Partnering With Democrats?

White House Chief of Staff Reince Priebus floated the possibility of working with Democrats on Fox News Sunday this weekend. “…I think it's time for our folks to come together, and I also think it's time to potentially get a few moderate Democrats on board,” he said. The president as well has dropped similar hints over the weekend via Twitter.

Such a coalition would change the upcoming legislation significantly — assuming that is, the Democrats decide to play along and assuming Trump is serious about this in the first place. Both are very big assumptions.

But let's say they are. The process will still look very much like it did last week — although hopefully more time will have been spent in crafting legislation. In other words, expect last minute changes to be added or subtracted to make concessions — changes that could hold major consequences for real estate.

That is what happened earlier last week when Republicans were seeking votes for the health care repeal and replace measure: An amended version was introduced that included an accelerated repeal of the 3.8% net investment income tax, which applies to both real estate rental income and real estate capital gains, according to the Real Estate Roundtable. The repeal would have been effective retroactively to Jan. 1, 2017, rather than 2018.

It should also be said that there is no guarantee that a comprehensive tax measure would be passed in the end, although the Trump Administration will be very hard pressed to make it happen. There is speculation that the measure might have to be far more moderate than originally envisioned after last week's debacle. In general, any changes to the US tax code is a very fraught process even in the best of political times — It is not surprising that the last major reform to the tax code was in 1986. Also, the Treasury Department, which will be taking the lead for the Administration on this issue, is still understaffed.

Movement on EB5 Expected This Week

One bright spot divorced from last week's drama: it appears as though Congress is taking the necessary steps in preparation for EB-5 legislation instead of allowing it to be folded into another Omnibus spending bill. This is according to Jim Butler, chair of the Global Hospitality Group and Chinese Investment Group with Jeffer Mangels Butler & Mitchell. “There is great optimism that [this week] there will be time for Congressional staffers to meet with industry members to discuss and refine proposed legislation” he tells GlobeSt.com.

“By the end of this week or the beginning of next a bill will be introduced that will be more likely to be acceptable to everyone,” he says.

And what a welcome relief that will be.

WASHINGTON, DC–It is an understatement to say that the collapse of the Republican measure to repeal and replace the Affordable Care Act on Friday was not part of the grand vision put forth by President Trump and the Republican party at the beginning of the year. Following the expected passage of the American Health Care Reform Act, Congress was going to tackle comprehensive tax reform and then move on to Trump's plan to invest in the nation's infrastructure. The sequence was important: the $1 trillion in expected tax savings from the repeal of Affordable Care would make comprehensive tax reform that much easier to achieve. And so on with infrastructure.

With the Republican healthcare reform measure pulled, this schedule is thrown off and the hoped-for savings now largely out of reach.

That is the least of it, though. In the last forty-eight hours Washington's political order has been thrown into disarray. Does the president still have trust in House Speaker Paul Ryan to move his legislative agenda forward? Can Ryan move it forward, for that matter, as the old schism between the Freedom Caucus and establishment Republicans is clearly still alive and well. Will Trump continue to exclusively embrace Republicans in his attempts to get legislation passed or will he seek to cut deals with the Democrats in order to bypass this most conservative faction of the House? If so, wouldn't that mean the timeline is not quite as tight since it is no longer necessary to rush these measures through the budget reconciliation process?

Make no mistake however: Trump's agenda is moving forward. The only question is, how smoothly and with what partners.

Partnering With Democrats?

White House Chief of Staff Reince Priebus floated the possibility of working with Democrats on Fox News Sunday this weekend. “…I think it's time for our folks to come together, and I also think it's time to potentially get a few moderate Democrats on board,” he said. The president as well has dropped similar hints over the weekend via Twitter.

Such a coalition would change the upcoming legislation significantly — assuming that is, the Democrats decide to play along and assuming Trump is serious about this in the first place. Both are very big assumptions.

But let's say they are. The process will still look very much like it did last week — although hopefully more time will have been spent in crafting legislation. In other words, expect last minute changes to be added or subtracted to make concessions — changes that could hold major consequences for real estate.

That is what happened earlier last week when Republicans were seeking votes for the health care repeal and replace measure: An amended version was introduced that included an accelerated repeal of the 3.8% net investment income tax, which applies to both real estate rental income and real estate capital gains, according to the Real Estate Roundtable. The repeal would have been effective retroactively to Jan. 1, 2017, rather than 2018.

It should also be said that there is no guarantee that a comprehensive tax measure would be passed in the end, although the Trump Administration will be very hard pressed to make it happen. There is speculation that the measure might have to be far more moderate than originally envisioned after last week's debacle. In general, any changes to the US tax code is a very fraught process even in the best of political times — It is not surprising that the last major reform to the tax code was in 1986. Also, the Treasury Department, which will be taking the lead for the Administration on this issue, is still understaffed.

Movement on EB5 Expected This Week

One bright spot divorced from last week's drama: it appears as though Congress is taking the necessary steps in preparation for EB-5 legislation instead of allowing it to be folded into another Omnibus spending bill. This is according to Jim Butler, chair of the Global Hospitality Group and Chinese Investment Group with Jeffer Mangels Butler & Mitchell. “There is great optimism that [this week] there will be time for Congressional staffers to meet with industry members to discuss and refine proposed legislation” he tells GlobeSt.com.

“By the end of this week or the beginning of next a bill will be introduced that will be more likely to be acceptable to everyone,” he says.

And what a welcome relief that will be.