Senate Republicans plan to amend SALT tax deduction in Trump's sweeping bill
WASHINGTON – Senate Republicans are likely to tweak a state and local tax deduction that was crucial to President Donald Trump's sweeping tax bill passing the House, setting up a potential showdown with the lower chamber.
It's the first significant change Senate Republicans have signaled they will make to the massive bill, which would extend 2017 income tax cuts, implement new tax cuts for tipped wages and overtime, and put more money toward border security spending.
"Obviously, the House has different equities when it comes to that issue. But we'll work it out," Senate Majority Leader John Thune told reporters after a June 4 meeting at the White House. "We obviously realize that anything we do also has to pass the House of Representatives, it's got be something that the president is willing to sign into law."
At issue is a state and local tax deduction, known as SALT, which benefits the constituents of several Republicans who represent districts in largely Democratic states, such as New York, California, and New Jersey. Those lawmakers pushed for the cap to be raised from $10,000 to $40,000 for people earning less than $500,000 per year in exchange for their support for the GOP legislation.
Both the Senate and Trump understand that the final bill must be able to get through the House's three-vote margin, Thune said.
"But we also start from a position that there really isn't a single Republican senator who cares much about the SALT issue. It's just not an issue that plays," the South Dakota Republican said.
Unlike in the House, there are no Republican senators who represent high-tax states that could benefit from the deduction. Adding a cap to the deduction, which Republicans approved during Trump's first presidency, Thune said, "was one of the best reforms that we had in the bill."
"So we will work with our House counterparts, and with the White House, to try to get that issue in a place where we can deliver the votes and get the bill across the finish line," he added.
The comments come as the Senate begins reworking the legislation to fit through their small majority. The bill must receive at least 50 votes in the chamber, which Republicans control 53 to 47.
Trump has met with Thune and other senators this week, including Wisconsin Sen. Ron Johnson and members of the Senate Finance Committee, as his administration works toward a July 4 goal of getting the legislation to his desk.
Several Republican senators have already raised concerns with the cost of the package, which is estimated to add around $2.4 trillion to the federal deficit over the next 10 years, according to the latest nonpartisan estimates. Reducing the SALT cap would save some money and reduce the size of the bill.
The price tag has also drawn the ire of former Trump adviser Elon Musk, who called the bill an "abomination" and said the bill should be killed.
Trump's administration insisted after the social media posts that an estimate put out by the nonpartisan Congressional Budget Office was not accurate. A senior official said on June 4 that the White House's modeling showed the bill, plus other cost-cutting measures the administration is pursuing, saving $1.6 trillion over time.
The Senate is expected to make some changes to the legislative bill before working with the House to reconcile the differences between the two versions, or forcing the lower chamber to vote on the bill as the Senate has written it, potentially causing a dust-up with those blue-state Republicans in the process.
Multiple House Republicans have already said they would vote against the bill if the Senate changes their agreed-upon deal to raise the SALT cap. Changing the deal "would be like digging up safely buried radioactive waste – reckless, destabilizing and sure to contaminate everything around it," Rep. Nick Lalota, R-New York, told reporters on June 4.
