2023: A Look Ahead from Washington, D.C.January 20, 2023
On January 3, 2023, the new 118th Congress started its session with 222 Republicans and 213 Democrats in the U.S. House of Representatives, the exact mirror image of the previous Congress. The 2021-2022 Congress was among the most significant in recent memory, but even with a divided Washington today, manufacturers should expect continued activity. Before we look to potential troubles ahead, let’s mention some 2022 highlights, and lowlights.
Following the 2020 election, the Precision Metalforming Association (PMA) faced the most active U.S. Congress and regulatory efforts in years. PMA’s advocacy team in Washington, D.C., succeeded in helping to defeat major tax increases on passthrough businesses, including preserving the current estate-tax levels and preventing a proposed jump in the capital-gains tax and the Net Investment Income Tax (NIIT). Efforts to have businesses pay for new spending programs largely failed, while lawmakers did increase funding for career and technical education, registered apprenticeship programs, Manufacturing Extension Partnerships, and job-training activities.
Workforce development remains one of the few nonpartisan issues in Washington, D.C., with hope for continued support in 2023. Lawmakers in 2022 could not agree on passing the College Transparency Act in the face of House GOP opposition absent broader higher-education reform. Congress may in 2023 consider updating the Higher Education Act and providing more flexibility for Pell Grants, although disagreement over student-loan forgiveness may remain an obstacle.
Also left unfinished is extending expired business-tax provisions set to sunset under the Tax Cuts and Jobs Act of 2017. Instead of full expensing for R&D, those activities remain amortized over 5 yr. since January 1, 2022. Another victim of congressional inaction: 100-percent bonus depreciation falling to 80 percent on January 1, 2023. PMA’s team in Washington already is working with lawmakers to address the impact of their inaction on these important investment provisions.