Blue-state Republicans pushing for an increase to the cap on the state and local tax deduction came out of a meeting with House GOP leadership Wednesday saying no deal.
“A lot of numbers to be discussed,” Rep. Nick LaLota told reporters after a Wednesday meeting with leadership where they aimed to hammer out the details. “It was a lively discussion, but we’re still far away from the deal.”
These Republicans say they’re on the same page with leadership about wanting to up the cap, but they’re still at odds about what exactly that increase would look like.
House Speaker Mike Johnson called the meeting “great” and “very productive,” but said members were still trying to “find consensus on the right number.”
Asked if there was an agreement on how much to increase the cap at the meeting, House Majority Leader Steve Scalise told reporters that “there’s a consensus that we’ve got to come to an agreement to fix it.”
At the center of negotiations is Republicans’ math problem. The budget reconciliation bill can’t increase the deficit over 10 years and Republicans have a lot of expensive proposals on the table. The deduction cap, set by the 2017 Tax Cuts and Jobs Act, is currently $10,000. Some tax policy experts have suggested that increasing the SALT cap to the often-floated $20,000 could cost $225 billion. That price tag would go up if lawmakers settle on a higher increase, like Rep. Mike Lawler’s proposed $100,000 deduction cap.
So far, the so-called SALT Republicans — who hail from states with high taxes, such as New York, New Jersey and California — have banded together to negotiate an increased SALT cap.
But as Johnson pushed forward with the reconciliation timelines, it remains unclear how many of these lawmakers will continue to hold out on the larger bill.
Johnson told reporters he’s confident that the House Ways and Means Committee will conduct a markup next week on the parts of the reconciliation bill detailing the future of SALT.
Rep. Nicole Malliotakis did not disclose a particular number, but told reporters that the members discussed a possible cap above the $25,000 amount that some SALT Republicans rejected earlier this month, saying it wouldn’t be high enough to offer people real tax relief.
Many SALT Republicans remain tight-lipped about the specific increase they want to see, and not much changed after Wednesday’s meeting with Johnson.
“I’m not getting into any of that,” Lawler said after the meeting when asked about discussions on specific increases.
On Tuesday, Malliotakis told reporters she’s had a number “in my head from the beginning of this … that will provide relief to the families I represent that are earning under $500,000.”
Wednesday’s meeting sets up a path of continued tension in the Republican conference, with blue-state Republicans at odds with colleagues who are staunchly opposed to spending increases.
While President Donald Trump supported the $10,000 cap in the 2017 legislation, blue-state Republicans who met with Trump in January signaled that the president is open to increasing it. Scalise emphasized the president’s support Wednesday.
Meanwhile, factions have also emerged within the group of SALT Republicans. LaLota told reporters that he and Reps. Lawler, Young Kim, Thomas Kean Jr. and Andrew Garbarino would make any decisions on the cap as a “united front,” even if it would drag the process out beyond next week’s markup.
Still, the members aren’t concerned that their lack of progress on the specifics of SALT math would get in the way of Johnson’s ambitious goal of teeing up a floor vote on the final reconciliation bill by Memorial Day.
“I think that we’re in a very large negotiation right now with 220 or so Republican House members who have a lot of different priorities, but I’m confident we’ll land the plane,” LaLota said.
That said, SALT isn’t the only point of contention. LaLota and other blue-state Republicans are also negotiating against sizable Medicaid cuts — an issue the party has yet to reconcile.
—
Shifra Dayak is a NOTUS reporter and an Allbritton Journalism Institute fellow. Katherine Swartz, a NOTUS reporter and an Allbritton Journalism Institute fellow, contributed to the report.