Congress is in session, with a one-week June recess and a two-week Independence Day recess on tap, until the month-long August recess. In that short time for legislative work, lawmakers must resolve time-sensitive controversies unrelated to NAIFA interests, advance fiscal year (FY) 2027 government funding legislation, and determine whether another all-GOP reconciliation bill—this one with a significant tax title—can be done. There are a number of issues relevant to NAIFA potentially in play in that all-GOP bill.

An all-Republican budget bill (reconciliation) is in the works, although there is considerable skepticism on Capitol Hill about whether it can cross the legislative finish line. But Speaker of the House Rep. Mike Johnson (R-LA) says to expect a bill to be released “within weeks.” The bill will likely focus on eliminating (or at least reducing) fraud—especially in Medicare and Medicaid—along with spending cuts, defense spending, and potentially other hot button issues (like, for example, voting rules reform, or whether to codify the killing of the Trump anti-weaponization fund). All signs point to the bill—if it actually does come together—including a substantial tax title.

Potential issues of interest to NAIFA to be included in a reconciliation bill tax title include:

• Indexing of capital gains
• Shifting Affordable Care Act (ACA) health insurance premium subsidies from insurers to individuals, likely through health savings accounts (HSAs)
• An increase in the section 199A deduction for noncorporate qualified business income
• Revenue raisers like changes to trust rules (particularly GRATs) or disqualification of some private placement life insurance (PPLi) as life insurance for tax rule purposes.

Other issues that could impact NAIFA members and their clients may emerge, although Republicans generally preferring spending cuts over tax increases if (when) offsets are needed. Note, as with virtually all one-party reconciliation bills, the minority party—in this case Democrats—are largely excluded from the process of writing the bill, including its tax provisions. So, while Democrats are sure to raise a multitude of “tax-the-rich” issues (for example, higher tax rates on the ultra-wealthy, current taxation on unrealized capital gains, a tax on overall wealth, reduction or even elimination of tax benefits), those proposals are unlikely to advance this year.

There are also other, high-profile issues that may get Congressional attention. Tax rules and regulation of cryptocurrency, artificial intelligence (AI) rules, affordable housing legislation, a farm bill and a transportation bill are waiting in the wings for legislative action. It is unlikely that any of these “other” issues will be enacted into law prior to the August recess, but some may advance through committee action, or even floor action in one chamber or the other.

Coloring all of this is the political environment. Control of both the House and Senate will be determined by the outcome of the November mid-term elections, and at this juncture both chambers appear to be in play. The potential for voter reaction in less than five months will have an outsized influence on all these issues.

Prospects: Odds are against Congressional Republicans finding a way to do a third reconciliation bill—but the odds were against them doing the second bill, too, and that bill is now law. So, the effort has to be taken seriously, despite the grim outlook for it at this point in time. NAIFA is on high alert awaiting bill-writer decisions on what provisions (especially tax, retirement and health-related) make it into a proposed package.

NAIFA Staff Contacts: Diane Boyle – Senior Vice President – Government Relations, at dboyle@naifa.org; Mike Hedge – Senior Director – Government Relations, at mhedge@naifa.org; or Jayne Fitzgerald – Director – Government Relations, at jfitzgerald@naifa.org