Positioning Hardwood in a Shifting Political Landscape

We’re just wrapping up summer, but the uncertainty of the Presidential election makes it feel like the end of the year is just around the corner, especially with the 118th Congress in session. The House decamped Washington a week early this year for its August recess, axing the final week of July in favor of heading home to campaign. Although Congress is slated to be in session after Labor Day and through the end of September, it is expected that the printed schedule will not stand and September will be cut short. This means that for most of the fall—some of September, all of October, and half of November, Members of Congress will be back in their states/districts and not here in D.C. working on legislation.

In terms of “must pass” items, there are only a few that Congress has to act on before the curtain closes on this Congress. One is funding operations of the federal government. We fully expect that a Continuing Resolution to keep the lights on past the close of the fiscal year on September 30 will be taken up and passed next month. The duration of this “CR,” as it is known, will likely extend through mid to late November and will afford time for Congress to take up a more significant Fiscal Year 2025 appropriations deal in the Lame Duck session. The other action that Congress must take is reauthorizing the National Defense Authorization Act or NDAA. This statute underpins our country’s national defense programs and the nuclear weapons programs at the Department of Energy and must be approved by Congress every fiscal year. As part of this year’s process, we are pleased to report that Senator Jeanne Shaheen (D-NH) has secured report language as part of the Senate NDAA bill to press the Department of Defense and General Services Administration on switching to Red Oak and away from Apitong for its truck trailer beds. We remain hopeful that Congress will unite in the Lame Duck on reauthorizing the Farm Bill. Still, sides remain far apart, and it looks increasingly like an extension of current law into 2025 is the likely scenario.

With limited substantive action on many Federation policy priorities likely for the remainder of 2024, we have begun to look ahead strategically in 2025 to identify areas where policy action is likely and where we can influence. Tax will be incredibly active. Recall that the House passed a very good, bipartisan bill (H.R. 7024) earlier this year that retroactively restores key “Main Street” business tax incentives and pairs those extensions with a more robust Child Tax Credit. The legislation, unfortunately, is stalled in the Senate. Still, the fact remains that there is strong support for restoring these benefits, and that sentiment will only get stronger as the bonus depreciation phase-out, for example, progresses. The benefit (100 percent bonus depreciation allowing businesses to write off the total cost of machinery and equipment in the same year it is purchased) took a 20 percent haircut in 2023 and another 20 percent reduction this year. It is slated to reduce again by 20 percent by January 1, 2025. In addition to this benefit and extending the research and development tax credit, several key tax benefits from the Tax Cuts and Jobs Act of 2017 expire at the end of 2025. At a recent fundraising breakfast that the Hardwood Federation team attended, House Ways & Means Committee Chairman Jason Smith (R-MO) emphasized that $4.6 trillion in tax benefits would go away at the end of next year if Congress fails to act. Among these is the Sec. 199A deduction (20 percent) for S-Corporations and other pass-through entities.

Outside the tax lane, a Farm Bill must be reauthorized at some point. The Federation team has continued to meet with Members of Congress on and off the Agriculture Committees to advocate for doubling funding for export promotion programs, forest and forest products workforce provisions, biomass carbon neutrality, and our Hardwood Access Program. Regarding the latter, our bill introduced in January—the Hardwood Access and Program Development Act (H.R. 6880)—will have to be reintroduced next year as all pending legislation automatically dies at the conclusion of a two-year session of Congress. In advance of the 119th Congress gaveling in early January, we will recruit a Democrat lead for this bill as our current champion, Rep. Annie Kuster (D-NH), is retiring. In addition, we will be working to line up Senate leads to introduce a companion bill in the upper chamber next year.

As with any year following a significant election, there will be several new faces in the House and Senate with whom we must connect and introduce our sector and policy priorities. This process will begin with open houses on swearing-in day in January and continue throughout the first quarter of 2025. There will also be movement and shuffling of membership on committees that handle our issues. Identifying and meeting with new members on panels that we care about will be a top priority for the Federation early next year. Also notable is the fact that there will be changes in leadership on some of the committees important to us. Take, for example, the House Energy and Commerce Committee, which handles most of the environment and energy-related legislation in the lower chamber. Current Chair Cathy McMorris-Rodgers is retiring at the end of this Congress. If Republicans remain in the House, Rep. Brett Guthrie (R-KY)—a long-time Federation supporter—is poised to take this vital gavel. This would mean a complete turnover in committee staff, and getting to know these new faces would also be a top priority.

The bottom line is that although we continue to explore opportunities to move our policy agenda this year, persistent headwinds in Presidential election politics and a shortened Congressional calendar have prompted us to begin looking ahead strategically in 2025. As we start our preparations for next year and the 119th Congress, we will look at NHLA and our other hardwood association members to help inform our preparatory efforts and guide our decision-making in advance of what is shaping up to be an active, consequential year.

By DANA COLE, Executive Director of the Hardwood Federation