Inside Washington: June 2025
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Reconciliation Update
Following House passage of the ‘One Big Beautiful Bill Act’, Senate Republicans have quickly moved to pass an alternate version of the reconciliation bill to meet President Trump’s aggressive July 4th deadline.
To that end, Senate Committee Chairs have released each of their respective pieces of the larger package under their jurisdiction. The next step is for each Committee to pass its bill, at which point they will be combined and brought before the entire Senate for consideration.
Once the bill is brought to the floor, Senators can make a point of order against individual provisions of the bill. The Senate Parliamentarian will then determine, on a case-by-case basis, whether each provision adheres to the ‘Byrd Rule’, which sets forth instructions in Senate Rules on what can be passed by a simple 50-vote majority in a Senate reconciliation bill. This is where the process can become bogged down.
The bill remains fluid and can change up until the moment it is passed. While many of the tax reform provisions are the same as those in the House version, including R&D and Capital Equipment expensing, there are some notable differences. Namely:
- 199(a) – Qualified Business Income Deduction for S-Corporations: Made permanent at 20%. The House version made permanent and increased to 23%.
- State and Local Tax (SALT) Deduction: Extended at $10,000. The House version extended to $40,000.
- The corporate tax rate remains the same at 21%.
Following NECA’s advocacy, the Senate bill offers additional flexibility for contractors who benefit from tax credits. This includes the striking of provisions that would have required all projects to begin construction within 60 days of final enactment in order to receive credits and that would have severely limited the transferability of tax credits for contractors and manufacturers.
However, while nuclear, geothermal, and hydroelectric project credits are extended until 2036 at 100%, wind and solar credits will be phased out by 2028. Residential solar credits will also be available only to projects brought online within 180 days of enactment.
NECA will continue to engage with our Senate and industry partners to advocate for tax reform policies and tax credits that benefit our members.
Project Labor Agreements
The Trump administration, through an Office of Management and Budget memo, has signaled it will largely allow a Biden-era rule requiring Project Labor Agreements (PLAs) on large-scale federal construction projects over $35 million to remain in place. While the memo makes clear that agencies should still seek cost-effective solutions and engage in competitive bidding processes, preference should be given to bids that include PLAs.
Non-union contractors and some private companies have criticized the decision. Labor unions have applauded President Trump. A lawsuit against the rule was already making its way through the courts while President Biden was still in office, and it is likely that there will be renewed legal action in an attempt to have the courts block the rule.
Tariffs
The Trump administration's ambitious tariff agenda has faced significant legal setbacks this month, creating uncertainty for businesses that rely on imported materials and equipment. On May 28, the U.S. Court of International Trade blocked the administration's sweeping "Liberation Day" tariffs, ruling that President Trump overstepped his authority by imposing blanket tariffs under emergency powers.
The Court determined that Congress, not the President, holds exclusive power to regulate trade, and that the International Emergency Economic Powers Act (IEEPA) does not grant unlimited tariff authority. However, the legal landscape shifted rapidly when the U.S. Court of Appeals for the Federal Circuit granted an administrative stay on May 29, temporarily reinstating most tariffs while appeals proceed.
The court rulings specifically affected the 10% universal tariff on all imports, 30% tariff on Chinese goods, and 25% tariff on certain products from Mexico and Canada announced on April 2, 2025. Despite the legal challenges, several tariffs remain in effect, including the steel and aluminum tariffs and 25% tariff on automobiles.
Meanwhile, in a late-breaking development, President Trump has also recently imposed a 50% tariff on imported steel and aluminum, effective as of June 4, representing a 25% increase from previous levels.
The administration has pursued some diplomatic solutions, reaching a 90-day suspension agreement with China that reduces U.S. tariffs on Chinese goods from 145% to 30%, while China lowered its retaliatory tariffs from 125% to 10%. Additionally, Trump officials have stated that they have a framework for a trade deal with China, with a primary focus on maintaining continued access to China’s rare earth elements, which are critical to advanced manufacturing in the United States.
The administration has stated that it may begin sending letters to individual countries that have not engaged in trade talks as we approach the July 9th deadline on the initial 90-day pause on full retaliatory tariffs. The letters will likely outline a full list of grievances and planned actions by the administration if a country chooses not to engage in trade talks.
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NECA NextGen Fly-In: The Future of Advocacy Starts Here!
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July 21-22, 2025 | Washington, D.C.