Blue state Republicans are beginning to acknowledge that a full repeal of the cap on state and local tax deductions may not be in the cards. The goal now: finding a SALT reform that is passable.
Rep. Nick LaLota told NOTUS on Tuesday that five Republicans — himself and Reps. Andrew Garbarino, Mike Lawler, Young Kim and Thomas Kean Jr. — have agreed on a number they’d like to see the cap raised to. He wouldn’t share what that number was “in order to preserve the good faith of the negotiations.”
“We’re very resolved to sticking together on this to ensure that we have each other’s backs on this,” he said.
The Tax Cuts and Jobs Act limited state and local tax deductions to $10,000 for both single and married filers — a provision that disproportionately impacts taxpayers in blue states, who pay higher taxes.
Last week, Lawler, a representative from New York, introduced legislation that would lift the cap to $100,000 for individuals and $200,000 for married couples. After a meeting with Donald Trump at Mar-a-Lago over the weekend, Lawler floated a $60,000 cap during a Fox News interview Sunday.
“I want to see the most robust sum that we can get passed. And that’s the biggest question mark — how much cooperation are we going to get across the Congress, not just across the conference,” Rep. Nick Langworthy, who represents a district in western New York, told NOTUS.
There’s little consensus among House Republicans over how to address SALT. The party is staring down months of budget negotiations, during which they’ll have to reconcile the price tag of Trump’s biggest agenda items and pressure from conservative hardliners to significantly cut spending.
Any expansions to the state and local deduction will make that math harder. But if these five Republicans stay unified behind their SALT proposal, Speaker Mike Johnson’s one-seat majority means House Republicans may have to give in to their demands.
While maintaining that a full repeal is the ideal scenario, Lawler rationalized going for less by considering the alternative, a situation where Republicans cannot agree on the provisions and the bill isn’t passed.
“If the tax bill fails to get passed, SALT comes back in its entirety. But, it’s accompanied by the largest tax increase in American history — the alternative minimum tax comes back. So it’s incumbent on everyone to negotiate in good faith,” Lawler said.
Other Republicans in the New York delegation have also seemingly made peace with smaller expansions.
“The low would be 20, the high would be 60. It’d be somewhere in there,” Rep. Nicole Malliotakis told NOTUS of what a “fair number” would look like to her.
There appears to be a broader appetite to at least address joint tax filers.
“There really is a marriage penalty there — a single person gets $10,000; if you’re married, it’s still $10,000. I think that would be an equitable and good solution,” Sen. Susan Collins of Maine, who previously introduced legislation to double the cap for married couples, told NOTUS.
Republicans who met with Trump over the weekend told NOTUS’ Reese Gorman that they believed Trump understood the importance of raising the SALT cap, though they said no consensus was reached.
Many New York Democrats, meanwhile, are remaining adamant that the cap be repealed in its entirety, they say, as was promised.
“All those colleagues that went down there [to Mar-a-Lago] have called for it in the past. Now they’re already backtracking, caving and breaking their own promises. So hopefully they’ll find their backbone,” Rep. Pat Ryan told NOTUS.
These Democrats say they want to see their Republican colleagues hold the line.
“They have a lot of leverage. House Republicans cannot pass anything along party lines without the New York Republicans. At some point, they are going to have to put up or shut up and figure out whether they will honor their promises to their voters or whether they’re going to honor Donald Trump,” Rep. Dan Goldman told NOTUS.
The narrow majority in the house might give New York’s SALT-minded Republicans a lot of leverage, but that narrow majority is also the reason they say concessions will have to be made.
“We have a very small majority, and in order to pass anything, everybody’s gonna need to work together and give a little bit,” Lawler said. “Ultimately we have to build consensus, and so that’s what we’re working towards.”
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Violet Jira is a NOTUS reporter and an Allbritton Journalism Institute fellow. Emily Kennard contributed to this report.