Inflation Reduction Act Moves Forward

The latest update from our friends at the Hardwood Federation focuses on the “Inflation Reduction Act.”

On Sunday, Senate Democrats passed the newly named Inflation Reduction Act by a vote of 51-50, with Vice-President Harris serving as the tie-breaking vote. While numerous amendments were offered by Republican Senators in a process known as “vote a rama,” only a couple of amendments were approved.   One that will affect small and medium-sized businesses extends for two years the non-corporate excess business loss limitation, which is a cap on losses a business owner is permitted to claim.   A letter to Congressional leaders opposing this change was circulating this week in hopes of having this tax provision stricken from the final version that is considered by the House, but that outcome appears unlikely.

Democrats have traveled a twisty road to use their chance at reconciliation this year and, despite predictions by many political advisors, finally did so with a scaled-down version of Build Back Better that contains key provisions on climate, energy, and other social safety net issues. As for the next steps, the House is now scheduled to vote on the bill on Friday, which will most likely pass in a party-line vote, but Democrats have little room for error given their slim majority in the lower Chamber.  The Hardwood Federation will review the final text for industry impacts not already reported.