Earlier this month, President Joe Biden unveiled a $2.3 trillion infrastructure proposal known as the American Jobs Plan, which centers on investing in infrastructure, affordable housing, and green energy - and employs tax policy changes to partially fund the ambitious set of proposed initiatives. The White House has also unveiled a roughly $1.8 trillion spending and tax plan, the American Families Plan, ahead of the President's joint address to Congress this evening. It will be at least partially funded by some tax hikes on high-income Americans and investors, already provoking intense debate in Congress.

Biden's infrastructure and tax announcements are just the beginning of what will be a long and likely contentious process of trying to enact variations of the President's proposals into law. With very tight majorities in both the House and Senate, the administration and congressional leaders must reach a workable consensus that garners enough support to pass legislation of this magnitude through both chambers. 

Looking ahead, MAA will remain essential to our robust efforts aiming to impact policy. The announcement of these proposals will quickly begin to emerge as legislative and regulatory policy items where YOU will have an opportunity to weigh in. We will need MAA to be louder and stronger than ever to ensure that Congress does not end up harming, more than helping, real estate and housing with any targeted changes to federal taxes that reduce support for capital formation and investment and negatively impact consumers.

MBA will remain closely engaged with policymakers in the administration and Congress as items emerge. As more specifics unfold from these proposals, we will continue to provide updates. Thank you for your commitment to advocacy!
 

1. President Biden Unveils Public Works Package; Proposal Would Boost Corporate Taxes to Pay For Roads, Research

At the beginning of April, President Joe Biden unveiled a $2.3 trillion infrastructure initiative known as the American Jobs Plan. It centers on fixing roads and bridges, expanding broadband internet access, and boosting funding for research and development. At the same time, he announced his 'Made in America Tax Plan', which would raise corporate tax rates and make other changes to the tax code. More information on the President's proposals can be found here. The measure is the first of a two-part economic plan that President Biden and Congressional Democrats hope to move through the House and the Senate in the coming months.

• Why it matters: President Biden has made housing a centerpiece of his plan, proposing to invest $213 billion to produce, preserve, and retrofit more than two million affordable and sustainable housing units. MBA's President & CEO Bob Broeksmit, CMB, issued a member letter welcoming the administration's engagement on housing, but highlighting MBA's engagement on potential tax changes/revenue raisers that could affect our members' business operations.
• What's next: Biden's infrastructure announcement begins what will be a long, and likely contentious process, of trying to enact variations of the proposals into law. On the tax front, the announcement introduces the broad strokes of corporate tax reform, but the coming days and weeks will likely see more focus on specific tax proposals that affect the housing finance community. MBA's 2021 Chairman Susan Stewart has already convened a blue-ribbon task force on tax reform, consisting of a diverse group of MBA members representing the different capital sources and business models in the residential, commercial, and multifamily segments of the real estate finance industry. MBA will remain closely engaged with policymakers in the administration and Congress as this process unfolds.

2. Biden Administration Releases FY 22 "Skinny Budget" 

Earlier this month, the Biden administration released the top-line framework for the President's Fiscal Year 2022 budget proposal. As is typical in a Presidential transition year, the administration has submitted a "skinny budget" - a broad outline of the new administration's budget priorities provided in time for the start of the Congressional budget process. The FY22 request includes key investments in K-12 education, medical research, climate change, housing, civil rights, and other priorities that have been a consistent part of the Biden-Harris agenda since January. On housing, the budget requests significant increases in funding for housing vouchers, homeless assistance grants, energy retrofitting for public housing, and expanded support for Community Development Financial Institutions (CDFIs). The proposal also cites support for the Federal Housing Administration (FHA) as a crucial source of mortgage financing for first-time and minority homebuyers. It promotes FHA's role in providing urgent relief through expanded and streamlined loss mitigation programs to homeowners experiencing COVID-19-related hardships. Finally, a significant increase in funding is requested for fair housing enforcement organizations and investment in U.S. Department of Housing and Urban Development (HUD) staff and operations' capacity to support President Biden's fair housing executive order. The overall HUD Budget requests nearly $69 billion in funding, $9 billion more than the current year - a 15% increase.  

• Why it matters: The President's budget proposal is a blueprint of the administration's priorities provided to Congress as it begins its budget and appropriations' process. 
• What's next: The Congressional budget process begins shortly, starting with efforts to pass a budget resolution, and then followed by work on 13 different appropriations bills. Later in May, the Biden administration can be expected to provide a more detailed budget request outlining specific policy priorities. 
   

3. House Financial Services Committee Holds Hearing On LIBOR Fix

In mid-April, the House Financial Services Committee held a hearing titled, "The End of LIBOR: Transitioning to an Alternative Interest Rate Calculation for Mortgages, Student Loans, Business Borrowing, and Other Financial Products." The hearing featured government witnesses from federal financial regulatory agencies including the Federal Housing Finance Agency (FHFA), Federal Reserve, Office of the Comptroller of the Currency (OCC), U.S. Securities and Exchange Commission (SEC), and the U.S. Treasury, and was intended to focus on draft legislation that would provide a clear federal framework and a legal safe harbor for transitioning away from the LIBOR index. The draft text can be found here. Additionally, MBA, along with several industry trade groups, sent a letter to the House Financial Services Committee in support of federal legislation to address "tough legacy" contracts that utilize LIBOR.

• Why it matters: Members of Congress from both parties and all the witnesses agreed federal legislation is the best path forward. 
• What's next: MBA is working with Congress and regulatory agencies on the draft legislation, which could see a vote this Congress. 
   

Last month, the Mortgage Action Alliance launched a call to action in the state of New York, asking MAA members to contact Governor Cuomo and their representatives in the Senate and Assembly to oppose the proposed tax and recording of mezzanine debt and preferred equity investments. Simultaneously, the national MBA led a broad coalition of state and national trade groups in sending a joint letter to Governor Cuomo and legislative leaders outlining the detrimental and untimely impacts that this proposed tax would harm efforts to create affordable housing, while increasing costs for small businesses and renters.

In January, Governor Cuomo released his proposed budget that did not include any tax increases for the state. However, both the state Senate and Assembly budget proposals included this new provision despite adequate revenue projections absent additional taxes.

We are pleased to announce that this effort proved successful and the proposed tax on mezzanine debt and preferred equity investments was not included in the state's budget. Even so, this proposed tax has been introduced as separate legislation and could be considered before lawmakers adjourn in June. MAA members in New York will need to remain vigilant and prepared should we again require our strong industry voice to oppose enactment of this flawed policy. MBA will continue to work with its coalition partners to lead any opposition and provide updates should this require further action.

Register TODAY for MBA's National Advocacy Conference (NAC) May 11-12. Senators Sherrod Brown (D-OH) and Pat Toomey (R-PA) are the top-ranking officials of the Senate Banking Committee and will each share insights on their ongoing work to strengthen the nation's economy in the wake of the pandemic, increase access to homeownership, and bolster affordable rental housing and community development. 

NAC allows you to connect directly with elected officials online from your home or office. Your story matters-share it with key policymakers as they consider and pass legislation that affects all of us.Share your experiences, your voice, and your passion for our industry May 11-12! Register today at mba.org/nac. For more information, please contact Alden Knowlton at (202) 557-2816.

Next Monday May 3rd marks the start of the sixth annual MAA Action Weeks campaign! Held across May 3-14, this national, industry-wide campaign unites real estate finance professionals to become more engaged in political advocacy. Last year, our industry set record-level engagement via the Mortgage Action Alliance, which led to numerous policy wins at the federal and state levels. Now more than ever it is imperative that we maintain a strong, unified voice in Washington, DC, and state capitals across the country.

Throughout MAA Action Week, companies and organizations will utilize MBA-provided materials to encourage industry professionals to engage in advocacy. 79 companies and organizations have agreed to run campaigns. If you are interested in learning more about running a MAA campaign, please contact Rosie Sheehan at (202) 557-2933.