A tentative deal to quadruple the existing $10,000 cap on the federal deduction for state and local taxes, or SALT, is irritating conservatives who are seeking steeper spending cuts in Republicans’ “big, beautiful bill.”
The SALT deal brokered between GOP leaders and blue-state Republicans who wanted to lift the cap comes as House Republicans are trying to wrangle enough votes to pass the massive budget reconciliation package carrying President Trump’s agenda.
The proposal calls for raising the SALT cap to $40,000 for taxpayers earning up to $500,000 a year with gradual annual 1% increases to both figures.
The agreement is tentative until GOP leaders finalize other aspects of the bill.
Fiscal hawks are upset that GOP leaders would agree to raise the SALT cap without offsetting spending cuts.
“Writing a deficit-backed blank check (SALT) is easier than cutting spending (DOGE, Green New Scam, Post-COVID spending),” Rep Chip Roy, Texas Republican, said on X. “Congress/swamp will always choose the easy route but we can’t afford it.”
Mr. Roy and other members of the House Freedom Caucus are opposed to the budget reconciliation package because they do not believe it goes far enough to reduce federal spending on Medicaid for able-bodied adults or act fast enough to repeal clean energy tax credits.
House Freedom Caucus Chairman Andy Harris, Maryland Republican, said the SALT deal moves the bill in the wrong direction as GOP leaders promised the measure would be deficit-neutral after factoring in economic growth.
“We need to move the amount of cuts up because, goodness knows, we moved the amount of spending yesterday with the SALT agreement,” he said.
The SALT deal is estimated to cost around $350 billion over 10 years.
“Imagine if Congress chose inspirational policy to lead America rather than buying a handful of seats with $350 billion in parochial tax subsidies in the form of SALT — while giving 7 times MORE money to the able-bodied than vulnerable Americans on Medicaid wait-lists,” Mr. Roy said in another X post.
Blue-state Republicans who negotiated for the higher SALT cap are defending the agreement against the conservative backlash.
“In high tax states and districts, the reality is the cost of living is extremely high and the cap unfairly hurts the middle class and working class,” Rep. Mike Lawler, New York Republican on X. “This is not about the rich, but those families that need critical tax relief.”
Mr. Lawler was responding to a quote from Rep. Keith Self, Texas Republican, posted by a Fox News reporter.
“It’s very dangerous because it’s throwing money to get votes in the Republican conference,” Mr. Self said, noting Republicans should be cutting taxes and spending to put more money in taxpayers’ pockets.
The SALT proposal “does not do it except for the wealthy donors in the three or four big states,” he said, referring to California, New York and New Jersey. “It’s just a fact that people making over $200,000 a year are the primary beneficiaries of SALT.”
House Speaker Mike Johnson, citing his three-vote cushion, said he is meeting with various Republicans on their concerns and trying “to meet the equilibrium point” on the budget reconciliation package.
“Sometimes it goes slower than most of us want, but that’s how the founders designed this,” he said.
The speaker would not say whether a Wednesday night vote, as he originally targeted, is off the table, but said he is still aiming to pass the bill this week.
“We’ve been saying this for many months that we would do it before Memorial Day, and I intend to hold the schedule,” he said.
Pro-SALT Republicans were not only feuding with conservatives in their party but with Democrats who said they accepted a weak deal.
Senate Minority Leader Charles E. Schumer, New York Democrat, accused his home state Republicans of bowing to Mr. Trump’s change in position on fully getting rid of the SALT cap.
“Are they going to continue to stand up, are they going to show some spine, or are they just going to wither in the face of what Donald Trump said and desert millions of their constituents?” he said.
Rep. Nick LaLota, New York Republican, dismissed the criticism, noting Democrats did nothing to lift the $10,000 SALT cap in 2021 or 2022 when they had majorities in both chambers of Congress and President Biden in the White House.
“Now, DC is poised to quadruple it. Go cook a ‘cheese burger’ and focus on your AOC primary,” he said, referring to a potential 2028 challenge from New York Democratic Rep. Alexandria Ocasio-Cortez and a viral video in which Mr. Schumer was criticized for putting cheese on a raw hamburger patty while grilling.
• Kerry Picket contributed to this report.
