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Blue state House Republicans sounded the alarm Monday following reports that a hard-fought increase to the state and local tax (SALT) deduction cap would be nixed by Senate GOP taxwriters in President Donald Trump’s mammoth agenda bill.
“Consider this the response to the Senate’s ‘negotiating mark’: DEAD ON ARRIVAL,” Rep. Mike Lawler, R-N.Y., posted on X.
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The Senate Finance Committee, which has jurisdiction over taxes, healthcare and a litany of other divisive policy areas in President Donald Trump’s “big, beautiful bill,” is expected to release its offering of the mammoth bill later on Tuesday.
Senate Republicans have not shown much interest in heeding the needs of the cohort of blue state Republicans, given that no member of the Senate GOP represents a blue state. Of the tweaks and changes coming in the Senate’s rewrite of the tax package, SALT is among the top of the list.
SALT deductions were initially capped at $10,000 for married and single filers in Trump’s 2017 Tax Cuts and Jobs Act (TCJA), and GOP lawmakers in front-line districts have made it their mission to raise that cap in the current tax talks.
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Conservatives wanted it to remain in place to help pay for the president’s first-term tax cuts, but the issue has since become a rallying cry for House Republicans in New York and California, demanding relief for their constituents in areas with high state and local taxes, such as big cities and their surrounding suburbs.
They say that the current cap in the House GOP’s bill is non-negotiable, and it only takes three “no” votes in the House to kill any bill — Rep. Thomas Massie, R-Ky., is already a hard “no” against the broader bill.
But the Senate Finance Committee is still working out the kinks of its bill, and the lowered SALT cap is not set in stone.
A source familiar with the ongoing negotiations told Fox News Digital that the $10,000 cap was just a placeholder as talks continue ahead of the release of the full bill. The source added that “folks getting outraged are jumping the gun and know it’s still in negotiation.”
Rep. Nicole Malliotakis, R-N.Y., who represents part of New York City and is a member of the House’s taxwriting panel, the Ways and Means Committee, objected to the Senate’s possible placeholder reversal.
“The $40,000 SALT deduction was carefully negotiated along with other tax provisions by the House of Representatives, and we all had to give a little to obtain the votes to pass the Big Beautiful Bill. For the Senate to leave the SALT deduction capped at $10,000 is not only insulting but a slap in the face to the Republican districts that delivered our majority and trifecta,” Malliotakis told Fox News Digital.
“If we want to be the big tent party, we need to recognize that we have members representing blue states with high taxes that are subsidizing many red districts across the country with constituents who benefit from refundable tax credits despite paying zero in taxes.”
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Increasing the SALT cap was a major line in the sand for House Republicans from New York, New Jersey and California, who vowed to vote against the package unless the deduction was increased and warned that if a solution wasn’t found, the GOP could lose the House.
Last-minute negotiations leading up to the House vote last month raised the cap to $40,000 for both single and married filers making up to $500,000 per year.
The deduction would drop for people making over the $500,000-mark to a minimum deduction of $10,000. Both the cap and income ceiling would increase annually by 1% from 2026 to 2033.
Indeed, their support helped to squeak the massive bill through the House, which advanced by a one-vote margin. Now Senate Republicans are sprinting to finish their molding of the bill in an attempt to get the entire package back through the lower chamber and onto Trump’s desk by July 4.
SALT Caucus co-chairs Reps. Young Kim, R-Calif., and Andrew Garbarino, R-N.Y., told Fox News Digital that the cap negotiated “in good faith with the speaker and the White House must remain in the final bill.”
“It not only upholds President Trump’s commitment to raise the SALT cap, but has been praised by middle-class families, firefighters, law enforcement, small business owners, and hardworking Americans across the country,” they said in a joint statement. “Instead of undermining the deal already in place and putting the entire bill at risk, the Senate should work with us to keep our promise of historic tax relief and deliver on our Republican agenda.”
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