Ahead of the Senate Finance Committee’s release of its reworking of the House’s “big, beautiful” budget reconciliation bill, one Republican House member reacted angrily to rumors of a major tax-deduction increase being stripped from the bill. His opposition could ultimately sink the bill.
Punchbowl News’ Jake Sherman previewed the Senate Finance Committee’s release of draft text for its version of the big, beautiful bill—the main legislative vehicle for President Donald Trump’s campaign promises.
“SENATE FINANCE puts $10K SALT cap in their bill. They see it as negotiating mark,” he wrote ahead of the text’s official release.
A state and local tax (SALT) deduction allows residents in high-tax states to deduct their state and local taxes on their federal tax returns. This is a major priority for Republican lawmakers from high-tax states such as New York.
Under Trump’s first-term 2017 tax cuts—which are set to expire at the end of the year—taxpayers currently can deduct up to $10,000 on their returns under SALT.
Speaker of the House Mike Johnson, R-La., successfully won over a number of holdout Republican SALT advocates from blue states to vote for the bill in the House by offering a quadrupling to $40,000 of the cap on SALT deductions for households that earn under $500,000 a year.
This last-minute concession ensured the bill’s passage through the House of Representatives in May.
Shortly after Sherman’s report of the drop in the SALT cap, Rep. Mike Lawler, R-N.Y., reacted with ire.
“Consider this the response to the Senate’s ‘negotiating mark,’” he wrote on X. “DEAD ON ARRIVAL.”
The budget reconciliation bill, which would fulfill many of Trump’s campaign promises such as funding border security and extending his 2017 tax cuts, was passed by a one-vote margin of 215-214, with one “present” vote.
This means that Lawler could theoretically sink the entire bill singehandedly if he is dissatisfied with the Senate’s ultimate SALT cap.
Lawler has already warned that the $40,000 SALT cap is nonnegotiable for him and some other members.
“If the Senate changes the SALT deduction in any way, I will be a no, and I’m not going to buckle on that. And I know in speaking to my other colleagues, they will be a no as well,” he warned in a recent CNN interview.
