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Next test for higher SALT cap: Republican resistance in the Senate

Published 1 week ago4 minute read

WASHINGTON — A $40,000 cap on state and local tax deductions that was negotiated by a group of New York House Republicans and passed by the House Thursday faces its next hurdle in the coming weeks — Senate Republicans who are pushing for a lower limit.

Several Senate Republicans have publicly opposed increasing the current $10,000 SALT cap as part of a massive budget bill making its way through the Republican-controlled Congress. But Long Island Reps. Andrew Garbarino (R- Bayport) and Nick LaLota (R-Amityville) say the coalition of blue-state House Republicans who helped negotiate the increase have made it clear that any changes to the SALT provisions will derail passage of the mega-bill when it comes back for a final House vote.

President Donald Trump has urged congressional Republicans to pass the sweeping package of his legislative priorities by July 4. The package calls for stricter Medicaid eligibility requirements, increased border security spending and a renewal of the 2017 Trump-backed tax plan that implemented the cap on state and local tax deductions.

Garbarino, in a phone interview, said Speaker Mike Johnson (R-La.) told the coalition of SALT-minded Republicans that he told Senate Majority Leader John Thune (R-S.D.) that the increased cap of $40,000 on state and local deductions for households earning $500,000 or less should remain untouched when the Senate begins debating and amending the bill.

Johnson "told us he’s been speaking with Thune, Thune knows how important this is, and this is one of the things that is not negotiable," said Garbarino, who along with LaLota and Reps. Mike Lawler (R-Pearl River), Elise Stefanik (R-Schyulerville), Tom Kean (R-N.J.) and Young Kim (R-Calif.), helped broker the proposed new cap.

Johnson and Thune’s offices did not return emails seeking comment, but Thune, like many Senate Republicans, has been a longtime critic of increasing the cap beyond $10,000. He has argued that the ability to write off state and local taxes when filing federal income taxes only benefits homeowners in high-tax states.

Blue-state lawmakers counter that the deductions are necessary to prevent homeowners from being double-taxed on their income. The deduction is particularly important on Long Island, where residents pay comparatively high state and local taxes.

Thune, when asked about the $40,000 cap, told reporters on Capitol Hill last Thursday: "I know the House had to make a deal, but our members want to be heard on it, and I assume we’ll have something to say."

Sen. Kevin Cramer (R-N.D.) told the news outlet The Hill that he envisions that Senate Republicans will look to cut the proposed $40,000 cap in half. But he also acknowledged that the final bill needs to be accepted in the House, where three Republican nay votes can tank a bill.

"There’s not one Republican in the United States Senate who gives a  [expletive] about SALT," Cramer told the Hill, underscoring that there are no blue-state Republicans in the chamber. "Having said that, what does matter is 218 votes in the House, and we want to be cognizant about that."

Garbarino said he, LaLota and other SALT caucus Republicans plan on lobbying Senate Republicans to keep the negotiated cap when Congress returns from the Memorial Day recess.

LaLota, when asked about Senate Republican opposition to a cap increase, said in a phone interview he and Garbarino would continue to "hold the line" and withhold support for an overall package if the $40,000 figure changes.

"While I respect the Senate’s prerogative, diluting the House’s SALT agreement will jeopardize the entire bill," LaLota said.

Lawler said in a statement to Newsday that "keeping the $40,000 SALT agreement as negotiated is imperative for final passage" of the budget bill.

"As the Senate works through their deliberations, my SALT colleagues and I will continue to work with leadership and the White House to ensure it remains intact," Lawler said.

Convincing Senate Republicans to preserve the SALT deal will be critical, as past attempts to repeal or increase the cap have died in the Senate.

Rep. Tom Suozzi (D-Glen Cove), sponsored three bills to repeal or increase the deduction from 2019 through 2021 that passed the House but died in the Senate, including when Democrats were in control of the chamber.

"It can always fall apart in the Senate," Suozzi told Newsday. "It’s not going to be easy to get it done."

Laura Figueroa Hernandez

Laura Figueroa Hernandez is the White House correspondent and previously covered New York City politics and government. She joined Newsday in 2012 after covering state and local politics for The Miami Herald.

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