A late-night discussion between Speaker Mike Johnson (R-La.) and moderate Republicans, who are advocating for an often-overlooked tax credit, concluded Monday without reaching an agreement. This ongoing conflict highlights a significant hurdle in finalizing Trump’s domestic agenda.
“We had some questions that still need answers. They’ll have to provide more data,” Rep. Andrew Garbarino (R-N.Y.) noted. “They’re hoping to have some numbers for us by morning.”
Moderate lawmakers are pushing for a substantial increase in the state and local tax (SALT) deduction cap, currently pegged at $10,000 under the Republican Tax Act of 2017. While the cap aims to limit benefits for wealthy taxpayers, critics argue that it adversely affects middle-class individuals in high-tax states like New York, New Jersey, and California.
The existing cap conflicts with a proposed $30,000 limit included in the Republican package that passed the Budget Committee on Sunday night. Moderates are urging Johnson to elevate that figure as part of a change to be addressed by the Rules Committee on Wednesday morning.
After a meeting starting at 10 p.m., members of the SALT Caucus left Johnson’s office, awaiting updated estimates from the Congressional Budget Office and the Joint Committee on Taxation.
An added layer of complexity for Johnson comes from conservative fiscal hawks, who threaten to oppose any increase in the SALT cap unless it is entirely offset by budget cuts elsewhere.
“The speaker is trying hard to get us to agree,” Garbarino said. “There’s a lot of pressure coming from both sides.”
According to sources familiar with the negotiations, one idea being discussed is to raise the deduction cap temporarily above the suggested $30,000 and subsequently lower it once that temporary period concludes.
This approach aims to satisfy conservative spending hawks focused on reducing overall costs while giving SALT Caucus members a political win, albeit a temporary one.
It’s still uncertain what the proposed cap and timeline will look like, how genuine leadership is about these ideas, or if the SALT Caucus will agree to the new framework.
Discussions are set to continue on Tuesday as GOP leaders try to finalize an agreement on Trump’s domestic agenda. Trump is also expected to engage in these conversations, visiting the Capitol to rally House Republicans and encourage collaboration on the bill.
Following the meeting on Monday, Johnson didn’t divulge specifics about his leadership proposals but maintained that they are on track to pass legislation before an upcoming anniversary.
“We’re making a lot of progress,” Johnson remarked.
The SALT debate is increasingly becoming a major sticking point in advancing the GOP’s ambitious legislative plans. Moderate Republicans from high-tax states are advocating for a higher deduction cap, while hard-lined conservatives insist that any increases must be fully accounted for in the budget.
The initial leadership proposal featured a $30,000 deduction cap for individuals earning under $400,000, a figure that faced opposition from key players. In contrast, the SALT Caucus proposed a cap of $62,000 for single filers and $124,000 for joint filers.
