Stakeholders are just beginning to evaluate key tax policy changes in Republicans’ multi-trillion-dollar reconciliation package, known as the One Big Beautiful Bill Act (OBBBA), including the long-term impact of several new and modified business tax reforms. Nevertheless, less than one week after final passage of OBBBA, key congressional leaders, including House Budget Committee Chairman Jodey Arrington (R-TX) and Senate Finance Committee Chairman Mike Crapo (R-ID), have already expressed interest in considering a second tax and spending package before the end of 2025.
While Congress prevented the expiration of key provisions from the Tax Cuts and Jobs Act (TCJA) at the end of 2025, the potential for a second tax and spending package means industry must again prepare to advocate for their policy priorities and defend against adverse tax changes. With less than six months left in 2025, businesses should reflect on several key insights gained from Republicans’ first reconciliation package and prepare for a second reconciliation process.
Engage Congressional Stakeholders Early. Businesses should engage with congressional champions early in the reconciliation process on existing or prospective tax policies that impact their business model to communicate their legislative goals. Business engagement with policymakers on a second reconciliation package may also feature dialogue on tax policy changes enacted as part of OBBBA, including advocacy in favor of strengthening, modifying, or “cleaning up” new provisions in the law, such as changes to the deductibility of gambling losses. Because the reconciliation process allows for expedited consideration of tax legislation, early engagement with congressional stakeholders is necessary to build a foundation for future advocacy efforts and accelerate the development of legislative proposals. Early and frequent engagement with congressional champions is especially crucial when congressional committees may opt to forgo traditional committee markups and when legislative proposals are refined through high-level negotiations.
Don’t Overlook the White House. President Trump secured several tax policy victories in OBBBA, including provisions limiting taxes on tips and overtime pay. With the Trump Administration’s tax policy team largely now in place at the White House and Treasury Department, the Trump Administration is likely to once again engage directly with Congress on the President’s tax priorities in a second reconciliation package. Presidential priorities may include provisions that were left out of OBBBA, including changes to corporate tax rates for domestic manufacturers and changes to carried interest rules. Businesses should be mindful of these and other prospective Trump Administration tax priorities and should also engage with the White House and Treasury Department on mutual policy goals prior to and during a second reconciliation process.
Prepare for a Coordinated and Rapid Response. Congress modified or removed several provisions from OBBBA between initial committee consideration in the House and final Senate floor consideration on July 1. Several provisions, including a proposal to tax litigation proceeds, were removed following review by the Senate Parliamentarian. Other dropped proposals, including a provision to address certain “unfair foreign taxes” and a proposed excise tax on certain wind and solar energy equipment, prompted concerns from Members of Congress and outside stakeholders. Under a second reconciliation process, the House and Senate may attempt to reintroduce several removed provisions, meaning stakeholders should be prepared to once again respond to or mitigate similar proposals. A coordinated and rapid response to adverse proposals is key due to the expedited reconciliation process.
With the 2025 tax policy cliff averted and significant Republican tax priorities addressed through OBBBA, Congress’s second tax bill may include a more narrow set of legislative priorities. However, with a second reconciliation process potentially around the corner and new or revived tax policy proposals on the horizon, businesses and stakeholders should reflect on lessons learned from the reconciliation process and begin to take stock of their tax policy goals to ensure future success.
