House Ways and Means Chair Jason Smith (R-Mo.) has stated that there is only about $50 billion available to increase the state-and-local-tax (SALT) deduction, which is sought by blue-state Republicans. This is despite a proposed tripling of the $10,000 SALT deduction to $30,000, as outlined in legislation advanced out of Ways and Means earlier Wednesday. However, five New York, New Jersey, and California Republicans have criticized the plan as insufficient and threatened to withhold their support from the GOP’s sweeping domestic policy bill without further enhancements. Smith told a small group of reporters he would do whatever is necessary to deliver on this tax bill, while warning there was limited fiscal space for a SALT deal given his panel’s many other priorities.
House Speaker Mike Johnson, who is facing internal pressure on multiple fronts, can only afford to lose three Republican lawmakers on the expected party-line vote. As committees wrap up their work on the bill, GOP leaders have scheduled a briefing at 2:30 p.m. Thursday for members to ask questions and air problems before it heads for votes in the Budget Committee on Friday and in the Rules Committee next week. Three Republicans were granted anonymity to confirm the yet-to-be announced meeting plans. It could be difficult for Johnson to placate the SALT members with only $50 billion of negotiating room, which would likely allow for only a modest boost to the current proposal. Johnson will be hard-pressed in particular to sway New York Republicans like Nick LaLota, who have pushed to increase the SALT cap to as high as $62,000 for individuals and $124,000 for married couples.
Johnson indicated Wednesday morning that negotiations over the deduction might run into the weekend after talks with the so-called SALT Republicans sputtered. The soured talks led to New York Reps. Mike Lawler and LaLota hurling criticism at Smith over the past couple days. They have asserted Smith is refusing to negotiate, while Smith has maintained that it’s up to Johnson to cut a deal with the blue-state Republicans. Johnson said ‘more discussion’ is expected and that he’s ‘very optimistic’ about clinching a deal. ‘It may take me the weekend,’ he said. Asked about the $50 billion, he said in later comments to reporters that ‘I think we’ll have enough to work out the whole equation.’