


Senate Republicans are considering whether to lower the House-proposed $40,000 cap on the federal deduction for state and local taxes, known as SALT, as they work on changes to President Trump’s “big, beautiful bill.”
The move would help earn support for the massive tax and spending package from Senate Republicans, but it would risk losing votes from a handful of House Republicans when the bill heads back to the lower chamber.
“If the Senate changes the negotiated number of $40,000 — it will derail final passage of the bill,” Rep. Mike Lawler, New York Republican, warned in a social media post Wednesday.
Rep. Nick LaLota, another New York Republican, also said if the SALT cap is tweaked, there will be “no deal” on the final bill.
Their warnings did not stop Senate Finance Committee Republicans, who are working on rewriting some of the tax provisions in the House-passed bill, from discussing potential changes to the SALT deal during a Wednesday meeting with President Trump.
No final decisions were made, several senators who attended the meeting said. None of the 53 Senate Republicans represent New York or high-tax states where the current $10,000 SALT cap is a major issue.
“I would prefer not to have to subsidize blue states with high tax rates,” said Sen. John Cornyn, Texas Republican.
He said there is not much support in the Senate for raising the SALT cap to $40,000, but they understand the difficulty House Speaker Mike Johnson would have keeping his blue-state Republicans on board with the bill if the Senate makes changes.
“The speaker has pretty narrow margins, and there’s only so much that he can do to keep his coalition together,” said Sen. Todd Young, Indiana Republican. “At the same time, it won’t surprise people that the Senate would like to improve on their handiwork.”
Mr. Trump understands that no Senate Republicans want to raise the SALT cap, but raised concerns about losing House support for the bill if the provision is tweaked, according to Sen. Ron Johnson, Wisconsin Republican.
“That’s just going to be a bone of contention,” he said. “The problem we all have is such narrow margins.”
Senate Republicans cannot afford more than three defections on the bill, the same amount of cushion House Republicans have when considering any Senate changes.
“We’ll work it out,” Senate Majority Leader John Thune, South Dakota Republican, said when asked about the SALT issue.
Senate Finance Republicans discussed other issues during their meeting with Mr. Trump, including a push to make permanent the business-tax breaks passed in his first term. The House bill only temporarily renews costly tax deductions for business equipment, research and development costs and interest on loans.
Mr. Trump made a private plea for repealing the debt limit, as he posted about on social media earlier Wednesday, but seemingly accepted the pushback he received on that.
“He realized that’s not going to happen,” Mr. Johnson said. “He certainly wants [the debt limit] extended beyond the next election.”
Mr. Johnson also brought up his concerns that the bill does not do enough to cut spending, which he is looking to reduce to pre-pandemic levels.
The Wisconsin senator said he had a “spirited” discussion with Mr. Trump on that topic and reiterated his belief that Republicans will need to pass more than one budget reconciliation bill to tackle fully the federal government’s spending problem.
“I’ve never thought we could do everything we need to do in one bill, and we won’t,” Mr. Johnson said. “So that’s my whole point is, how do we force another bite at the apple?”
Mr. Trump asked Mr. Johnson to be more “positive” with his remarks about the bill, and committed to having administration officials work with the senator on his concerns.
The president also discussed his frustration with billionaire Elon Musk, the former head of his Department of Government Efficiency, who continued to attack the bill Wednesday.
“Call your Senator, Call your Congressman, Bankrupting America is NOT ok!” Mr. Musk posted on X, the social media platform he owns. “KILL the BILL.”
Mr. Musk is concerned about the bill’s deficit impact. The Congressional Budget Office projects the measure will increase the deficit by $2.4 trillion over a decade, according to its cost estimate of the final version of the House-passed bill.
CBO’s latest analysis, released on Wednesday, also projects that the GOP bill will lead to 10.9 million people losing their health insurance by 2034.
Republicans largely brushed off CBO’s projections, saying the nonpartisan cost analysis agency has been wrong in the past like when it projected revenue losses from the 2017 Trump tax cut law that did not materialize.
“CBO is making the same mistakes. They ignore economic growth,” said House Majority Leader Steve Scalise, Louisiana Republican. “What we saw in 2017 when we cut taxes is that businesses started growing. They started giving pay raises to their workers. They hired millions more people. Unemployment went virtually to zero. Inflation dropped dramatically. People had more money in their pockets because wages were up. And all of those things produced more money for the American Treasury.”
White House Office of Management and Budget Director Russ Vought said the CBO estimate does not use “a realistic current policy baseline,” which would assume there is no cost to extending tax cuts already in law.
The bill would reduce deficits by $1.4 trillion over 10 years when the current policy baseline is used, Mr. Vought said.
“It includes $1.7 trillion in mandatory savings, the most in history,” he said. “If you care about deficits and debt, this bill dramatically improves the fiscal picture.”
• Kerry Picket contributed to this report.
• Lindsey McPherson can be reached at lmcpherson@washingtontimes.com.