Kentucky Chamber Hosts Federal Issues Summit, Examines National Policies Impacting Businesses

In May, the Kentucky Chamber convened nearly 200 business leaders, policy experts, and public officials for its Federal Issues Summit to dive into the most pressing federal policies shaping Kentucky’s economy, including trade, immigration, Medicaid, regulatory environment, and nonprofit grant funding.

Kentucky Chamber President and CEO Ashli Watts emphasized how federal decisions directly impact Kentucky’s economy. She underscored the Chamber’s role in advocating nationally for policies that support business growth and economic strength.

“In times of uncertainty, one constant remains: the Chamber’s commitment to protecting businesses and building a stronger Kentucky,” said Watts. We will continue to work alongside elected officials, employers, and community leaders to drive solutions, expand opportunity, and ensure the Commonwealth remains a top place to live, work, do business, and raise a family.”

Congressional Overview: A Conversation with U.S. Senator Mitch McConnell

U.S. Senator Mitch McConnell joined Kentucky Chamber President and CEO Ashli Watts for a keynote discussion, reflecting on his decades in public service and sharing insights on critical issues affecting Kentucky.

McConnell highlighted Kentucky’s unique economic position as the most trade-dependent state relative to its GDP, stressing that tariffs are like a tax on businesses and working families. “Trade is not the enemy—it’s a job creator,” he said, emphasizing the need for more trade agreements, not trade wars.

Turning to global security, McConnell, who is now chair of the Senate Appropriations Subcommittee on Defense, called for increased defense spending, citing growing threats from authoritarian regimes, and affirming support for Ukraine as a strategic ally.

On domestic policy, McConnell expressed hope that the Senate will preserve the individual tax cuts from the 2017 Tax Cuts and Jobs Act in ongoing negotiations for the “Big Beautiful Bill.”

He also stressed the importance of bipartisan cooperation to address the national debt and safeguard U.S. economic competitiveness.

Overview of Federal Policy Changes
U.S. Chamber of Commerce Executive Vice President, Chief Policy Officer, and Head of Strategic Advocacy Neil Bradley shared an overview of major federal policy issues.

Bradley noted a drastic economic downturn in early 2025, with GDP forecasts falling below 1% and recession risks doubling. He said much of this shift is due to rising tariffs, which have increased costs and uncertainty for businesses.

He emphasized the particularly drastic impact tariffs have on small and mid-sized manufacturers. Noting the impact on Kentucky, he stated that 40,000 Kentucky manufacturers imported $21 billion in goods last year. Bradley said a 10% tariff amounts to a $2 billion tax increase for these businesses.

On taxes, Bradley said he anticipates the passage of a tax package this summer that will extend the 2017 tax reforms from the Tax Cuts and Jobs Act. With the “Big Beautiful Bill” being negotiated, Bradley raised concerns about raising the debt level and unsustainable federal spending. He stressed that long-term economic stability depends on growing the economy faster than the $36 trillion federal debt.

Bradley said the labor shortage is driven by an aging population and uncertainty around work authorizations for immigrants, noting that three million legal work authorizations were issued in 2024. He also emphasized the potential of domestic energy and artificial intelligence as key drivers of economic growth.

With the right policies, Bradley said the U.S. could achieve 3% annual growth, doubling the economy in 23 years. At 2%, it would take 35 years—a pace he warned would limit opportunity and mobility.

Immigration Policy Changes
Kentucky Chamber Foundation Board Chair Kim Halbauer, region president of Fifth Third Bank, Chamber Board Member Purna Veer, president of V-Soft Consulting Group Inc., Lisa DeJaco Crutcher, CEO of Catholic Charities of Louisville, Inc., and Chelsea Granville Reed, partner at Dentons, addressed recent changes in federal immigration policy and how it is changing Kentucky’s labor force, refugee resettlement, temporary worker programs, and business operations.

Panelists discussed how immigration is important to Kentucky’s workforce and economic needs, especially as the Commonwealth faces widespread labor shortages. They emphasized that outdated immigration policies and changes to programs like H-1B visas hinder access to high-skilled talent.

Speakers also highlighted the contributions of refugees, who often pursue legal pathways to citizenship and launch businesses at higher rates than native-born Americans. The panel advocated for a modernized immigration system that reduces barriers, supports employers, and enhances long-term workforce sustainability.

Impact of Executive Orders on Diversity, Equity, and Inclusion in the Private Sector

Chamber Board Member LaToi Mayo, shareholder at Littler, addressed the implications of recent executive orders focused on diversity, equity, and inclusion in the private sector. She outlined legal and operational considerations for employers navigating this changing landscape.

Mayo explained that recent executive orders have shifted federal DE&I policy, including the repeal of affirmative action requirements for federal contractors. These changes raise legal risks for companies using diversity targets in hiring or promotion.

To adapt, she advised that DE&I efforts be voluntary, legally informed, and focused on broader inclusion strategies rather than specific demographic metrics. She also emphasized the importance of staying informed and adapting policies as the legal environment evolves.

Tariffs and Trade Policies

Focused on shifting U.S. trade policy and its effect on Kentucky industries, Jim Coleman, chairman and CEO of Coleman Crest Farm, Jan de Beer, office partner-in-charge of Frost Brown Todd LLP, Jack Mazurak, director of government and regulatory affairs for the Kentucky Distillers Association, Caleb Ragland, president of the American Soybean Association, and Dr. Charles Aull, vice president of policy of the Chamber explored how tariffs, trade conflict, and supply chain instability are disrupting planning and operations in key sectors.

Panelists from agriculture, distilling, and legal sectors discussed how rising tariffs, now at their highest levels since the 1930s, disrupt Kentucky’s trade-reliant economy.

With bourbon and soybeans as key exports, higher costs on imported ingredients, and restricted international markets limit industry growth, investment, and competitiveness. Panelists emphasized that these trade policies impact producers and have ripple effects through rural communities and the broader state economy.

“Trade has got to be good for both countries when it comes down to it. We’ve got to work where the free market works, and that’s breaking down regulations to reasonable levels, not putting unnecessary barriers in place that make us uncompetitive and make it an advantage just to go to Brazil or go somewhere else to buy our farm products. And that’s the same not just for agricultural products, but for everything,” said Ragland.

Government Grants in the New Administration

With more uncertainty surrounding federal grant funding, nonprofit leaders across the Commonwealth discussed ways to adapt to this new challenge.

Danielle Tharp Clore, executive director and CEO of the Kentucky Nonprofit Network, Jennifer Hancock, president and CEO of Volunteers of America Mid-States, Kentucky Chamber Board Member Amy Luttrell, president and CEO of Goodwill Industries of Kentucky, and Kentucky Chamber Foundation Senior Vice President Beth Davisson discussed how a proposed freeze on grant funding is impacting nonprofit operations and community services across the Commonwealth.

Panelists emphasized that nonprofits are a vital part of Kentucky’s economy, employing one in 10 Kentuckians and providing essential services that support workforce participation, such as housing, child care, and transportation.

They also discussed how federal funding uncertainty is pushing the sector to innovate and do more with less. Despite tight budgets and rising costs, nonprofits adapt by reassessing operations and ensuring every dollar has a measurable impact.

“We have to approach these challenges with creativity and discipline,” said Luttrell. “We can’t afford to waste resources—every decision must be about maximizing our impact on the communities we serve.”

Medicaid Changes
Mark Birdwhistell, senior vice president for health and public policy for the University of Kentucky, James C. Musser, Esq., senior vice president for policy and government relations at the Kentucky Hospital Association, Tom Stephens, president and CEO of the Kentucky Association of Health Plans, and Anne-Tyler Morgan, Esq., member at McBrayer, discussed the future of Medicaid in Kentucky, a program that serves over 1.6 million residents at an annual cost of $17 billion. Describing the system as a “Rubik’s cube,” panelists emphasized the challenge of balancing patient needs, system costs, and provider sustainability.

They examined major provisions in the “Big, Beautiful Bill,” including new oversight requirements for managed care organizations to spend at least 85% of funds on direct care, expanded rural provider reimbursements, and proposed work and community engagement requirements for certain adults, with key exemptions.

Panelists highlighted Kentucky’s focus on access and innovation, pointing to initiatives like “Food is Medicine,” investments in rural health, and stronger partnerships between payers and providers. They also noted the General Assembly’s new Medicaid Oversight Advisory Board as a step toward greater accountability and a more sustainable system.

Regulations in the New Administration
During a discussion on federal deregulation efforts and their implications for Kentucky businesses, Ballard Cassady, Jr., president and CEO of the Kentucky Bankers Association, Charlie Vance, CEO and member at Current HR, LaJuana Wilcher, partner at English Lucas Priest & Owsley, LLP, and Sarah Cameron, partner at Dinsmore & Shohl LLP, reviewed changes in regulations and how industries are adapting to new compliance requirements.

Panelists discussed how the Trump administration is reducing federal rules in areas like labor, the environment, and banking. These changes are meant to reduce red tape for businesses, but panelists said they could also lead to confusion and challenges.

The panel also talked about a recent Supreme Court ruling that ended the Chevron rule, which gave deference to federal agencies in interpreting unclear laws. Now, courts will decide what the laws mean. Panelists said this makes it even more important for Congress to write laws that are clear and easy to understand.

The panelists emphasized the need for businesses to have clear, consistent rules. Without that, planning, following the law, and growing will become more difficult. Panelists stressed the need for innovative policies that reduce confusion and help businesses succeed.

Stay tuned to The Bottom Line for updates on federal policy changes and Kentucky Chamber events.