The decision of the year

With the 2024 elections rapidly approaching, roofing professionals should make sure they are well-informed about federal issues of importance to the industry. The new occupant of the White House, as well as which party controls Congress, will have significant implications for entrepreneurs who wish to sustain and grow their businesses in the years ahead.

On Nov. 5, Americans will have the opportunity to decide whether to entrust the next four years of the presidency to Vice President Kamala Harris or turn once again to former President Donald Trump. The candidates have differing positions on key policy issues NRCA members should consider when deciding which candidate to support. In addition, voters in battleground states and congressional districts will elect lawmakers for the 119th Congress, which will convene in January 2025.

As the fall campaign unfolds, the presidential contest and the battle for control of Congress are competitive. Before President Biden’s departure from the presidential race, Trump had built a modest but stable lead in the polls. But with Biden stepping aside and the rapid consolidation of Democrats around the Harris candidacy, the race has narrowed.

At press time, Harris held a 1.4 point lead (48.1 to 46.7) in the RealClearPolitics national polling average and she led by 0.1 points (47.8 to 47.7) in the RCP average from battleground states. It should come as no surprise the election will be close given the razor-thin margins that decided the 2016 and 2020 presidential elections. Moreover, the RCP generic ballot test for voter preference for control of Congress currently gives Democrats a slim 1.2 point edge.

Both candidates’ running mates, Sen. J.D. Vance (R-Ohio) and Minnesota Gov. Tim Walz (D), were selected, in part, because of their aligning philosophies and policies instead of an ability to pull in a different portion of the electorate.

Some commentators are calling the 2024 contest the “vibes election” with the implication that policy issues don’t really matter to voters. This isn’t new; it’s a different way of saying many voters support the candidate they would rather have a beer with. Nevertheless, the policies of the winner will be critical to future legislative battles, and roofing industry professionals should look carefully at the records of candidates when determining who deserves their support.

Taxes and tariffs

Federal tax relief that provides the roofing industry with maximum opportunities to reinvest and grow their businesses remains a top priority. Each party has different tax philosophies that will be influenced by the growing national debt, which will become unsustainable at some point. NRCA remains committed to advocacy within Congress and any administration on the economic value and revenue potential of pro-growth tax policy.

In 2025, the stage is set for the most consequential tax policy debate since 2017 when Congress passed the Tax Cut and Jobs Act. The act lowered rates for nearly all taxpayers while eliminating many credits and deductions. The law reduced the corporate rate from 35% to 21% and lowered individual rates, as well, with the top rate falling from 39.6% to 37%. Critically, it provided Section 199A, a 20% deduction in qualified business income for entities organized as pass-through businesses, which includes most NRCA member companies.

Also, the estate tax exemption was doubled to $11.18 million, which is important for family-owned businesses. NRCA was especially pleased the law permanently included nonresidential roofing as qualifying property under Section 179 of the tax code, which allows small and midsized businesses to fully expense roof system repairs and replacements rather than depreciating the asset, helping sustain strong demand in the nonresidential market.

The Tax Cuts and Jobs Act was approved by a Republican Congress using budget reconciliation rules that have unique spending constraints. As such, some provisions in the law are scheduled to expire at the end of 2025, including the individual tax rates, the larger estate tax exemption and the Section 199A deduction for pass-through businesses. Absent congressional action, the expiration of these provisions on Jan. 1, 2026, will result in a significant tax increase for many businesses. As the corporate rate of 21% is permanent, this also will disadvantage one type of business over another.

NRCA continues to make progress on these tax relief provisions, including through its support of the Main Street Tax Certainty Act, which would make Section 199A permanent, and the Death Tax Repeal Act. Because of budgetary constraints, the Tax Cuts and Jobs Act scheduled a switch in the tax treatment of businesses’ research and development expenditures from immediate deductions in the year of the investment (full expensing) to spreading the deductions over five years (amortization), effective in tax year 2022. Earlier this year, the House passed a bill that included the restoration of full expensing for research and development expenditures, but the bill failed to garner 60 votes to pass in the Senate.

Trump plans to keep the 2017 law largely intact, which comes as no surprise as it was his primary legislative achievement. He supports making permanent the current individual rates and the 199A deduction and proposes lowering the corporate rate from 21% to as low as 15%. He also supports a full repeal of the estate tax for family-owned businesses and would likely support the restoration of full expensing for research and development. By maintaining most tax rates from the 2017 law, Trump’s policy would help sustain economic growth but could increase budget deficits if not accompanied by spending cuts.

Another area to watch is the future of renewable energy tax credits approved by a Democrat-controlled Congress under Biden through the Inflation Reduction Act. Under a Trump presidency and Republican-controlled Congress, many of these credits could be repealed or modified.

Harris’ tax policy agenda is somewhat less well-defined. However, she does have a distinct track record from being a vice president, senator and 2020 presidential candidate.

During her 2020 presidential campaign, Harris proposed tax policies that were similar to those of the Biden-Harris administration but sometimes contained more aggressive tax increases. Her campaign proposals included increasing the corporate rate to 35%, increasing the top individual rate to 39.6%, raising capital gains tax rates for some taxpayers, expanding the estate tax and creating a 4% “income-based premium” on households making more than $100,000 annually to pay for her version of “Medicare for All.” She also proposed a $3,000 refundable tax credit ($6,000 for married couples filing jointly) to provide tax relief directed at low and middle-income taxpayers.

Harris has indicated her tax proposals are similar to those of the Biden-Harris administration. This includes a pledge to not support any tax increases on households making less than $400,000 per year. It also includes raising the corporate rate to 28%, increasing the top individual marginal rate to 39.6% and other tax increases on individuals earning more than $400,000. On renewable-energy-related tax credits and deductions, Harris’ record indicates she would maintain these and other climate-focused provisions enacted in 2022. Overall, based on Harris’ record, the chances for tax increases on individuals (particularly high earners) and businesses are much greater if she were elected.

Tariffs on imported goods also have significant implications for the roofing industry and the broader U.S. economy.

Trump has indicated he will consider imposing a 10% or higher universal baseline tariff on all imports, increase current tariffs on China to at least 60% and other potential tariff increases. These proposals could be problematic for the U.S. economy as they would raise the cost of products for consumers and will likely invite retaliation on U.S. exports. The Tax Foundation estimates Trump’s tariff proposals, if fully implemented and met with inkind retaliation from U.S. trading partners, would “more than offset the entire benefit of the major tax cuts” he has proposed.

The Biden-Harris administration has retained most of the tariffs of the Trump administration while reducing some and increasing others. Harris has claimed she is “not a protectionist Democrat,” but if she is elected there will be much pressure on her to retain existing tariffs from labor unions and other constituencies.

Workforce policy

Nearly all NRCA members indicate workforce development challenges make it increasingly difficult to sustain and grow their businesses. NRCA continues to develop and support innovative solutions to the industry’s workforce needs through funding for Perkins Basic State Grants, reform of the Workforce Innovation and Opportunity Act, and immigration policy that meets the industry’s needs. These workforce solutions, along with pro-growth tax policy, are frequent talking points during the industry’s annual advocacy day, Roofing Day in D.C., which will next be held April 8-9, 2025.

In 2018, NRCA successfully advocated Congress to approve legislation to reform and expand Perkins Basic State Grants that fund career and technical education programs at state and local levels. Since then, NRCA has fought for increased funding for Perkins Basic State Grants, with Congress steadily increasing funding to more than $1.4 billion. Although Perkins Basic State Grants have bipartisan support, government deficits will make further funding boosts more difficult.

Another critical initiative is reform of the Workforce Innovation and Opportunity Act, which provides funding for workforce training programs. Reform of these programs to make them more accessible to NRCA members is a top priority. NRCA was pleased with the approval of A Stronger Workforce for America Act by the House in April with strong bipartisan support. This legislation contains strategies to provide new opportunities for employers to address workforce development. The Senate is considering similar legislation but, unfortunately, negotiations have stalled. If Congress does not finalize a bill this year, there will be renewed effort in 2025, and either presidential candidate would likely support a bipartisan bill that emerges from Congress.

Immigration reform is another major component of workforce policy. Because of an aging workforce and other demographic trends, future demand for employees cannot be met by native-born workers alone. NRCA has made support for immigration reform that addresses security, economic and workforce needs a major priority for many years. Regrettably, lawmakers in Congress remain at an impasse on immigration and border security despite numerous attempts to strike bipartisan deals under presidents of both parties.

Immigration likely will be a top priority for either presidential administration. Early in his presidency, Trump supported an immigration plan designed to reform the system and combat illegal immigration. NRCA opposed this plan because it would have reduced legal immigration and lacked visa reform needed to address workforce needs, and the bill failed in Congress. On the regulatory side, the Trump administration granted some additional H-2B seasonal visas to meet demand, but, generally, the administration was opposed to increased legal immigration to address workforce shortages. According to one estimate, legal immigration under Trump was down 49% by the end of his term.

Trump also rescinded the Executive Order that created the Deferred Action for Childhood Arrivals program, which provides temporary legal status for undocumented immigrants who entered the U.S. as minor children. He also terminated Temporary Protected Status for those seeking refuge as a result of natural disasters or civil strife in their native countries. A federal court has since found DACA unconstitutional, with the case now before the Supreme Court, and courts blocked the Temporary Protected Status termination. Trump attempted to work out a deal with Congress to address DACA in exchange for tougher border security, but Congress ultimately rejected the deal. The fate of the individuals involved in the DACA and Temporary Protected Status programs, who could become subject to deportation, will be determined by the next president unless Congress passes legislation to address these matters.

During the 2024 campaign, Trump has doubled down on his hardline stance on border security and immigration, including a promise to implement the “largest deportation program in American history.” If reelected, Trump may again try to reach a deal on immigration with Congress, especially because there is broad agreement among economists that more immigration is vital to boosting economic growth. On occasion, Trump has commented he recognizes the need for legal immigration to address workforce shortages, but the broader trend from his first term record and current campaign rhetoric indicates a second term would likely be reminiscent of the first.

Harris’ position on immigration is not as well-established but may follow the Biden-Harris administration. Biden proposed a comprehensive immigration plan early in his first year that had many positive components but failed to include a visa program needed to meet workforce needs, presumably because labor unions were skeptical. Pending the legal challenge before the Supreme Court, Biden has maintained DACA, restored Temporary Protected Status and supported legislation to grant such individuals the opportunity to obtain permanent legal status, which NRCA supports. The Biden-Harris administration’s record on border security, at least until the recent executive action to tighten asylum rules, has created a political liability for Harris given her prominent role in border security and immigration policy. Also, she endorsed a bipartisan border security bill released in early 2024 that could be the basis for future negotiations on a broader immigration deal in Congress next year.

Given the hyperpolarization of immigration and border security issues, it will be an enormous challenge for either candidate to provide the leadership necessary to guide Congress toward bipartisan solutions that have eluded lawmakers for more than two decades.

Regulatory policy

NRCA has long been focused on federal regulatory policy as members indicate navigating regulations continues to have major implications for their businesses. Regulation is an executive branch authority, and the president will substantially affect regulatory policy for the next four years.

Given the inherent safety risks in the roofing industry, Occupational Safety and Health Administration regulations are critical. Under the Biden-Harris administration, OSHA has pursued several new regulations that will significantly affect NRCA members, most notably a recently proposed heat illness standard.

NRCA has been proactive in helping members protect employees from heat illness and arranged for contractor members to participate in a Small Business Review Panel to provide detailed information to agency officials related to developing this regulation. Although OSHA adopted some recommendations, the proposed rule remains a significant concern. NRCA will file comments with OSHA to improve the final rule, but it is unclear how responsive the agency will be.

Additionally, NRCA has opposed an OSHA regulation that modified the rules governing workplace inspections. The regulation could be problematic for employers because it is costly and confusing and lacks a rationale for advancing workplace safety. The regulation became effective in May, and NRCA is monitoring its implementation and pending legal challenges.

NRCA also is closely monitoring regulation of PVC under the Environmental Protection Agency. EPA recently denied a petition requesting that discarded PVC be classified as hazardous waste. However, the agency is still in the process of a risk evaluation of vinyl chloride, which is used to make PVC under the Toxic Substances Control Act. This evaluation is part of the Biden-Harris administration’s Cancer Moonshot mission, a series of initiatives to accelerate the fight against cancer. NRCA continues to provide guidance during this process through coalition partners.

The Department of Labor under the Biden-Harris administration has been aggressive in moving forward with other new regulations, such as a rule regarding payment of overtime compensation to employees, which NRCA opposed because it was overly broad and ambitious in scope.

Also, DOL issued a final rule on National Apprenticeship System Enhancements, which is intended to strengthen labor standards, promote apprenticeship and improve accountability measures within the system. NRCA recommended the agency provide more flexibility and streamlining, but the rule remains problematic by making it more costly for employers, especially small businesses, to pursue apprenticeship strategies.

Given the record of the Biden-Harris administration, it should be expected federal agencies generally will continue with a hardline regulatory approach under Harris if she is elected. With respect to OSHA, a Harris administration would certainly finalize the OSHA heat standard largely in proposed form and potentially encourage the EPA to find PVC as a high-risk material.

If Trump is elected, it is likely his second administration would pursue deregulatory policies at most federal agencies. During his first term, agencies repealed or made substantial modifications to many regulations issued during the Obama administration, and it is likely there will be similar efforts to repeal or modify many of Biden’s regulations. However, it should be noted the first Trump administration also sided with labor unions in favor of some regulations during his first term, and that pattern could continue in a second administration.

Congressional seats

Control of the 119th Congress will be just as important as who controls the White House because any split in party control of either chamber will affect the ability to pass legislation.

Democrats currently control the Senate by a narrow 51-49 majority (all independents currently caucus with Democrats), but several Senators in states Trump won in 2020 are up for reelection. West Virginia Gov. Jim Justice (R) is the strong favorite in that state’s open seat, which would result in an evenly split Senate. Three Democrat incumbents, Sens. Sherrod Brown (D-Ohio), Jon Tester (D-Mont.) and Jackie Rosen (D-Nev.), face strong Republican challengers in races rated as toss-ups, and the race to replace retiring Sen. Debbie Stabenow (D-Mich.) also is close.

In addition, Democrats are favored but Republicans are within striking distance in contests in Arizona, Maryland, Pennsylvania and Wisconsin. Overall, Republicans have a good chance of winning at least two to five seats. For Democrats to retain control, they can only lose one seat while holding the presidency as the vice president provides tie-breaking votes in the Senate.

With the Senate favored to flip to Republican control next year, all eyes are on the battle for the House. Republicans currently have a slim majority, and Democrats need to win a net four seats to take control in 2025. According to Cook Political Report, 22 House races are rated toss-ups, evenly split between seats held by Democrats and Republicans. Cook Political Report also rates another 28 Democrat seats and 19 Republican seats as moderately or potentially competitive depending on how the political environment evolves.

Given recent developments in redistricting, Republicans probably have a slight advantage in maintaining their majority. But unless there is a dramatic shift in the political environment, the contest should be close and could be determined by a handful of races in New York and California in the days or weeks after election day.

Presidential election performance can significantly affect Senate and House races and, ultimately, which party controls Congress. However, most legislation still will require bipartisan support unless either party decides to overturn Senate precedent and remove the rule requiring 60 votes in the Senate for approval.

If either party controls the White House and Congress, you can anticipate high-priority tax legislation coming up under complicated rules that only require a simple majority to pass but must also follow narrow budgetary requirements. Republicans used this process to pass the Tax Cuts and Jobs Act in 2017, and Democrats used it to pass the Inflation Adjustment Act in 2022. Additionally, every four years, Congress can repeal certain regulations of the previous administration under the Congressional Review Act with simple majorities in the House and Senate. If Harris wins but Republicans control the Senate, there will be legislative gridlock unless there is a willingness from both parties to work together.

The long game

NRCA is a full-time advocate for the roofing industry in Washington, D.C., fighting for market-oriented policies that enable members to build prosperous businesses and provide rewarding careers for hard-working individuals. It’s important for members to be well-informed and engaged in the political process, so take the time to educate yourself and be sure to vote. NRCA looks forward to working with the new president and lawmakers in Congress on a bipartisan basis to advance the industry in 2025 and beyond.

Disclaimer: ROOFPAC is the federally registered political action committee of NRCA, and contributions will be used for political purposes. Contributions to ROOFPAC are not tax deductible and the name, address, occupation and employer’s name of individuals whose contributions exceed $200 during a calendar year will be reported to the Federal Election Commission. Contributions are voluntary, and you have the right to refuse to contribute without any reprisal.

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DUANE L. MUSSER is NRCA’s vice president of government relations in Washington, D.C.