Situational Awareness
President Trump will deliver the State of the Union before a joint session of Congress on Tuesday, March 4. Both the Senate and House of Representatives are in session this week. House GOP leadership has scheduled a series of votes on three disapproval resolutions that would overturn regulations finalized last year under the Biden administration, including a Department of Energy rule establishing new efficiency certification requirements for various consumer appliances. The Senate will convene today to consider Linda McMahon’s nomination as Secretary of Education. Lawmakers in both chambers must come to an agreement this week on FY 2025 spending to avoid an imminent government shutdown next Friday, March 14.
Tax Bill Talks Advance with House Passage of Reconciliation Blueprint
Despite facing opposition from several members of the House Republican Conference, Speaker of the House Mike Johnson (R-La.) and his leadership team successfully advanced a budget resolution last week that paves the way for a reconciliation bill that would advance President Trump’s agenda on immigration, border security, energy and taxes. Conservative lawmakers criticized the proposal for not requiring deeper cuts, while moderate Republicans were concerned that the proposed cuts could affect Medicaid coverage and other social net programs.
The adoption of the resolution—which includes instructions to committees on the total savings and new spending to be included in a reconciliation bill—bolsters House Republicans’ plan for one “Big, Beautiful Bill” that incorporates an extension of President Trump’s 2017 tax cuts, as well as new border security, domestic energy and defense spending.
Speaker Johnson and Senate Majority Leader John Thune (R-S.D.) must now resolve their differences on the reconciliation process. Senate Republicans’ budget resolution doesn’t take the cost of extending provisions from the 2017 tax bill into consideration. Despite that measure being now considered as a “fallback” plan, Sen. Thune is still challenging the House budget resolution via his push for making certain tax cuts permanent. The House reconciliation budget in its current form would not allow for permanency.
Chavez-DeRemer Approved by Senate Labor Committee
Last week, the Senate Committee on Health, Education, Labor, and Pensions voted to approve former Congresswoman Lori Chavez-DeRemer’s nomination as secretary of labor. The vote was 14-9, with three Democratic senators joining Republicans—minus Sen. Rand Paul (R-Ky)—to advance her nomination to the Senate floor. A final confirmation vote could take place later this week. Senate Majority Whip John Barrasso (R-Wyo.) has signaled his confidence that Chavez-DeRemer will be confirmed by the full Senate.
During her confirmation hearing, Chavez-DeRemer walked back her support for the union-supported Protecting the Right to Organize (PRO) Act, which aims to expand collective bargaining rights. She specifically cited provisions that would impact “right-to-work” laws that are enacted in 27 states, as well as language that could impact secret ballots.
Nonprofits and Reconciliation
Last week, I was up on Capitol Hill meeting with staff and congressmen about the direction reconciliation may take with regard to nonprofits. While I continue to believe 501(c)(7) organizations are not specifically a target, depending on how any provisions related to nonprofit entities are drafted in the reconciliation package, we could see some degree of impact. It appears the main concern among legislators right now is the improper classification of organizations as nonprofit based on their activities and political engagement. There is growing consternation about the proliferation of nonprofits in the economy; one congressman I spoke to cited 17% of the economy now being in the nonprofit sector, which he believes is inappropriately high. With Department of Government Efficiency (DOGE) revelations of billions in federal funds being used in questionable ways by non-government organizations (NGOs)–most notably through USAID—this issue is not going to fade anytime soon. University endowments are also high on the list of potential scrutiny during reconciliation. From an operational perspective, my recommendation is to make sure your club is well within compliance with nonprofit rules and regulations, such as unrelated business income and non-member revenue. NCA will continue to be on the Hill so we can keep our members apprised of any developments and communicate with policymakers about the important role clubs play in their economies.
Senate Labor Committee Considers Trump Deputy Labor Secretary Nominee
The Senate Committee on Health, Education, Labor, and Pensions will meet this week to consider Keith Sonderling’s nomination as deputy secretary of labor, the second highest-ranking position in the Department of Labor. Sonderling was previously a commissioner on the U.S. Equal Employment Opportunity Commission, which is responsible for enforcing laws that make discrimination illegal in the workplace. Prior to his confirmation to the EEOC, Sonderling served as the acting and deputy administrator of the DOL’s Wage and Hour Division, which oversees regulations related to worker classification and overtime. Before joining DOL in 2017, Commissioner Sonderling practiced labor and employment law in Florida.
White House Prepares Canada, Mexico, China Tariffs
Over the weekend, Secretary of Commerce Howard Lutnick said he expects the Trump administration to follow-through with 25% tariffs on goods imported from Canada and Mexico on Tuesday, March 4. However, Lutnick also hinted that there remains room for negotiations. The business community and international partners alike are hoping that the White House will once again decide to delay the tariffs. Last month, the Trump administration reached separate deals with both Canada and Mexico on border security and drug trafficking before announcing a month-long delay.
Concurrently, additional tariffs on Chinese goods, which would raise duties by 10% to a total of 20%, are expected to take effect tomorrow. The president has also threatened new tariffs on European imports, including steel, aluminum and copper.
Congressional lawmakers on both sides of the aisle have also signaled concerns about the impact on their own districts and states, with top Republicans
acknowledging that the trade threats provide the White House with leverage for concessions on immigration and fentanyl.
March Webcasts: Tax Assessments and Government Uncertainty
Join us this Thursday and next for a pair of webcasts covering legal and regulatory issues impacting clubs.
On Thursday, March 6 at 2pm EST, join Larry Hirsh, president, Golf Property Analysts for a conversation on how clubs can use deferred maintenance to their advantage when appropriate in contesting real estate tax assessments. Register here.
On Thursday, March 13 at 2pm EST, join NCA’s government relations team for an informative webcast to provide some clarity on what has been a whirlwind start to the second Trump Administration and new Congress. Executive Orders, DOGE, and what may be in a tax package impacting clubs are on the agenda. Register here.
