Restoring the 12.5% increase in state allocation of housing credits that expired at the end of 2021, and
  • Lowering the threshold of private activity bond financing (currently 50%) that a project must meet in order to qualify for the maximum amount of 4% housing credits. 
  • The competitive and over-subscribed LIHTC program is a critical federal tool for addressing the widespread lack of affordable rental housing. The arbitrary 50% bond financing requirement creates a barrier to affordable housing production, especially for the growing number of states that fully utilize their private activity bond cap. (Roundtable Weekly, May 19)

Senators Push Treasury to Finalize Rules for EV Recharging Infrastructure Incentives

  • The Roundtable previously submitted detailed comments seeking guidance requesting greater clarity for real estate owners and others contemplating new investments in EV recharging stations.
  • The Inflation Reduction Act generally limits the credit to facilities installed in rural or low-income census tracts. The letter encourages Treasury to adopt an inclusive definition that effectively covers any tract if 10 percent or more of the “census blocks” inside the tract are rural. 
  • The Senators’ letter includes other requests that align with the Roundtable’s comments and aims to help the administration realize its goal of deploying 500,000 chargers by 2030. For example, the Senators urge that the rules treat each port at a refueling property as a “single item” that effectively qualifies for its own credit.

Joint Tax Committee Releases “Bluebook” Describing Recent Tax Laws

Joint Committee on Taxation logo
  • On Friday, Congress’s nonpartisan Joint Committee on Taxation released its long-awaited explanation of recently enacted tax laws.
  • The so-called “JCT Bluebook” is often relied upon by Treasury officials and federal courts when implementing and interpreting tax statutes. 

Congress reconvenes in Washington the week of January 8, where they will face a fast-approaching deadline for fiscal year 2024 spending bills and additional priorities, including a tax package.

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