During Congress’s recess until the end of last month, several significant developments have occurred, particularly pertinent to ASA members:

Executive orders: President Trump recently signed several Executive Orders (EOs) to rescind and modify regulations in various sectors, including energy production, defense policy, and reverse the repeal of several regulations based on recent Supreme Court decisions, such as Loper Bright. Notably, one EO of interest to ASA members, “Making America’s Showers Great Again,” repeals the 13,000-word, 2021 definition of “showerhead,” effectively reinstating higher-flow showerhead standards established during President Trump’s first term.

Tariffs: The tariff situation remains in flux since Liberation Day, with several changes occurring in mid-April alone. An adjusted, reciprocal tariff schedule by country can be accessed here. Modifications to tariffs regarding China are outlined here, and by product in the Harmonized Tariff Schedule (HTS) can be found here. More than 75 countries have approached the White House regarding renegotiating trade deals, with roughly 15 currently engaged in active discussions. Renegotiating these intricate deals within the 90-day pause granted by the President presents a challenge, potentially leading to extensions for certain countries if they are actively engaged in negotiations at the time of expiration. Tariffs on critical minerals may be the next target for increases.

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Budget reconciliation: Both chambers have been diligently working on budget reconciliation since the Senate passed budget instructions prior to the recess. These negotiations have been high-level and confidential, with the House Ways and Means Committee convening in the Library of Congress to discuss the progression of tax policy. House Budget Chairman Jodey Arrington (R-TX) has announced that the House will prioritize crafting a comprehensive bill and release their version first. It is imperative to note that no aspect of the negotiations has been overlooked. Republicans are committed to extending the Tax Cuts and Jobs Act (TCJA), commonly known as the 2017 Trump tax cuts, or making it permanent. Additionally, they are advocating for $1.5 trillion in spending reductions, an increase in the debt limit, and other key priorities.

Federal spending: Federal spending in FY2019 was $4.4 trillion, while in FY2024, it reached $6.91 trillion. The absence of a spending agreement will pose challenges for deficit hawks in the House. Furthermore, the budget instruction bill mandated the House Energy and Commerce Committee to reduce its programs by $880 billion. This has led to speculation regarding potential sources of these cuts, including Medicaid. However, House Energy and Commerce Chairman Brett Guthrie (R-KY) has suggested that health care programs could account for $500-600 billion, while the remaining cuts could be allocated to telecommunications and energy programs. Chairman Guthrie has also proposed that $170 billion in savings could be achieved by ensuring that beneficiaries are entitled to their benefits.

Additional proposal: An additional proposal proposes increasing the top individual income tax rate to 39.6% (from the current 37%) to facilitate funding for an enhancement of the Child Tax Credit. The situation remains fluid, and further developments are anticipated. Stay tuned.