New York Republican moderates received a commitment from GOP leadership to work on advancing legislation to address the state and local tax deduction (SALT) after a group of those Empire State lawmakers threatened to block legislative action over the issue.
Two sources initially told The Hill that the lawmakers and leadership struck an agreement to bring up a SALT-related bill to the House floor within the next week.
But an aide to Speaker Mike Johnson (R-La.) later pushed back, saying that while there is a commitment to work with the SALT Caucus Republicans to try to advance legislation, the timeline and specifics of the bill still require buy-in from other parts of the conference.
The discrepancy between understandings of the result of lengthy meetings into the night Tuesday could cause more heartburn for any fledgling agreement on SALT.
Two sources in the room for the negotiations told The Hill that Republican moderates received a commitment from GOP leadership that the chamber will move on a SALT-related bill in the coming days.
The legislation that the sources hope will come up would be a modified version of New York GOP Rep. Mike Lawler’s SALT Marriage Penalty Elimination Act, which would increase the SALT deduction from $10,000 to $20,000 for a married couple filing a tax return jointly.
It is unclear how such a bill would come to the House floor. Two sources expected it would come up under a rule rather than a fast-track suspension process.
The development comes as the House prepares to hold a Wednesday vote on the tax bill — dubbed the Tax Relief for American Families and Workers Act — which moderates have sharply criticized for not including an increase in the SALT deduction.
On Tuesday, four moderate New York Republicans voted against a procedural rule vote on unrelated bills as a warning shot to House GOP leaders in order to protest an increase of the SALT deduction — a top priority for many blue-state Republicans — not being included. They flipped their votes to allow the procedural measure to pass as they continued to negotiate solutions late into Tuesday night.
A commitment on a separate SALT bill could make for much smoother sailing for the bipartisan tax bill that is scheduled for passage on Wednesday evening under a fast-track process that does not allow for amendments and requires two-thirds support for passage, requiring Democratic support.
But the same procedural hurdle that the New Yorkers used to protest the tax bill could complicate their path to passing the SALT bill. Procedural rule votes were once routine party-line measures that members would often vote for even when they opposed the underlying legislation, but have become methods for small groups of Republicans to block legislation in this Congress.
Many Republicans oppose increasing the SALT cap, which was set in the Trump-era Tax Cuts and Jobs Act of 2017, arguing it incentivizes Democratic-run states to set higher taxes.
One source said that by just focusing on the “marriage penalty” aspect rather than lifting the SALT cap overall, the New Yorkers hope to get “Republicans who are said to be pro-family to view this as not penalizing families.”
The tax bill would expand the child tax credit by increasing the maximum credit per child from $1,600 to $2,000 until the end of 2025, while also restoring business deductions for research development costs, interest payments and capital investments, among other provisions.
The bill advanced out of the House Ways and Means Committee earlier this month in a resounding 40-3 vote, with all Republicans voting in favor.
Moderate Republicans said Tuesday that the two options being discussed were amending the tax bill to include SALT provisions, or moving separate legislation to address their concerns.
Updated at 12:01 p.m.