Last month, ASA Advocacy actively engaged decision-makers and stakeholders in Washington, DC. From meetings with leadership on Capitol Hill to engaging with the President’s team, the voice of the PHCP/PVF industry was well heard. Issues making the rounds in Washington included the next steps with the Continuing Resolution, budget reconciliation, tax issues, as well as spending. Here we go:

Continuing Resolution: After several extensions of federal funding, spanning two different presidential administrations, the House quickly passed a Continuing Resolution (CR) to fund government through Sept. 30, the end of the current fiscal year. This CR was considered relatively clean, as it maintained FY2024 spending levels, apart from increases in defense spending and immigration enforcement, while taking back roughly $20 billion from the IRS that was provided during the previous administration.

After the House passed it largely along party lines (GOP Rep. Thomas Massey voted against, while Democratic Rep. Jared Golden voted for), Speaker Mike Johnson (R-LA) quickly called an early recess to put the ball in the Senate’s court. This quickly set off some internal debates within the House and Senate Democratic Caucuses. Senate democrats wanted a 30-day CR to allow more time for negotiations, while many of their House colleagues were encouraging a “no” vote that would result in a government shutdown. At the end, Senate Minority Leader Chuck Schumer (D-NY) recommended support for the CR and it passed. As a result, many democratic voices, including former Speaker and current Rep. Nancy Pelosi (D-CA), are suggesting new leadership is needed in the Senate Democratic Caucus. Stay tuned.

Tax/Budget: The budget reconciliation conversations continue on Capitol Hill. When one party has “The Trifecta” of the White House and both chambers of Congress, they can institute a major rewrite of tax and spending policies in a 10-year window.

This happened during the first year of the Biden administration when democrats were in power. Now, several of those measures that republicans are looking to roll back, will be on the table this year. Even though the GOP has the majority, there are some challenges they face. First, the Senate Parliamentarian will be mentioned frequently in the weeks to come. She can rule whether the budget reconciliation deal is in violation of the Byrd Rule, which states that anything included in budget reconciliation must directly impact the budget (no extraneous policy changes are allowed). It also allows senators to make changes, it can’t increase the deficit beyond the 10th year, and it can’t address anything with Social Security.

One of the big questions is how making the TCJA (2017 Trump Tax Cuts that expire at the end of the year) will affect this calculation. Some Republicans are arguing that it would have no change to the bottom line as it is already existing. Many Democrats disagree and will be looking to negotiate, but at the end of the day it comes down to the parliamentarian. What happens if she disagrees? One, the Senate could vote to overrule her. Second, she could be replaced (the parliamentarian serves at the pleasure of the Senate Majority Leader and the current office holder, Elizabeth McDonough, was appointed in 2012, by then Democratic Senate Majority Leader Harry Reid, but is widely respected on both sides of the aisle). Third, and the most unlikely, Republicans accept her decision. In addition, the current debt limit is expiring this spring and President Trump would like a major increase to remove obstacles to moving legislation through Congress, as well as staying agile and responsive to funding needs. More to come.

Trade: April 2 became the next deadline for new tariffs on imported goods, as negotiations continued. The Trump Administration remains adamant that these tariffs will be imposed without reciprocity by many of the countries that tax American imports at a higher rate. The UK and India appeared to be on a decent path right now, and many are focused on the Top 10 countries that have the largest trade deficits with the United States. They are (in order): China, Mexico, Vietnam, Ireland, Germany, Taiwan, Japan, South Korea, Canada, and India. As seen over the last few weeks, negotiations are ongoing, and agreements are made in some sectors. ASA will continue to monitor and provide updates as necessary.

ASA action: ASA recently asked Labor Secretary Chavez-DeRemer and Attorney General Bondi to abandon the defense of the Biden-era Overtime Rule in court. This rule substantially lowers the threshold at which employees would be due overtime pay, as well as the reclassification of many salaried to hourly employees.