House Republicans have yet to strike a deal on how to address the state and local tax (SALT) deduction cap, a lingering hang up that has emerged as one of the biggest sticking points in the party’s bill full of President Trump’s legislative priorities.
Reps. Andrew Garbarino (R-N.Y.) and Young Kim (R-Calif.) — co-chairs of the SALT Caucus — huddled with members of the House Ways and Means Committee during their weekly lunch meeting on Wednesday to discuss the deduction cap, which Republicans from high-tax blue states wants to raise, but deficit hawks are skeptical of.
Leaving the gathering, key lawmakers said an agreement was still elusive.
“I don’t think there’s any deal,” said Rep. David Schweikert (R-Ariz.), who sits on the Ways and Means Committee. “Not yet.”
Rep. Nicole Malliotakis (R-N.Y.), a member of the SALT caucus and Ways and Means panel, said the group is “still working it out,” adding: “We have been discussing a whole bunch of options inside, so we don’t have any particulars just yet.”
“It’s one of the, I think, the stickiest points of the entire reconciliation,” she added, “but we’re getting there little by little.”
Malliotakis said the SALT caucus did not present a number for the new deduction cap in the meeting, and instead the group is “working within the committee to see what we can come up with that is reasonable and can actually get the votes in that room before we worry about everyone else,” referring to the House Ways and Means Committee.
She noted that they are “getting there little by little,” but a number of hang-ups remain, including what the new deduction cap would be, whether the so-called marriage penalty is addressed, if there will be an income cap and whether they allow second homes to be deducted, among other questions. Schweikert also said the panel does not have “the interaction numbers yet,” pointing to data based on what the new deduction cap would be.
Even with the lingering issues, Malliotakis said she was hopeful the group could “settle” the debate over the SALT deduction cap on Thursday.
“We’re gonna go through every provision that we expect to be in the bill and settle on what the committee’s gonna agree to on SALT,” she added.
Wednesday’s meeting marked the latest gathering between House Republicans over the SALT deduction cap, which has been the subject of heated debate for months. Republicans in high-tax blue states — including New York, New Jersey and California — are demanding that the cap, which currently sits at $10,000 for federal deduction, is raised in the Trump agenda bill. Hardline conservatives, meanwhile, are pumping the brakes, raising concerns about how such a move would impact the deficit.
The disagreement is stalling the Trump agenda bill. Speaker Mike Johnson (R-La.) had said he wanted all committees of jurisdiction to advance their parts of the package by the end of this week, but the Ways and Means Committee has not yet scheduled a markup.
The SALT caucus has not said what its ideal deduction cap would be, but a number of lawmakers in the group have introduced their own bills in recent years. 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.
Hardliers, however, are skeptical of some of those proposals
“What is their magic number that they are happy with?” said Rep. Ralph Norman (R-S.C.), a member of the conservative House Freedom Caucus. “The $100,000 figure I’m not for.”
Despite the lack of an agreement, GOP leaders are arguing their plan has not gone awry.
“We’re right on track,” House Ways and Means Committee Chair Jason Smith (R-Mo.) told reporters after the meeting. “Everything is what we’ve always planned and anticipated.”
Some lawmakers, however, are skeptical that there will be any immediate movement. Schweikert, who has served in the House since 2011, harkened back to 2017, when congressional Republicans took months to enact the Trump tax cuts package.
“Grow up,” Schweikert said. “This is the nature when you’re doing complexity.”
