Trump loses patience as SALT block stymies GOP tax bill

President Donald Trump is growing frustrated with demands to significantly boost the cap on the state and local tax deduction, according to a senior administration official, signaling a deadlock as Republicans aim to quickly pass a giant tax-cut bill.

Trump told lawmakers in a meeting on Tuesday not to let the SALT deduction or differences over social safety-net cuts impede the bill. But afterwards members of warring factions told reporters they were still dug in in opposing the bill unless their changes are made. 

Trump urged Republicans from New York and other high-tax states to wait to try to raise the SALT limit further until after Congress is done with the tax legislation, the official said, a proposal that is likely to draw backlash from SALT lawmakers who see the president’s “one big, beautiful bill” as their sole shot to address a political priority that dates back to 2017.

Trump is also losing patience with a faction of conservative hardliners pushing for deeper cuts to Medicaid health coverage for the poor and disabled, the official said. The president implored Republicans to stick together and pass the bill the official said, adding that Trump expects every Republican to vote for the bill on the floor.

Trump told lawmakers in a closed-door meeting on Tuesday he wants to keep the SALT deduction limit at $30,000, the level in the draft legislation. That’s three times the current $10,000 cap.

In that meeting, Trump singled out the lawmakers from New York, New Jersey and California who have rejected the $30,000 deduction limit, saying it is insufficient to win their votes.

At least two New York lawmakers, Nick LaLota and Mike Lawler, said after the meeting that they aren’t backing down and won’t support the tax package as written.

“My middle class constituents should not be shut out of this process,” LaLota said.

Several SALT advocates have said they are willing to block Trump’s bill without a bigger deduction, and are unlikely to heed the president’s advice to address the issue later. Those lawmakers believe the tax reconciliation package is their only real opportunity to secure more SALT in the foreseeable future because they have negotiating leverage to hold up Trump’s top legislative priorities.

Trump as a presidential candidate and in the White House has pledged bigger SALT deductions, a policy reversal after his first-term tax cut legislation imposed the current $10,000 cap. 

During the meeting with House Republicans, the president spoke individually with holdouts both from high-tax states and conservative hardliners, Representative Lauren Boebert of Colorado said.

But ultraconservatives said they were no more swayed by Trump’s arguments than were SALT lawmakers.

“We aren’t doing enough on Medicaid,” House Freedom Caucus Chairman Andy Harris said after the meeting. The Maryland lawmaker said he would still oppose the tax bill as written.

The current version of the legislation places new work requirements on able-bodied adults and imposes fees for health care services on more Medicaid beneficiaries.

Representative Andy Biggs, a Republican hardliner from Arizona, said he was unmoved by calls to move quickly on the bill, saying he was more focused on the final product than the timeline.

SALT Negotiations

House Speaker Mike Johnson met with SALT holdouts late Monday, but left without an agreement. 

In the meeting, the speaker offered to raise the cap on the SALT deduction from the $30,000 limit set in the legislation to $40,000 but only for four years and for people making less than $751,000, said a person familiar with the matter. After four years, the limit would snap back to $30,000 with a $400,000 income limit. 

SALT caucus members said Tuesday they do not want a temporary increase and have said they want a doubled cap to avoid a marriage penalty on joint filers.

“Any proposal that has the cap falling off a cliff is unacceptable to me,” LaLota told reporters Tuesday. “Now is the time to get it right.”

Johnson was more positive about the chances for a deal. He still plans for the House to vote on the package by the end of the week. 

“We’re going to get an agreement on everything necessary to get this over the line,” he said Tuesday. 

The bill approved last week by the House tax committee sets a $30,000 cap for individuals and couples. That draft called for phasing down the deduction for those earning $400,000 or more, a plan quickly rejected by several lawmakers who called it insultingly low. The current writeoff is capped at $10,000.

Stephen Miran, who chairs the White House Council of Economic Advisors, said he was confident Trump would be able to quickly reach a deal on SALT with House Republicans.

“The president will deliver SALT relief to American households. I don’t know exactly what the number will shake out,” Miran told Bloomberg Television on Tuesday. “The president is one of the best negotiators in history and he’s shown over a career spanning decades that he can forge hundreds of deals and I think he’ll forge another one right in front of us now.”

The holdout lawmakers — who also include New York’s Andrew Garbarino and Elise Stefanik, New Jersey’s Tom Kean and Young Kim of California — have threatened to reject any tax package that does not raise the SALT cap sufficiently.

Republicans are also squabbling over spending reductions in the bill, including weighing cuts to Medicaid health coverage and nutritional programs for low-income households.

They are trying to keep revenue losses from their tax-cut package down to a self-imposed limit of $4.5 trillion over 10 years. The current package has a $3.8-trillion revenue loss.