Home Republicans in favor of accelerating the deduction cap on state and native taxes (SALT) stated they “still have some work to do” after the group huddled with Speaker Mike Johnson (R-La.) for a key assembly on the contentious difficulty Wednesday afternoon.
The gathering — which marked the primary main dialog about SALT reduction for the reason that price range reconciliation course of entered its closing stage within the Home — comes as GOP management is eyeing a gathering subsequent week to advance the Methods and Means Committee’s portion of the invoice, a plan that may very well be delayed amid the hang-ups over SALT.
Rep. Nick LaLota (R-N.Y.), some of the outstanding members pushing for SALT reduction, stated the group mentioned “specific numbers” on the gathering, however famous that he “wouldn’t consider anything an offer.” A supply instructed The Hill that “no official numbers” or “offers” have been offered, however the group mentioned “the policy needs and the political needs” for the next SALT deduction cap.
“I think we need some more dialogue,” LaLota stated.
Whereas no quantity was agreed to, Republicans gave a glance into what could be unacceptable for them. Rep. Nicole Malliotakis (R-N.Y.) stated growing the SALT deduction cap to $25,000 “is not gonna cut it.”
Leaving the assembly, Speaker Mike Johnson (R-La.) stated they’d “not yet” settled on a brand new quantity for the deduction cap, however 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.
Regardless of the optimistic tone, there was some frustration on the assembly. LaLota stated there was “intense fellowship” throughout the gathering, pointing to the “different personalities, different priorities” inside the Home GOP convention.
Two sources instructed The Hill that there was specific frustration with Rep. Claudia Tenney (R-N.Y.), a SALT reduction proponent who sits on the Methods and Means Committee. One of many sources stated 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 supply stated.
The Hill reached out to Tenney’s workplace for remark.
Numerous members pushing for SALT reduction have been on the assembly, together with LaLota, Tenney, Malliotakis, and Reps. Mike Lawler (R-N.Y.), Andrew Garbarino (R-N.Y.), Younger Kim (R-Calif.) and Nick Langworthy (R-N.Y.). Rep. Elise Stefanik (R-N.Y.) was additionally current. The group met with Johnson and Home Methods and Means Committee Chair Jason Smith (R-Mo.).
The lawmakers convened as management is trying to maintain a gathering to finalize and advance the Methods and Means Committee’s portion invoice stuffed with President Trump’s legislative priorities subsequent week. On Tuesday, Johnson stated he needs the remaining markups to be held subsequent week as he seems to get the complete package deal cleared within the Home by Memorial Day.
That plan, nonetheless, is in query as members stay at odds over SALT reduction. Malliotakis stated holding a markup subsequent week could be “tight,” given the quantity of progress made, but it surely “could possibly” occur.
“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 assembly, Johnson stated it’s his “expectation” that the markup will happen subsequent week.
Malliotakis stated she plans to transient the Methods and Means Committee on the group’s Wednesday afternoon dialog on Thursday and “see what the other members of the committee say.”
As Republicans from high-tax blue states push for SALT reduction, GOP deficit hawks are voicing opposition to a rise within the cap, elevating considerations about how such a coverage would impression their objective of creating the ultimate Trump agenda invoice deficit impartial.
“Maybe it’s just because I don’t want to subsidize high-tax, blue-state jurisdictions,” Rep. Chip Roy (R-Texas) stated when requested why he’s against growing 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 should weigh these opposing stances and discover a path ahead as they give the impression of being to get the package deal over the end line, which would require close to unanimity within the Home GOP convention amid their razor-thin majority.
The talk over SALT reduction has been ongoing since 2017, when Trump’s tax package deal, parts of which expire this 12 months, positioned a $10,000 deduction cap on SALT. Since then, Republicans and Democrats who symbolize high-tax blue states have been pushing to extend the cap, introducing laws that might increase it hundreds of {dollars}.
Lawler, for instance, launched a invoice in January that might enhance the SALT deduction cap to $100,000 for single filers and $200,000 for married {couples} who file collectively. LaLota, in the meantime, has a invoice that might hike the cap to $15,000 for single filers and $30,000 for married folks submitting collectively.
If the SALT cap is just not prolonged, taxpayers would have the power to deduct all eligible state and native earnings, income from gross sales, property taxes and overseas earnings taxes. In accordance with a February 2024 transient from Penn Wharton, such an end result would price an extra $1.2 trillion.
Because the plan for a markup subsequent week looms, SALT caucus Republicans are recognizing the tenuous nature of the price range reconciliation negotiations, however are holding out hope that their priorities can be mirrored within the closing invoice.
“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 stated. “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.”
