Republicans Push Back Against SALT Cap Reductions in New Senate Bill
There’s a growing concern among Republican representatives from blue states regarding proposed changes to the state and local tax (SALT) deduction cap. Recently, some GOP members have voiced strong opposition to rumored plans in the Senate to reduce the SALT cap from a previously negotiated $40,000 back down to the current $10,000 level.
In anticipation of the Senate Finance Committee unveiling its revisions to an important legislative package, reports indicated their intention to adjust the SALT figures as negotiations proceed. Although the formal document is expected to be released soon, several New York Republican representatives have already marked a proposed reduction as a dealbreaker.
“I’ve made my stance clear from the start: raising the SALT cap to ensure fair tax treatment for New Yorkers is my main priority in Congress,” stated Rep. Mike Lawler (R-NY). Lawler emphasized that after engaging in good faith discussions, reaching an agreement on the $40,000 cap was a significant accomplishment. He further stated that he would not accept anything less, warning that any reduction by the Senate could lead him to vote against the bill entirely.
Lawler reiterated his position on social media, indicating that any attempt by the Senate to alter the SALT increase would be “dead on arrival.” His comments reflect a common concern among lawmakers from high-tax states, who feel the impact of the SALT cap directly.
The legislative package has already passed the House of Representatives, but it still faces hurdles in the Senate before it can reach President Trump’s desk for signing. Notably, the Senate is comprised of members who are not directly affected by SALT issues, leading to some vocal criticism among GOP senators about incorporating this tax hike.
Senate Majority Leader John Thune (R-SD) expressed hope for a compromise, suggesting there might be a reasonable solution to satisfy differing viewpoints, but acknowledged the lack of enthusiasm for a significant SALT cap increase in the Senate.
The House also hosts the SALT Caucus, which includes Republican representatives from blue states who are conditioning their support of the legislative package on some form of SALT cap increase. Rep. Nicole Malliotakis (R-NY) weighed in, emphasizing that a cap of $10,000 would undermine the interests of those who supported Republican candidates, calling it not only insulting but a slap in the face to constituents in high-tax areas.
Both the co-chairs of the Republican SALT Caucus, Reps. Young Kim (CA) and Andrew Garbarino (NY), warned that the Senate’s rumored plans could jeopardize the entire legislative package. They firmly reiterated the necessity of maintaining the SALT agreement made with the Speaker and the White House.
Given the tight 220 to 212 majority held by House Republicans, party leadership cannot risk losing votes over this issue. They can afford only a few defections if attendance is full, making this an increasingly delicate situation.
Additionally, the One Big Beautiful Bill is facing scrutiny from fiscal conservatives, who are keen on ensuring that its implementation does not exacerbate the national deficit. Currently, estimates suggest that the bill could increase the deficit by $3 trillion over the next decade, prompting Senate Republicans to explore options for making some of the temporary tax cuts permanent.
The SALT cap itself was originally put in place in 2017 as part of the Tax Cuts and Jobs Act, aimed at offsetting costs from other provisions by limiting state and local tax deductions. Since then, it has become an ongoing concern for lawmakers representing regions with higher taxes.
As the Senate Finance Committee continues to prepare its draft, uncertainty lingers regarding the fate of the SALT cap. A spokesperson for the committee declined to confirm the specifics of the proposal, stating that accurate information will be available when the new legislative text is officially released.
In the coming days, it will be critical to see how these discussions unfold, as bipartisan cooperation will be necessary to navigate these contentious tax issues and deliver an effective fiscal strategy.
