GOP SALT Tax deal is reached….
House Speaker Mike Johnson and a group of blue-state Republicans have reached a critical but tentative deal to boost the cap on state and local tax deductions to $40,000 in the GOP megabill, according to three Republicans with direct knowledge of the private agreement.
The new deduction cap, which would be per household, will be limited to taxpayers making below $500,000. Under the tentative deal, the income cap and the deduction will grow 1 percent every year over a ten-year window. The deduction stays in place after the 10-year window and doesn’t snap back to previous levels.
President Donald Trump is expected to endorse the SALT agreement.
However, GOP hard-liners and fiscal hawks who deeply oppose a higher SALT cap boost still need to sign off on the measure. Johnson is running through the matter with other House GOP factions. And SALT caucus members Tom Kean of New Jersey and Young Kim of California, who are in the higher income districts, are also waiting to sign off.
But the tentative deal is a major step forward for House GOP leadership in advancing their marquee border, energy, defense and tax package. A small contingent of New Jersey, California and New York Republicans have threatened to block the package if it doesn’t include a significant boost to the deduction, otherwise known as SALT.
The cap on the deduction under current law is $10,000. The House Ways and Means Committee had already passed tax legislation that included a $30,000 cap with an income cap of $400,000, but the SALT Republicans lambasted the proposal as insufficient.
GOP Rep. Elise Stefanik of New York visited the White House Tuesday on the matter.
The House Rules Committee is set to open debate on the legislation at 1 a.m. Wednesday so that Republicans have a shot at putting the bill on the chamber floor on Wednesday or Thursday….
The Senate isn’t expected to approve the GOP House Trump Spending Bill, as it is written….
Speaker Mike Johnson pitched Senate Republicans on the House’s megabill plan Tuesday. Not all of them were swayed by the overture.
Multiple GOP skeptics came out of the lunch meeting saying they planned to continue pushing for further changes to the party-line domestic policy bill — the latest sign that the bill’s challenges don’t end in the House.
“Exactly what he has told the media and his conference is what he told us,” Sen. Ron Johnson (R-Wis.) told reporters after the meeting. “The fact of the matter is, though, that we’re not just solving this problem. What good is having the majority if we don’t use it to return to pre-pandemic level spending?”
Mike Johnson, according to GOP senators who attended the lunch, cautioned Senate Republicans against making a significant rewrite of the House’s plan. He characterized parts of the plan, including the $1.5 trillion in spending reductions and the inclusion of a debt hike, as key parameters that Republicans will have to live with.
The speaker, Sen. Rand Paul (R-Ky.) said, “basically said that conservatives just have to live with raising the debt ceiling $5 trillion or $4 trillion, which is an historic amount. And I’m one conservative who won’t live with that.”
The bill is expected to face a litany of changes once it gets to the Senate. There’s a group of GOP senators, including Johnson, who want much deeper spending cuts. Senate Majority Leader John Thune said Tuesday “a lot of the issue in the Senate will be … does it have sufficient spending reforms.”…
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“I’m concerned with what they’ve got in the bill currently,” Sen. Josh Hawley (R-Mo.) said about the House-proposed changes.
Johnson told Senate Republicans Trump was “emphatic” in the meeting to not cut Medicaid benefits. (Trump himself put it in coarser terms, saying Republicans should not “fuck around with Medicaid.”)
But many Senate Republicans said it was unrealistic to expect that the bill would remain unchanged after coming across the Rotunda: “I think most House members understand that when it comes to the Senate we’re going to make changes…
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