LEGISLATIVE AFFAIRS: Congress Debates Debt Ceiling, SALT, Infrastructure
Philip Weiden | October 12, 2021
Several legislative issues are before Congress for consideration and debate. These issues touch every facet of American life.
The first issue that Congress must address is the debt ceiling. The debt ceiling is a cap on the amount of additional indebtedness that the federal government can incur to pay its bills. When Congress raises the debt ceiling or suspends it, it allows the government to pay its bills. This indebtedness pays for spending that has already been incurred, meaning money that was appropriated in the budget.
If the U.S. chooses not to raise the debt ceiling, the government would have a debt default. This would send the economy into a major recession, and very likely a depression. The financial markets would plummet. Real estate would take a big hit.
Democrats and Republicans routinely use the debt ceiling to make political points despite knowing that ultimately, they must acquiesce. This year Congress has just raised the debt ceiling by about $480 billion and suspended the debt ceiling until December. Once again, we averted default, but just barely, by kicking the can down that proverbial road.
Another issue is the infrastructure bill. This bill had bipartisan support in the Senate, with 19 Republicans joining all the Democrats to pass a bill that would fund roads, bridges, tunnels and rural broadband. However, the bill has run into some opposition from those on the left, who want to see a “human infrastructure bill,” also known as an expansion of the social safety net. Those on the left would support an infrastructure bill, but only if it was paired with the social spending bill.
Realtors would also like an increase in the state and local tax deduction, or an abolishment of the cap altogether. This, they claim, would provide immediate tax relief to middle income and lower income families. Realtors should call their Congressperson and urge them to support an increase in the state and local tax deduction.
Stay tuned for updates on these legislative bills.