With the July 4 deadline set by the White House for Congress to send President Donald Trump the “One Big Beautiful Bill” quickly approaching, House Speaker Mike Johnson (R-LA) and Ways and Means Chairman Jason Smith are in a race against the clock to wrangle a three-seat Republican margin to pay for the $4 trillion extension of the president’s expiring 2017 tax cuts and another $2 trillion in new tax exemptions for overtime, tipped income, and Social Security benefits. But Republican leadership’s biggest hurdle isn’t figuring out how to pay for the OBBB — it’s how to keep blue state Republicans-in-name-onlys from blowing up the cost with their bottomless objections to the cap on the state and local tax deduction.
When the Tax Cuts and Jobs Act passed in 2017, Trump largely paid for sweeping pro-growth tax cuts for individuals and businesses by capping the state and local tax deduction, disproportionately benefiting the wealthiest residents of urban enclaves such as San Francisco and Manhattan, at $10,000. Even though the SALT deduction has proven an extraordinary political tool to deprive Democrats of their Electoral College edge, encouraging the wealthy to turn purple states red and pressuring blue state governors to rein in reckless spending, five blue state RINOs have threatened to tank the OBBB, thus subjecting the average household to an automatic $2,000 tax hike at the start of the 2026 midterm election year, unless — what, exactly?
Well, the SALT terrorists won’t actually give Johnson or Smith a number to which they wish to raise the SALT cap.
“I’ve been very clear with leadership and the administration from the very beginning — if there is not a fix for SALT, there is no bill,” said New York RINO Mike Lawler. “If nothing passes, SALT comes back unlimited, so it is on leadership to offer a number and negotiate from there. We are not negotiating against ourselves.”
Huh?
House leadership originally wanted to deliver Trump his signature legislative victory by Memorial Day. After that deadline proved unlikely, Treasury Secretary Scott Bessent publicly warned Congress that the president expects a bill on his desk by Independence Day. The reason is twofold: First, the pro-growth policies and new tax relief in the bill need time to be felt by the electorate if Republicans wish to run up their margins in the 2026 midterm elections. Second, the closer Republicans get to the New Year’s Day expiration date of the individual tax provisions that would cause an automatic tax hike for 62% of the public, the more leverage Democrats have to dilute what should be a must-pass bill for Republicans.
Evidently, the RINOs feel the same way, so instead of presenting an ideal amount to increase the SALT deduction cap, the SALT caucus, like the Democrats, wants to hold the bill hostage as long as possible. Even when Smith met with the SALT faction to get their requested number — any number — Young Kim of Orange County, California, refused, saying that it was up to Smith to offer a number.
How about this? If the SALT caucus refuses to play ball and propose an actual number, the default SALT deduction cap should be zero.
After all, fully eliminating the SALT deduction is not just morally correct (Why should working-class folks from fiscally responsible states effectively bankroll the wealthy who have chosen to live in Newport Beach or Park Slope?) but also fiscally responsible. A complete elimination of the SALT deduction would generate an estimated $2 trillion in revenue over the decade, capable of paying for much of Trump’s proposed tax exemptions for tipped income, overtime, and Social Security.
The OBBB must be deficit-neutral enough over the decade for the Senate Parliamentarian to allow the House to pass it by a simple majority, so Johnson and Smith cannot play the SALT crew’s game and leave a massive variable in the mix as they try to score the bill. After all, the options span a more than $3 trillion range.
Whereas a complete elimination of the SALT deduction would save $2 trillion over the decade, a wholesale elimination of the SALT deduction cap would cost $1.2 trillion. Raising the cap to $20,000 for single filers and $40,000 for married couples filing jointly would cost $630 billion, but raising it to twice those rates would cost nearly $1 trillion.
TRUMP HAS SLOWED THE NATIONAL DEBT GROWTH BY 92%
Without having a specific number to add to the cost column, Republican leadership cannot figure out how many couch cushions they need to shake for pennies, let alone how many trillions to strip from Medicaid, the Supplemental Nutrition Assistance Program, or any other welfare program.
If the SALT caucus wants to grow up and give Smith and Johnson their number, then proper negotiations can begin. Until then, Smith and Johnson should assume the cap will revert to the politically and fiscally correct number, zero, and start courting the red-state centrist Democrats who understand every incumbent has hell to pay if they head into an election year with the majority of Americans hit with a multi-thousand-dollar tax hike.