House GOP leaders are currently engaged in discussions aimed at salvaging their party-line megabill by addressing one of its most contentious provisions—the state-and-local tax (SALT) deduction cap. The proposal under consideration involves setting a $40,000 cap on the deduction for individuals and $80,000 for joint filers, a figure that has been suggested as a likely compromise with holdout Republicans who have been pushing for higher limits. This compromise comes as the House GOP scrambles to secure enough support to pass the megabill, which is filled with President Donald Trump’s domestic policy priorities.
Among the key issues that are being negotiated is the SALT cap, which has been a significant point of contention. Ultraconservative Republicans have been pushing for a cap increase to hit $62,000 for individuals and double for joint filers. However, the proposed $40,000/$80,000 cap is considered a potential final compromise by GOP leaders. The challenge for the leadership is to secure the support of these holdouts while also managing the financial implications of the changes. One of the proposed ways to offset the cost of increasing the SALT cap is to move up the start date for Medicaid work requirements to 2029, which is in line with the White House’s plan.
Leaders have also discussed other measures to address the financial aspects of the bill, including the scaling back of the Inflation Reduction Act’s tax credits. However, they have warned that rapidly moving up the phase-out of these tax credits may not have enough support to pass. The discussions are expected to continue through the weekend as the bill faces potential collapse following a failed House Budget Committee vote on Friday. The ongoing negotiations highlight the political and financial difficulties facing the GOP as they attempt to pass their legislative agenda.
The failure to pass the megabill without a compromise could have significant consequences for the party and the broader political landscape. With a potential legislative stalemate looming, the GOP is under pressure to find a middle ground that satisfies both its conservative base and the need for legislative action. The outcome of these discussions will be closely watched by analysts and political observers, who will be monitoring the impact of these decisions on the party’s agenda and the overall political environment.