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House Republicans in Democrat-controlled states are firing a warning shot at the Senate as it considers President Donald Trump’s “one big, beautiful bill.”
GOP lawmakers in New York and California have been demanding that senators leave the House’s increased state and local tax (SALT) deduction cap in the bill, even as members of the upper chamber eye it as low-hanging fruit for saving taxpayer dollars.
But those blue state Republicans have made raising the current $10,000 SALT deduction cap an existential issue, arguing it provides much-needed tax relief to people in high-cost-of-living areas. The SALT deduction allows people living in areas with high state and local taxes to deduct those penalties in their federal tax filings, up to a point.
“When did taxing income that’s already been taxed become a Republican ideal? Our party has always stood for lower taxes and a fair, commonsense tax code. We worked in good faith with House leadership to secure a fair deal that provides our constituents with much-needed SALT relief,” SALT Caucus co-chairs Reps. Young Kim, R-Calif., and Andrew Garbarino, R-N.Y., said in a statement.
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“Hardworking families we represent are penalized by the SALT cap, and this deal keeps the President’s commitment to fix this issue and has the support of firefighters, police, small businesses and working Americans who keep our country moving.”
House Republicans can afford little dissent with their razor-thin majority to still pass the bill again, if the Senate returned a modified version – something the SALT caucus pointed out.
“The Senate would be remiss to forget that the path to 218 — and delivering for the American people — runs through the SALT Caucus,” the statement read.
The House-passed budget reconciliation bill – aimed at advancing Trump’s priorities on tax, energy, defense, immigration, and the national debt – raises the SALT deduction cap to $40,000.
Republicans are working on the bill as the national debt climbs past $36 trillion.
Rep. Nicole Malliotakis, R-N.Y., a SALT Caucus member and one of the House’s GOP tax-writers, sent in a statement to Fox News Digital, “The State and Local Tax (SALT) deduction negotiated in the House should NOT be altered by the Senate. It’s a Republican principle to allow taxpayers to keep more of their hard-earned money and taxpayers in New York and other SALT states deserve not to be double taxed by their government, especially when we also supported significant savings by rooting out waste, fraud & abuse in our states.”
Rep. Mike Lawler, R-N.Y., who also fought for the increased cap, signaled he would not support the bill if the Senate reinstated the lower number.
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“NY, NJ, and CA have and continue to subsidize many of the states represented in the Senate Republican conference. Furthermore, SALT has been used as a payfor for other provisions in the bill, including the doubling of the standard deduction, which is to the benefit of all Americans,” Lawler wrote on X.
“Since the last tax bill, 29 states have blown past the 10k cap. This isn’t a red vs blue issue, it’s an issue of double taxation. Since when do Republicans advocate for taxing you on top of taxes already paid? No SALT. No Deal.”
Senate Majority Leader John Thune, R-S.D., met with Trump to shore up support for the tax portion of the budget reconciliation bill, and said he recognized SALT was a key issue for blue-state Republicans in the House – but it was one that didn’t really move the needle for Republican senators.
“We also start from a position that there really isn’t a single Republican senator who cares much about the SALT issue,” Thune said. “It’s just not an issue that plays. Most of our states, we’re states that are low-tax states, and we don’t think that low-tax states ought to be subsidizing high-tax states.”
Indeed, no Senate Republican hails from a blue state, making the issue for many lawmakers in the upper chamber a moot point. And Thune’s position echoes that of many in the House GOP who were wary of increasing the SALT cap.
Still, Thune and Senate Republican leadership acknowledge that whatever tweaks and changes to the budget bill that they make have to pass muster with their colleagues in the House.
Speaker Mike Johnson, R-La., told reporters Thursday morning that he is still keeping SALT lawmakers “calm.”
The speaker added that he had been urging the Senate to keep the House’s bill intact.
“Look, the Senate Republicans are from red states, right? They feel the same way that I do about SALT, but I’m being very deliberate in reminding them that we have, again, this very delicate balance to maintain over here, and you’ve got to address the issue so that our members can take something home,” Johnson said.
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