Speaker Mike Johnson (R-La.) said he expects to have a deal on the state and local tax (SALT) deduction cap on Wednesday, after both sides of the tenuous negotiations reported progress following a Tuesday afternoon meeting.
Johnson said the group was waiting on the Joint Committee on Taxation (JCT), the scorekeeper for Congress, to do more “number crunching” before landing on a number for the deduction cap.
“It will probably be tomorrow only because we need the joint tax people, the number crunchers, to do all of that work tonight, and we’ve asked them to do a lot,” Johnson told reporters. “We’re looking at different facts and figures, so I suspect the final analysis will be tomorrow.”
The positive outlook came after Johnson, moderate Republicans from high-tax blue states and JCT staff huddled in the Speaker’s office to discuss the SALT deduction cap, which is one of the largest — and most complicated — sticking points hampering progress on the GOP’s bill full of President Trump’s legislative priorities.
The House Ways and Means Committee, which has jurisdiction over taxes, included a $30,000 SALT cap for individuals making less than $400,000 in their portion of the mega bill — triple the current $10,000 deduction cap — but moderate Republicans from New York, New Jersey and California say that number is not high enough. Hardline Republicans, meanwhile, are pushing against increasing the deduction cap because of the ballooning deficit.
Members of the SALT Caucus floated a $62,000 cap for single filers and $124,000 cap for joint filers on Monday — a sign of the massive gulf between the two sides. The House Ways and Means Committee was debating the bill as the gathering took place.
Despite those differences, members of the SALT Caucus expressed optimism after Tuesday’s meeting.
“Constructive dialogue, more good faith in that room than there was in previous rooms, still a lot of work to do but we actually got into some specific numbers,” said Rep. Nick LaLota (R-N.Y.). “We did talk about some variable, different than what’s in the Ways and Means bill right now, but it’s still far from what we would accept.”
LaLota noted that the JCT found that the tax portion of the Trump agenda bill would add $3.7 trillion to the debt, which is lower than the $4.5 trillion maximum the panel had to work with. With those extra hundreds of billions of dollars, LaLota said the SALT deduction cap could be brought to a number palatable to the group.
“We were pleased to see the reporting on the current Ways and Means bill, and they have a couple hundred billion dollars in room for the bill to still pass and still be within the budget resolution constraints,” LaLota said. “We think that should help sure the SALT issue.”
He would not say what numbers the group asked the JCT to crunch. House Ways and Means Committee Chair Jason Smith (R-Mo.) earlier in the day said the JCT report on the deficit impact of the tax portion offered “a little bit of wiggle room there to try and deliver additional priorities, but it’s very small wiggle room within that instruction.”
“We had a productive conversation with the Speaker and we are waiting on more numbers and information and we’ll have more of a conversation,” echoed Rep. Mike Lawler (R-N.Y.), another SALT Caucus member. “We will have more dialogue at some point soon and see where it goes.”
Despite the optimistic readouts, there was some drama during the meeting. Rep. Nicole Malliotakis (R-N.Y.), a member of the SALT Caucus and Ways and Means Committee, was kicked out of the gathering, two sources told The Hill.
Malliotakis has pushed to increase the SALT deduction cap, but she notably broke with the rest of the Caucus members when she said she would support the $30,000 cap in the Ways and Means Committee’s text, which other lawmakers outwardly rejected.
One of the sources said Malliotakis was not invited to the meeting but walked in and said she was in attendance on behalf of Smith. Members then asked her to leave, saying she had been against the group and that they didn’t need her there.
In a statement, Malliotakis pointed to her membership in the SALT Caucus and on the House Ways and Means Committee.
“As the only SALT Caucus member on Ways and Means, all I know is they can sit and negotiate with themselves all they want but there will be no changes unless I and the committee agree,” she said.