The tax portion of House Republicans’ “one big beautiful bill” is estimated to cost just under $4 trillion, roughly half a trillion under the Ways and Means Committee’s instruction for the package.
Tax writers may use the additional budget room to pay for other priorities that could still be added to the bill, like a more generous federal deduction for state and local taxes, or SALT, that blue-state Republicans are demanding in exchange for their support.
“There’s a little bit of wiggle room there to try to deliver additional priorities, but it’s very small wiggle room within that instruction,” said House Ways and Means Chairman Jason Smith, Missouri Republican. “But we’ll get it done.
Mr. Smith’s comments came at a brief press conference ahead of his panel’s markup of the tax bill that began Tuesday afternoon and is expected to stretch late into the night or the next day.
The committee’s product has won praise from Republicans because it makes President Trump’s first-term tax cuts permanent and delivers on his second-term pledges of no tax on tips and overtime income and provides breaks for seniors on Social Security.
But some Republicans remain opposed to the bill, including a handful of blue-state Republicans who want a more generous SALT deduction than the committee proposed.
The Ways and Means bill would triple the current $10,000 cap on the SALT deduction to $30,000 for most taxpayers, with reductions in the amount for anyone earning above $400,000.
A contingent of New York and California Republicans has said that’s not high enough to provide relief for their constituents who have faced disproportionate impacts from the SALT cap.
Mr. Smith said House Speaker Mike Johnson is leading negotiations with Republicans demanding a higher cap, among other issues different GOP factions have raised with the broader package as pieces have been unveiled and advanced in committees.
“There is going to be bumps along the road throughout this process, but we’re going to get it done and we’re going to get agreement,” Mr. Smith said.
The bill delivers on most of Mr. Trump’s tax priorities, but not his request to change the tax treatment of carried interest paid to partners in investment funds. Nor does the bill raise the top tax rate on the highest earners, an idea the president waffled over.
Mr. Smith said he met with Mr. Trump on Friday and walked him through the details of the tax bill, line by line.
“He was very happy with what we’re delivering because it’s delivering for working families, small businesses and farmers,” he said. “That is what this bill is all about.”
