House Republicans who ran on hiking the SALT cap are poised to come out in politically good shape as negotiations with the Senate appear unlikely to result in considerable changes to the cap agreed to in the House.

The so-called “SALT caucus” pushed hard to quadruple the $10,000 cap on state and local tax deductions, a cap that was initially imposed by Republicans in 2017. Senate Republicans wanted to negotiate down that cap in the One Big Beautiful Bill Act, but it doesn’t appear that the Senate will be able to lower the cap from the $40,000 level set in the version of the bill passed by the House.

Recommended Stories

• Artificial intelligence may replace jobs soon, Fed Chairman Jerome Powell warns
• New York lawmaker cites ‘encouraging’ response to push for four-day workweek
• Powell dismisses July rate cut, heightening tension with Fed board and Trump

“I really doubt it will be adjusted much if they want this bill to become law,” Rep. Nicole Malliotakis (R-NY) told the Washington Examiner on Tuesday. “The reality is, we had a good-faith negotiation. It was a lot of thought and deliberation that came to this number. This is what garnered 218 votes.”

At the heart of the matter is the wire-thin Republican majority in the House. House Speaker Mike Johnson (R-LA) cannot afford to lose any votes and the bloc of SALT Republicans has shown they are willing to dig their heels in and withhold votes for the entirety of the bill unless they get a major increase to the SALT cap.

However, unlike the House, where there are vocal SALT caucus members, essentially Republicans in high-tax states, there are no analogous lawmakers in the Senate. Most in the Senate GOP conference would not want to see the cap raised at all, or would want to see it lowered. They argue that SALT deductions primarily benefit high income earners in blue states, and subsidize spending by state and local governments led by Democrats.

Sen. Markwayne Mullin (R-OK) has been acting as a key negotiator with the House SALT caucus. He told the Washington Examiner that it appears that the SALT cap will remain at $40,000, but with a lower income threshold.

That could be seen as a big win for SALT Republicans, who could go back to constituents and tout that, even in the face of pressure from Senate Republicans, they were able to hold the line on quadrupling the cap.

Still, how much political capital that argument has will come down to just how much the income threshold is lowered. The House version of the bill phases down the cap for incomes above $500,000. If the threshold is significantly lowered, raising the cap to $40,000 would be less meaningful because fewer families would be able to benefit from it.

Rep. Mike Lawler (R-NY) has been one of the firmest on not veering from the House’s SALT agreement. He told reporters on Tuesday he wasn’t looking to budge on the matter.

“The bottom line here is the deal that we negotiated in the House, with the House leadership, with the White House — that’s the deal,” Lawler said. “So that’s what ultimately is going to be in the final passage.”

“If the deal changes and it’s not what we supported, I’ll be a ‘no,’” Lawler added.

One reason the Senate might also be trying to dial back SALT is that it wants more wiggle room to make key business tax cuts, the most pro-growth tax provisions, permanent.

The Senate legislation, if passed as written, would permanently allow companies to immediately deduct domestic research and development costs. It would also permanently allow full expensing for new capital investments, such as factory machinery, and would restore interest deductibility to help finance investments.

The business provisions are a key priority for lawmakers because they can boost economic output, which in turn would bring in more revenues to the Treasury, offsetting the fiscal cost of other tax cuts.

The Senate has been working to push the SALT cap down since it received the legislation from the House. The Senate Finance Committee even kept the SALT cap at $10,000 in its version of the legislation as a placeholder for negotiations.

SENATE ‘BYRD BATH’ FURTHER COMPLICATES CONSERVATIVE SUPPORT FOR TAX BILL

But if the Senate was hoping to meet in the middle, it appears those aspirations have been dashed. Lawler, Rep. Nick LaLota (R-NY), Malliotakis, and others are poised to keep their heels dug in on the $40,000 level.

Treasury Secretary Scott Bessent, who was on Capitol Hill on Tuesday, predicted a SALT agreement in the next 24 to 48 hours.

David Sivak contributed to this report.