Hardwood Floors December 2024/January 2025

Government Affairs (Continued) The current chairman – Senator Tom Carper (D-DE) – is retiring and the role of ranking member may be filled by Senator Jeff Merkley (D-OR). On the Senate Energy and Natural Resources Committee, current Ranking Member John Barrasso (R-WY) would ordinarily slide into the chairman’s role, but he is running unopposed for Senate Republican Whip and will not be serving on this panel in the 119th Congress. Likely to take the chairmanship is Senator Mike Lee (R UT). Current Chairman Joe Manchin (D-WV) is retiring, and that role may be filled by Senator Martin Heinrich (D-NM). Finally, on the Senate Finance Committee, the existing chair and ranking member will flip with Senator Mike Crapo (R-ID) leading the panel and Senator Ron Wyden (D-OR) moving to the ranking spot. Again, as we have noted, tax policy will be a primary focus of Congress and the administration next year and finance holds the pen in the upper chamber on all things tax related. In the House, there about 18 races that have yet to be called, but as of this writing, republicans had 214 and democrats 203 seats in the 435 member lower chamber. At press time, most pundits believe the republicans will prevail and enter 2025 with a very slim majority in the House. If the current trend holds, a few key members of Congress that are strong champions of our sector will remain in key positions of influence. Primary among them is Rep. Glenn “GT” Thompson (R-Pa), chairman of the House Agriculture Committee. His panel produced a Farm Bill reauthorization measure that was reported out of committee on a bipartisan basis, but never saw floor action. That bill included language reauthorizing and funding both the Wood Innovation and Community Wood Grant programs as well as beneficial forestry and forest management provisions. Importantly, the bill also doubles funding for the Market Access and Foreign Market Development programs for which the Hardwood Federation has been advocating. Likewise, Rep. Bruce Westerman (R-AR) will continue to chair the House Natural Resources Committee – the panel in the House that leads on federal forest and timber-related policy issues as well as the Endangered Species Act. Westerman is the only member of the House with a forestry degree and his district is also home to scores of wood and pulp and paper product manufacturing facilities. The lame duck session of the 118th Congress convened on November 12. We expect very little in the way of substantive legislating save for a continuing resolution to fund the government into March of 2025. Action on a Farm Bill and tax policy will be punted to the 119th Congress which convenes January 3. As the Hardwood Federation looks to next year with a new Congress and a new administration, we intend to remain laser focused on our key federal public policy priorities. These include:

The Farm Bill: Enacting a final reauthorization bill that hopefully doubles, but at least maintains, key funding for our export promotion programs that our sector relies on to open up and sustain overseas markets for U.S. hardwood products. Tax: Restoring key business tax benefits that have been allowed to lapse or begin phasing out, including 100 percent bonus depreciation and the research and development tax credit, as well as extending the 20 percent tax deductions for pass throughs that expires at the end of 2025. Biomass: In addition to our Farm Bill advocacy on biomass, reauthorizing our biomass carbon neutrality appropriations rider and educating incoming EPA officials about the carbon neutral nature of forest biomass energy. One area of concern with the incoming administration is its campaign rhetoric around tariffs. While some industry sectors benefited from tariffs on competing materials, including flooring, the retaliatory tariffs imposed by China on lumber and log exports during the first Trump Administration were devastating for much of the industry. The Hardwood Federation intends to ramp-up our education efforts in the coming weeks to ensure that policymakers understand that overreliance on tariffs will have profound unintended consequences and should be used with tactical precision, not only for our sector, but any grower or employer that relies on export markets. Each new administration and Congress presents its own set of challenges and opportunities. While some are clear today, others will emerge as the new players take their seats at the table. We look forward to the work ahead and having introductory meetings with new members of the 119th Congress after they are sworn into office in January. Dana Lee Cole is the executive director at the Hardwood Federation, a Washington, D.C.-based hardwood industry trade association that represents thousands of hardwood businesses in every state in the United States and acts as the industry advocacy voice on Capitol Hill. She can be reached at dana. cole@hardwoodfederation.com.

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