By Matthew Bechard

A former restaurateur and real estate business owner, Rep. Mark A. Foley (R-FL) has served in Congress since 1994 and at the beginning of the 106th Congress was appointed to the House Ways and Means Committee, putting him in the middle of many of the key issues facing Congress today.

Foley's pre-political career and his status as co-chairman of the Congressional Real Estate Caucus, which was created in 1998 to serve as a forum for members of Congress and real estate professionals to discuss federal policy and its impact on the nation's real estate industry, make him uniquely qualified to be a leading voice on real estate-related issues.

In addition, Foley serves as a member of the House leadership as Deputy Majority Whip. He is also chairman of the House Entertainment Industry Task Force, co-chairman of the Missing and Exploited Children's Caucus, co-chairman of the Congressional Travel and Tourism Caucus and co-chairman of the Congressional Heart and Stroke Coalition, among other caucus memberships.

Foley recently spoke with Portfolio about a number of issues including social security reform, the state of the economy, and the advantages to adding a real estate option to the Federal Thrift Savings Plan.

On Social Security

Reforming the nation's Social Security system is one of the most debated issues facing Congress during President Bush's second term. As a member of the House Ways and Means Committee, which among its many tasks is seeking solutions for preserving the Social Security program, Foley says the first step toward a resolution is to look at Social Security reform in the broader context of retirement security in general, including pension reform and encouraging individual savings.

"As far as Social Security is concerned, we must ensure young people will have the same security in retirement that their parents and grandparents are guaranteed," Foley says.

"President Bush has suggested that beginning in 2009, workers could initially invest up to 4 percent of their wages in personal investment accounts up to $1,000 a year. In addition, participants would be required to diversify their investments so that benefits would be protected against political manipulation and market swings."

Foley says the onus is on Congress to not leave "families and seniors at the mercy of a volatile market." He adds that he will not vote for any reform that doesn't protect individual savings.

"I think that we also need to examine the option of lifting the $90,000 cap on FICA-taxable income," Foley says. "Also, the proposal of progressive indexing of Social Security benefits is an idea that may help us get a bipartisan consensus on a reform package."

Foley says he is optimistic regarding the timetable for reaching such a consensus.

"We have been conducting hearings in the Ways and Means Committee on Social Security reform, and I would expect the chairman to schedule a vote on a retirement security bill before the end of this session of Congress," Foley says. "We may even have a proposal offered for committee consideration this summer."

On the Economy and Tax Reform

Foley has been lauded by several organizations, including the National Taxpayers Union and the U.S. Chamber of Commerce, for his work to stimulate economic growth, and he believes that the current administration has done its job in getting the economy moving in the right direction.

"I think the numbers are very clear that the economy has and will continue to benefit from the American Jobs Creation Act and other measures we have enacted to ease tax burdens and help businesses grow," Foley says. "As long as that is sustained as a policy, the climate will continue to improve for businesses and for jobs."

Even though recent job growth numbers look positive, Foley says it is difficult to forecast where they will go for the remainder of the year.

"However, the recent numbers coming from the Department of Labor are encouraging—showing that the economy is continuing its two-year streak of job creation, for a total of 3.5 million new jobs created since May 2003," Foley says. "The unemployment rate has dropped to 5.1 percent—outpacing population growth."

As a member of the Ways and Means Committee, tax reform is always near the top of Foley's legislative agenda. In addition to the Jobs Creation Act, Foley has supported legislation to simplify the entire tax system, which he says has become layered in unnecessary complexity. Foley says the Ways and Means Committee has begun hearings to look at an assortment of suggested changes to the U.S. tax code that would benefit both individuals and businesses.

"This is an ongoing process that I believe will certainly lead to some proposals during this Congress for real simplification of the tax code," Foley says. "More radical overhauls will take far longer to work out. And while there has been some thought to dovetailing tax reforms with Social Security reforms, I don't think that is likely. Both issues are far too complex for one package."

On Adding REITs to the TSP

As the co-chair of the Congressional Real Estate Caucus and a former real estate business owner, Foley has a deeper working knowledge of the real estate industry than many of his peers on the Hill. In addition, Foley has been active in many legislative issues facing the commercial real estate industry and has been a supporter of REITs and enhancing their ability to serve as a viable investment vehicle for all investors.

"REITs have a proven track record of success, operating portfolios of investment-grade, income-producing commercial real estate. And because REITs pay out virtually all of their income to shareholders, their yields are much more impressive than many other investment products," Foley says. "In fact, non-industry research has shown conclusively that re-turns from REITs are much higher than those from other investments."

Foley is helping to lead the effort to see those positive attributes made available to federal employees. In April, Foley co-sponsored H.R. 1578, which would provide for a real estate stock index investment option to be added to the Federal Thrift Savings Plan (TSP). Also in April, Foley testified on this issue before the Subcommittee on the Federal Workforce.

"Until 2001, when the S Fund and the I Fund were added, the TSP contained only three fund options: the C, G and F Funds," Foley says.

"All three were considered to be low-risk investment options over the long term, but the plan was insufficient for proper diversification and so the other funds were added. Now is the time to further expand the TSP by adding a REIT fund to those options already available."

In addition to the strong returns posted by REITs, Foley says recent research has also shown that due to their low correlation with other equities, the investment returns from REITs and the returns from other stocks and bonds make REITs an attractive addition to individual investor portfolios as well as those of institutional investors.

"As a result, more and more financial experts are recommending that retirement savings be diversified into stocks, bonds and commercial real estate," Foley says.

On Other Real Estate Legislation

For the past several years Foley has introduced legislation to grant property owners a 90-day grace period to comply with Americans with Disabilities Act (ADA) regulations before facing fines, providing they are working to correct any problems.

"The ADA Notification Act has gained wide support in the private sector for the past several years because the number of ‘drive-by' lawsuits being filed has spread like wildfire throughout the country, affecting every business from restaurants and hotels to stadiums and post offices," Foley says. "I do not know if we will succeed this year in getting this legislation passed, but I have a lot of confidence that it is the right thing to do and that eventually it will be incorporated into the Americans with Disabilities Act."

Foley says this civil rights law is one of the most important ones on the books, but the proliferation of lawsuits being brought by lawyers interested in collecting attorneys' fees, not for providing access for disabled Americans, is eroding the integrity of the ADA and is having an increasingly negative fallout on disabled Americans who have nothing to do with these lawsuits.

"The purpose of the ADA since its inception in 1990 is to ensure access for the disabled community," Foley says. "It was not intended to provide a cottage industry for lawyers to get rich. If the purpose of these lawsuits is to force businesses to fix ADA access violations, then let them do that by giving them a heads up on what needs fixing. The goal should be to fix the problems, not to collect attorneys' fees.