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One of the biggest conflicts between House and Senate Republicans in the tax cuts for the rich bill is the SALT (State And Local Tax) deduction. The SALT deduction level is vital to the bill for moderate House Republicans in northern blue states. A decrease in the deduction is a tax increase for residents that face high local and state tax burdens.
The tax cuts bill barely passed the House after Speaker Mike Johnson had to negotiate with moderate Republican members to get their agreement on a SALT deduction limit of $40,000.
When Senate Republicans started making noise about wanting to lower the deduction, Speaker Johnson warned them not to do it, and the moderate Republicans said that if the deduction is lowered they will kill the final bill.
Senate Republicans have lowered the deduction to $10,000.
Jake Sherman of Punchbowl News posted on X:
SENATE FINANCE puts $10K SALT cap in their bill. They see it as negotiating mark.
Rep. Mike Lawler (R-NY), one of the SALT caucus Republicans, responded to Sherman:
Consider this the response to the Senateās ānegotiating markā: DEAD ON ARRIVAL.
A group of House Republicans might blow up the tax cuts for the rich bill, and they are heading for a showdown with the Senate.
Senate Republicans are taking this step, because for them SALT is not an issue. The vast majority of Senate Republicans come from rural states, smaller states, or non-northeastern states.
If Senate Republicans send this bill back to the House, it would not be surprising to see it rejected, and the two sides end up in conference and having to negotiate a final bill with each other.
The moderate House Republicans know that if they hold out, they can get a better deal by working with Democrats on legislation before the end of the year. The pressure is on Johnson and Thune because the debt limit expires near the end of summer, and the Trump tax cuts expire at the end of the year.
Trump originally wanted to sign this bill by the 4th of July, but the whole thing is much closer to collapsing than ever becoming law.
What do you think about Republicans coming unglued? Share your thoughts in the comments below.
