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January 19, 2025

U.S. Congress Turns To Budget Reconciliation, Tax Extensions

Now that members of the 119th Congress have chosen their leaders, including the lawmakers who will chair legislative committees of jurisdiction, and President Donald Trump has been sworn into office, policymaking has begun in earnest for the current two-year congressional term.

As readers know, Republicans plan to start by assembling a budget reconciliation. If signed into law, budget reconciliation legislation allows for expedited consideration of certain future tax, spending, and debt limit bills. More specifically, and perhaps most importantly in Washington, D.C.’s current partisan context, budget reconciliation lowers the threshold for passage of these bills in the U.S. Senate from 60 lawmakers to 50.

Congress can approve up to three separate budget reconciliation bills each year, and, this year, GOP leaders are debating whether to pursue one bill or two. (If two, lawmakers likely would separate them by containing all tax provisions in one bill and all spending measures in another.) While Republicans are still hammering out the answer to that question, they have made it clear the priorities they are considering for budget reconciliation.

The list includes:

  • Extending the expiring provisions of the Tax Cuts and Jobs Act (TCJA), including policies related to personal income tax rates, the Section 199A deduction for pass-through organizations, and estate and gift tax provisions. (As a reminder, the TCJA permanently lowered the U.S. corporate income tax rate. While some lawmakers have balled for the corporate rate to be raised, as it has in the past, the Metals Service Center Institute will continue to argue for tax parity for all types of businesses, whether they pay the corporate rate or are pass-through organizations that pay at the individual level.)
  • Provisions to boost oil and gas drilling, approve specific mining projects, require more auctions for the rights to drill oil and gas. Read more about these ideas at this link.
  • Raising or suspending the U.S. government’s statutory debt limit in order to avoid a default of the federal government’s debt.
  • Changes to Social Security, Medicare, and Medicaid programs and budget cuts to other domestic spending programs.
  • Providing additional funding for border security and immigration enforcement, along with changes to tariff and trade policy.

Each of these issues could affect industrial metals companies and their employees. Stay tuned to Connecting the Dots as this debate continues.

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