Updated on May 22 at 12:26 a.m. and 7:01 a.m. to reflect current events

Roofing contractors received some welcome news from the protracted negotiations underway in the U.S. House of Representatives through the proposed 2026 budget, H. Con. Res. 1, that could codify several actions long-sought by the industry and put many minds at ease.

Also known as the "One Big, Beautiful Bill Act," the measure contains several tax reform efforts the National Roofing Contractors Association has long advocated for during its annual Roofing Day in D.C. event.

The legislation finally cleared a key hurdle Wednesday evening after a reported 22-hour marathon session in the Rules Committee. After that, it was finally discharged and passed the full House just before 7 a.m., with two members of the majority and all Democrats voting no.

Among the bill's provisions are:

• Increasing Section 199A pass-through deductions for small businesses. This allows small businesses, including S corporations, partnerships and sole proprietorships, to subtract 23% of their qualified business income from their taxes. The previous percentage was 20%. Pass-through businesses employ an estimated 62% of the private sector workforce.
• Estate tax exemption increased to $15 million. The provision makes the estate tax, which was doubled in the Tax Cuts and Jobs Act, permanent, setting it to $15 million for single filers and $30 million for married couples.
• Section 179 Cap. This raises expensing nonresidential real property from $1 million to $2.5 million.
• Pell Grant expansion. It includes training and certification programs that help level the playing field between skills development for roofing trades and college programs.
• 529 Program expansion. Like the Pell Grant, this includes training and certification, which will address workforce needs by providing options for saving for skills training.
• Overtime tax eliminations. This would eliminate taxes on eligible workers’ overtime pay, which would last for the current 2025 tax year through 2028.
• Manufacturing support. A new provision provides a 100% deduction of the cost of certain new factories, improvements to existing factories and other structures. This applies to projects started in 2025 and before Jan. 1, 2030.
• Equipment and vehicles. A 100% bonus depreciation restoring full and immediate expensing for investments in machines, equipment and vehicles.

The Section 199A provision, when paired with a permanent 37% top rate, would align the top rates paid by pass-throughs closer to the 21% corporate rate.

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"This bill is overwhelmingly positive for the roofing industry as it makes permanent and expands numerous key tax provisions widely utilized by NRCA members," NRCA officials said in an email to RC. "NRCA continues to work with Congress to ensure that they know how each of these provisions will affect our members, and it is likely we will see additional changes to this legislation before it is signed into law."

The NRCA was among 90 Main Street Employers Coalition members that signed a joint letter praising the bill while it was being debated.

While the discharge by the Rules Committee was hard-fought, the bill still faces hurdles to pass the full House, and many differences remain within the majority. 

The headwinds were far-flung, from looming cuts to social programs like Medicaid and the Supplemental Nutrition Assistance Program to a cohort demanding the rollback of caps on deductions of state and local taxes, known as SALT taxes.

“Reinstating full expensing, expanding deductions for production property, raising the interest expense limitation, and restoring R&E expensing will help ensure American businesses remain competitive,” the letter states.

The SALT provisions are holdovers from Trump's 2017 budget, implemented as a savings measure to reduce the overall cost of the Tax Cuts and Jobs Act. 

The 2026 budget proposes raising the SALT cap from $10,000 to $40,000 for those with a modified adjusted gross income of $400,000 or less. SALT taxes are a significant burden for mostly Northeast states with considerably higher state and local tax obligations.  

“The limitation on SALT deductions for certain pass-through entities is needlessly broad and complex, while tightening and extending the cap on excess losses would make worse a policy that should never have been enacted in the first place,” the letter states.     

Tax Cuts at What Cost?

While Trump campaigned on reducing the national debt, extending his 2017 tax cuts, and eliminating wasteful spending and government fraud, the nonpartisan Congressional Budget Office initially said the proposed budget would add at least $2.3 trillion to the country's $36 trillion national debt over 10 years. That figure is the most conservative of the estimates. 

According to the AP, the package adds $350 billion in new spending. The Joint Committee on Taxation estimates that, as written, the budget proposal would increase deficits by $3.8 trillion through 2034, or 1.1% of GDP. 

The nonpartisan group Committee for a Responsible Federal Budget says the Tax Cuts and Jobs Act extensions and revivals would add $4.2 trillion to the deficit through 2029 as written and $4.9 trillion if made permanent.

The bill offsets some of the expenses by repealing and phasing out multiple Inflation Reduction Act energy credits.

The bill terminates section 25D residential solar tax credits at the end of the year instead of the original date of Dec. 31, 2034. Utility-scale solar’s tax credits will remain in place through 2028 before being phased down to zero in 2032.

"As with all bills of this complexity, there can be tradeoffs, such as the termination of the clean energy tax credit that is of interest to the residential solar market," the NRCA said.

Similarly, the bill terminates the New Energy Efficient Home Credit for homes acquired after Dec. 31, 2025 — or Dec. 31, 2026, if construction began before May 12, 2025.

“This bill would pull the rug out from under one of the most dynamic parts of the American economy. These tax credits have helped deliver billions of dollars in new investments in homegrown American energy,” said Christy Goldfuss, executive director of the Natural Resources Defense Council.

Opponents of the bill criticize provisions that call for cuts to services and programs, which were made to find $800 billion in savings to pay for the tax cuts. They say any gains could be overwhelmed by health care and food assistance cuts.

The bill calls for hundreds of billions of dollars in cuts to Medicaid and additional steps to enroll or stay on it, such as work requirements. Medicaid provides health coverage to low- and middle-income households. The nonpartisan Congressional Budget Office estimates that at least 8.6 million people would lose health insurance coverage by 2034. 

A tracking poll in April by health policy group KFF shows 61% of Americans oppose major cuts to staff and spending at federal health agencies.

Multiple provisions that will reduce discretionary spending, such as the Medicaid work requirements and ending the clean energy credits, will not take effect until 2029.

The SNAP cost shifts start in 2027, after the midterms. Other provisions, like the overtime tax exemption, will only last until 2028. A tax break for citizens ages 65 and older also ends in 2028.

How it Passed

The fate of the One Big, Beautiful Bill remained tenuous until the end. Republicans could only afford to lose fewer than four votes to pass it on a party-line vote, which in the end is what happened.  

Trump visited Capitol Hill on Tuesday in an attempt to shore up the votes needed for the legislation to pass, speaking with House Republicans in blunt terms, telling them "Don't f*ck around with Medicaid" and telling those wanting SALT cap raises, like Rep. Nick LaLota (R-N.Y.), to let it go.

He also called out holdout fellow Republicans to support the bill, specifically Rep. Thomas Massie (R-Ky.), who has previously opposed many of these bills.

“I don’t think he wants to talk about cutting spending,” Massie told Politico after the president’s presentation to the House Republican Conference. “He just said, ‘go after waste, fraud and abuse.’ … It means: ‘Quit talking about it, Freedom Caucus.’” 

The budget reconciliation bill now heads to the Senate, where passage reportedly remains grim. Several Senators, including stalwart conservatives like Josh Hawley (R-Mo.) and Ted Cruz (R-Tx), have been vocal about the number of cuts to social services that would disproportionately affect Red states.

While Johnson has requested that nothing be changed, the Senate is unlikely to adhere. The most likely scenario would be competing legislation from the Senate, which would then send both bills into a process known as reconciliation, where differences are ironed out, if possible. 

Republicans are using a budget reconciliation process to pass the bill, which would allow them to bypass a Democratic Senate filibuster. The stipulation to reconciliation is that the overall amount of the bill may not exceed the previous year's budget.