The Senate’s decision to leave the state and local tax deduction cap at $10,000 isn’t landing well in the House — even as senators argue that changes are on the table.
“If the Senate reduces the SALT number, I will vote NO and the bill will fail in the House,” Rep. Mike Lawler said in a statement after news that the bill text will include the lower cap.
For weeks, the Senate Finance Committee has been flirting with paring down the House’s proposal for the SALT deduction. The House increased the cap to $40,000. Now, Senate Republicans have proposed leaving the cap at $10,000, in bill text released Monday, as Punchbowl News first reported.
The prospect of a $10,000 SALT cap sparked immediate opposition from House moderates, underscoring Congress’ broader battle to pass the budget reconciliation bill by President Donald Trump’s July 4 deadline.
“The Senate doesn’t have the votes for $10k SALT in the House,” Rep. Nick LaLota said.
The SALT Caucus members — a group of Republicans threatening to tank the bill unless it includes the $40,000 cap compromise struck during House negotiations — are from high-tax blue states like New York, New Jersey and California. They’ve drawn criticism from conservative fiscal hawks in the House and more recently the Senate, where senators have argued that the increased cap wouldn’t adequately contribute to spending cuts.
Senators spent Monday evening trying to assauge concerns. Some of those senators were insistent on Monday night that the $10,000 figure is temporary and that negotiations over it are on the table.
“That was just a placeholder,” Sen. Markwayne Mullin told reporters of the $10,000 cap. “I talked to Mike [Lawler] about it.”
Mullin added that he thinks GOP senators and the SALT caucus are on the same page and that the two groups will “absolutely negotiate.”
Though senators sounded hesitant to commit to going with the SALT caucus’ desired $40,000.
Sen. Kevin Cramer told reporters Monday that he saw the House’s $40,000 figure as an “opening bid” and that he would support negotiations, though he suggested that he would like to see a lower number.
“I thought 20 would be a good landing spot, but evidently, we’re just putting on a market for negotiation, which is fine as well,” Cramer said.
SALT caucus members unequivocally criticized the Senate’s figure — even as a placeholder.
“For the Senate to leave the SALT deduction capped at $10,000 is not only insulting but a slap in the face to the Republican districts that delivered our majority and trifecta,” Rep. Nicole Malliotakis wrote in a post on X. “If we want to be the big tent party, we need to recognize that we have members representing blue states with high taxes that are subsidizing many red districts across the country with constituents who benefit from refundable tax credits despite paying zero in taxes.”
House Republican leadership can afford to lose just three votes for the bill to pass, and there are at least four SALT Caucus members who’ve suggested they’ll tank the bill if it does not include their desired cap.
The $10,000 cap that’s reportedly in the bill text is a departure from plans that some senators suggested to reporters last week, like lowering the cap to $30,000 or leaving the exact amount blank to continue negotiations within the chamber and with SALT Caucus members.
Republicans lowered the SALT cap to $10,000 in the 2017 Tax Cuts and Jobs Act. The cap is set to expire entirely after the end of 2025 under that law.
Some fiscal hawks in the Senate, like Sen. Rick Scott, have argued that a higher SALT cap would lead to red states like Florida “subsidizing” blue-state budgets.
Scott echoed the same concerns to reporters Monday, suggesting that even with a reduction in the SALT cap and other cuts on top of the House bill’s text, he was not happy with the state of the bill.
“The cost of government is just too high the so we’ve got to figure out how to reduce the cost of government,” he said. “We’ve got to treat our states fairly.”
Those arguments haven’t swayed the House members from high-tax states. The impending Finance Committee bill text just spurred continued messaging from those members that they will refuse to vote for the bill.
Rep. Elise Stefanik said the cap “will have to go up.”
LaLota suggested that fiscal hawks should put more weight on the possibility that if Congress cannot pass the reconciliation bill by the end of the year due to outstanding disagreements, the Dec. 31 expiration date for the Tax Cuts and Jobs Act will roll around, sunsetting any restrictions on SALT deductions.
“If they’re not sold on the House’s $40k compromise, wait until … SALT goes back to unlimited at year-end. They won’t like that one bit,” the post said.
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Shifra Dayak is a NOTUS reporter and an Allbritton Journalism Institute fellow.