The White House is nearing a deal on the state and local tax deduction, one of the last remaining holdups over President Donald Trump’s megabill, though the Senate has not yet agreed to the “tentative” House compromise.
Republican members of the SALT Caucus have been offered a deal to raise the deduction’s cap to $40,000 for five years, as outlined in the House-passed bill. The cap would then snap back to $10,000, the limit in the Senate’s draft bill.
Rep. Nick LaLota (R-NY), a caucus member who disclosed the framework, rejected it out of hand on Friday morning, while a second source cautioned that negotiations are still in flux and had not yet been socialized in the Senate.
Sen. Markwayne Mullin (R-OK), a key SALT intermediary, left the White House Thursday night without committing to a deal.
Treasury Secretary Scott Bessent will brief Senate Republicans at their Friday lunch, offering the White House a chance to gauge support. A higher deduction is universally opposed by GOP senators, none of whom represent the blue states that typically benefit from SALT, but some compromise will be needed to get Trump’s agenda through both chambers of Congress.
Senate Majority Leader John Thune (R-SD) is preparing to hold a weekend vote on the tax bill, allowing the House to act sometime next week. Trump has pressed Republicans to get the legislation to his desk before July 4.
Mullin has held rolling conversations with SALT holdouts and recently offered a $40,000 cap, the same amount as in the House-passed megabill, but with a lower income threshold.
LaLota, Rep. Mike Lawler (R-NY), and other SALT members have balked at anything that deviates from the House bill until now, prompting the White House to get directly involved.
On Friday, LaLota told reporters he could not support the snapback offer. “That just affirms everything I’ve been against for so long,” he said.
Rep. Nicole Malliotakis (R-NY), another SALT Caucus member, predicted the eventual deal would not be able to satisfy every House Republican, but left the door open to supporting it herself.
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“I mean, look, I think they will do something that is reasonable at the end of the day, whether it’s going to satisfy every member, probably not, and at the end of the day, that’s what a negotiation is,” Malliotakis said. “It’s a give and take.”
The White House offer came together after repeated meetings at the Treasury Department on Thursday with SALT holdouts.