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A key New York Republican said he’s pleased with a tax provision in the Senate’s version of President Donald Trump’s “big, beautiful bill” after weeks of tense back-and-forth over the matter.
“I think it’s a very good deal. We were able to keep the House language intact,” Rep. Mike Lawler, R-N.Y., told Fox News Digital, adding that he was pleased “we were able to solve” differences on tax deductions for certain pass-through businesses, which are companies smaller than corporations whose taxes are “passed through” the business owner’s personal returns.
“I think at the end of the day, it’s a [four-times] increase on [state and local tax (SALT) deduction caps]. And despite the Senate’s best efforts to whittle down the language, we were able to keep it.”
Lawler is one of several blue state Republicans who threatened to sink the bill if it did not sufficiently raise SALT deduction caps.
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SALT deductions are aimed at providing relief for people living in high-cost-of-living areas, primarily in big cities and their suburbs.
There was no limit on SALT deductions until Trump’s 2017 Tax Cuts and Jobs Act (TCJA), which capped that federal tax benefit at $10,000 for both single filers and married couples.
The House’s bill raised that cap to $40,000 for 10 years, with households making up to $500,000 eligible for the full deduction.
Senate Republicans, who released their text of the bill just before midnight on Friday night, reduced the benefit window to five years instead of 10.
After that, the maximum deduction would revert to $10,000 for the next five years.
“Yes, the time was shortened, but at the end of the day, people are going to immediately be able to deduct them to $40,000, which is a massive win,” Lawler told Fox News Digital.
“Democrats promised to fix this when they had complete control in ’21 and ’22 and failed to deliver. We’re delivering on it. So you know to me this is a big win for New York. It’s a big win for taxpayers all across the country.”
Blue state Republicans, primarily those in New York and California, have pushed hard in favor of lifting that cap. They’ve painted it as an existential political issue in their districts, where Republican victories were critical to the GOP winning and keeping its House majority.
They’ve also argued that their states sending more money back to the federal government effectively subsidizes lower-tax states that do not bring in as much revenue.
But Republicans in more GOP-leaning states have dismissed SALT deductions as a reward for high-tax Democratic states to continue their own policies.
“SALT deductions allow blue states to export their political mistakes (electing high-tax, crazy socialists), Americans shouldn’t subsidize,” Rep. Chip Roy, R-Texas, wrote on X.
Lawler would not say if his support for the deal meant he would vote for the final bill – noting there were other provisions he had to read through in the 940-page legislation.
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But he said he believed most of his Republican colleagues in the SALT Caucus would be supportive of the compromise.
“I think there’s broad consensus among most of us about how important this is, and what a significant win it is,” Lawler said.
Rep. Nicole Malliotakis, R-N.Y., the only member of the SALT Caucus who sits on the tax-writing House Ways & Means Committee, told Fox News Digital of the deal on Friday, “I can live with this but, quite frankly, the $30,000 over 10 years that I negotiated out of Ways & Means would’ve protected my constituents for a longer period of time.”
“But alas, this is a group exercise and there are a lot of cooks in the kitchen,” she said.
Not everyone is on board, however. Rep. Nick LaLota, R-N.Y., signaled to Fox News Digital that he is rejecting the deal.
“While I support the president’s broader agenda, it would be hypocritical for me to back the same unfair $10k SALT cap I’ve spent years criticizing. A permanent $40k deduction cap with income thresholds of $225k for single filers and $450k for joint filers would earn my vote,” he said in a written statement.
Rep. Young Kim, R-Calif., did not comment on the SALT deal itself but more broadly said her support for the bill is contingent on how decisions on SALT deduction caps, Medicaid measures, and small business taxes play out.
A source familiar with her thinking told Fox News Digital she would vote against the bill back in the House if the Senate’s more severe Medicaid cuts remained in place.
The Senate is aiming to begin considering the legislation on the floor late afternoon on Saturday, though the final vote could come in the early hours of Sunday, if not later.
The bill could also change between now and then, with various Republican lawmakers still expressing their concern.
Fox News Digital reached out to SALT Caucus co-chair Andrew Garbarino, R-N.Y., and Rep. Tom Kean, R-N.J. for comment.
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