SALT Republicans, leadership ‘still have some work to do' after key meeting

Yahoo

01-05-2025

House Republicans in favor of increasing the deduction cap on state and local taxes (SALT) said they 'still have some work to do' after the group huddled with Speaker Mike Johnson (R-La.) for a key meeting on the contentious issue Wednesday afternoon.
The gathering — which marked the first major conversation about SALT relief since the budget reconciliation process entered its final stage in the House — comes as GOP leadership is eyeing a meeting next week to advance the Ways and Means Committee's portion of the bill, a plan that could be delayed amid the hang-ups over SALT.
Rep. Nick LaLota (R-N.Y.), one of the most prominent members pushing for SALT relief, said the group discussed 'specific numbers' at the gathering, but noted that he 'wouldn't consider anything an offer.' A source told The Hill that 'no official numbers' or 'offers' were presented, but the group discussed 'the policy needs and the political needs' for a higher SALT deduction cap.
'I think we need some more dialogue,' LaLota said.
While no number was agreed to, Republicans gave a look into what would be unacceptable for them. Rep. Nicole Malliotakis (R-N.Y.) said increasing the SALT deduction cap to $25,000 'is not gonna cut it.'
Leaving the meeting, Speaker Mike Johnson (R-La.) said they had 'not yet' settled on a new number for the deduction cap, but that he 'heard some very valuable input from members of the SALT states and completely understand their priorities.'
'We're trying to work that in and find consensus on the right number, which we will,' he added.
Despite the optimistic tone, there was some frustration at the meeting. LaLota said there was 'intense fellowship' during the gathering, pointing to the 'different personalities, different priorities' within the House GOP conference.
Two sources told The Hill that there was particular frustration with Rep. Claudia Tenney (R-N.Y.), a SALT relief proponent who sits on the Ways and Means Committee. One of the sources said Tenney was 'trying to put [SALT caucus members] in check a little bit' and 'telling them to be realistic.'
'Claudia was being as unproductive as you could be,' the second source said.
The Hill reached out to Tenney's office for comment.
A number of members pushing for SALT relief were at the meeting, including LaLota, Tenney, Malliotakis, and Reps. Mike Lawler (R-N.Y.), Andrew Garbarino (R-N.Y.), Young Kim (R-Calif.) and Nick Langworthy (R-N.Y.). Rep. Elise Stefanik (R-N.Y.) was also present. The group met with Johnson and House Ways and Means Committee Chair Jason Smith (R-Mo.).
The lawmakers convened as leadership is looking to hold a meeting to finalize and advance the Ways and Means Committee's portion bill full of President Trump's legislative priorities next week. On Tuesday, Johnson said he wants the remaining markups to be held next week as he looks to get the entire package cleared in the House by Memorial Day.
That plan, however, is in question as members remain at odds over SALT relief. Malliotakis said holding a markup next week would be 'tight,' given the amount of progress made, but it 'could possibly' happen.
'We have, obviously, a goal, and hopefully we're gonna get there before next week,' she added. 'But it's up to the Speaker, it's up to the chairman, it's above my pay grade.'
After the meeting, Johnson said it is his 'expectation' that the markup will take place next week.
Malliotakis said she plans to brief the Ways and Means Committee on the group's Wednesday afternoon conversation on Thursday and 'see what the other members of the committee say.'
As Republicans from high-tax blue states push for SALT relief, GOP deficit hawks are voicing opposition to an increase in the cap, raising concerns about how such a policy would impact their goal of making the final Trump agenda bill deficit neutral.
'Maybe it's just because I don't want to subsidize high-tax, blue-state jurisdictions,' Rep. Chip Roy (R-Texas) said when asked why he is opposed to increasing the cap. 'Maybe it's because I can do math… If you lift the cap to $100,000 that'll be how much? Over a trillion dollars. So the same folks are gonna say well, we gotta make sure we extend the tax cuts and make them permanent, but we can't touch Medicaid, but we need to lift our SALT cap. And I'm like okay, come in there and show me the arithmetic on the board.'
Johnson and Smith will have to weigh those opposing stances and find a path forward as they look to get the package over the finish line, which will require near unanimity in the House GOP conference amid their razor-thin majority.
The debate over SALT relief has been ongoing since 2017, when Trump's tax package, portions of which expire this year, placed a $10,000 deduction cap on SALT. Since then, Republicans and Democrats who represent high-tax blue states have been pushing to increase the cap, introducing legislation that would raise it thousands of dollars.
Lawler, for example, introduced a bill in January that would increase the SALT deduction cap to $100,000 for single filers and $200,000 for married couples who file jointly. LaLota, meanwhile, has a bill that would hike the cap to $15,000 for single filers and $30,000 for married people filing together.
If the SALT cap is not extended, taxpayers would have the ability to deduct all eligible state and local income, revenue from sales, property taxes and foreign income taxes. According to a February 2024 brief from Penn Wharton, such an outcome would cost an additional $1.2 trillion.
As the plan for a markup next week looms, SALT caucus Republicans are recognizing the tenuous nature of the budget reconciliation negotiations, but are holding out hope that their priorities will be reflected in the final bill.
'People have described the Ways and Means job to be much like a Rubik's cube or a game of Whack-a-Mole. When you solve one issue, another one comes up. So there's a lot for them to deliberate over,' LaLota said. 'I appreciate the hard work that they're gonna have to do to figure out all the different variables in the tax code. SALT, of course, is the most important one to me.'
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