Federal Outlook for 2025

ICSC PAC had an election success rate of 99%, with 107 out of 108 candidates supported winning their races. [Incumbent Senator Bob Casey’s (D-PA) was defeated by Dave McCormick.]

Tax

House Republicans are expected to move quickly to extend the 2017 Tax Cuts and Jobs Act (TCJA), passed in President-elect Donald Trump’s first administration. Provisions that are set to sunset at the end of 2025 include lower individual rates, the higher estate tax exemption, the 20% pass-through deduction (Sec. 199A), and bonus depreciation, among others. With unified control of Washington, DC, Republicans will be able to use the budget reconciliation process to enact tax legislation with a simple majority of votes in the Senate. Even so, it may prove difficult to navigate a multi-trillion-dollar package through the narrowly divided Congress.

Trump also promised new tax cuts on the campaign trail, such as no taxes on tips and Social Security benefits, deductions for auto loan interest, tax credits for caregivers, and lower corporate rates for businesses that make their products in the U.S. It remains to be seen if these items will move with the TCJA extension or in a separate package. To pay for his tax cuts, Trump has floated the idea of raising tariffs across the board, and especially on Chinese imports. Congressional Republicans have suggested rolling back the “green” provisions in the Inflation Reduction Act.    

Financial Services

ICSC expects November’s election to be extremely consequential with respect to financial services policy. As candidates and elected officials, Vice President Kamala Harris and Trump championed vastly different visions for this segment of the economy. Generally, it is believed that the Trump administration will bring a deregulatory focus with the hope of spurring credit, which would continue the approach taken in their first term. A Trump-led Securities and Exchange Commission (SEC) is likely to tackle rollbacks of controversial policies like the Climate Disclosure Rule and focus more on enhancing capital formation, perhaps even expanding the definition for Accredited Investors. The Trump administration is also likely to consider reforms to the Terrorism Risk Insurance Program, possibly raising thresholds for insured losses.

Environmental and Land Use

Trump announced Lee Zeldin as his nominee to lead the Environmental Protection Agency (EPA).  Zeldin, the former Republican representative from Long Island, New York, has pledged to stop EPA’s regulatory overreach and wetlands regulations are expected to be among his first targets. He was one of more than 200 Republicans who urged EPA Administrator Michael Regan in 2022 to halt a Waters of the U.S. (WOTUS) rulemaking after the U.S. Supreme Court agreed to hear a pivotal challenge to the agency’s water regulations in Sackett v. EPA.  Zeldin’s position on the regulation of PFAS (per- and polyfluoroalkyl substances) for site cleanup is less clear; while in Congress from 2015 to 2023, Zeldin served on the PFAS Task Force and supported a bill in 2021 that directed the EPA to set limits for at least two PFAS in drinking water. President Joe Biden’s SEC has several regulations related to ESG (Environmental, Social, Governance) on its agenda, including rules focused on climate risk disclosure, “greenwashing,” human capital management and corporate diversity — all of which are likely to be discontinued in a Republican-dominated regulatory regime.

Organized Retail Crime (ORC)

If not passed by the end of the 118th Congress, ICSC will continue to lead efforts to reintroduce and pass the Combating Organized Retail Crime Act (CORCA), a bill that would increase federal penalties for ORC and require federal coordination with state and local law enforcement to fight retail crime. The federal appropriations process can also provide federal law enforcement agencies with the resources and a mandate to investigate and prosecute ORC rings. A federal ORC Coordination Center would sit under the U.S. Homeland Security Investigations (HSI) and represents a natural next step to build on the effectiveness of HSI’s Operation Boiling Point and the accomplishments of state and local ORC task forces. 

For more information contact gpp@icsc.com.