GOP divided on lifting the SALT cap
Rep. Mike Lawler, R-NY, joins ‘Sunday Morning Futures’ to discuss Trump’s meeting with blue state Republicans over lifting the SALT cap and congestion pricing in NYC.
President-elect Donald Trump is giving Republicans his blessing to negotiate a major tax that could be key to the Republican Party’s negotiations for a major conservative policy overhaul next year.
met Trump several different groups of House Republicans at Mar-a-Lago this weekend, including blue state Republican lawmakers who are part of the House SALT Caucus — a group that opposes the current $10,000 limit on state and local tax credit (SALT), which mainly affects residents of cities and suburbs in high income and property tax areas such as New York, New Jersey and California.
“I think it was productive and successful,” Rep. Nicole Malliotakis, R-N.Y., said of the meeting. “The President supports our efforts to increase the SALT deduction. He understands that mayors and governors in blue states are crushing taxpayers and wants to provide relief from the federal level.”
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President-elect Donald Trump told Republicans in New York that he would work with them on a number of priorities (Chip Somodevilla/Getty Images)
But Trump also indicated he was aware of opposition from others in the House GOP conference, particularly Republicans in rural districts who have seen the SALT deduction as tax breaks for the wealthy. Before the cap was imposed in 2017, there was no limit on how much state income and local property taxes people could deduct from their income when filing their federal returns.
“He gave us some homework to work on, a number that could provide our middle-class voters with relief from the high taxes that our governor and mayor have imposed, and at the same time, you know, something that can build consensus and get results to lead. (a majority of 218 votes),” Malliotakis said.
“I think we pretty much know it’s not going to be a complete removal of the SALT limit. There is no appetite within Congress, or even among American taxpayers, to cut taxes for the ultra-wealthy.
“Our efforts are really focused on middle-class families, and that’s what we’re focusing on in trying to get the right balance.”
The current SALT deduction cap has been pushed back New York and California lawmakers for much of its existence, since it was levied in Trump’s Tax Cuts and Jobs Act (TCJA).
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Representative Nicole Malliotakis told Fox News Digital that Trump would work with New York Republicans on congestion pricing (Drew Angerer/Getty Images)
Trump suggested he would change course during his second administration as early as last September, when he posted on Truth Social that he would “get SALT back, cut your taxes and much more.”
The discussions are part of Republicans’ broader conversations about pursuing a sweeping overhaul of fiscal and conservative policies through a process known as “reconciliation.”
By lowering the Senate’s threshold for moving to a simple majority instead of two-thirds, the process allows the party in control of both houses of Congress and the White House to pass certain legislation, provided that it concerns budgetary and other budgetary matters.
Some pro-SALT deduction Republicans, such as Rep. Mike Lawler, R-N.Y., had indicated they could withhold support from the final bill if the limit was not increased.
“The only red line I have is that if there is a tax bill that doesn’t eliminate the cap on SALT, I would not support that,” Lawler told Fox News’ Sunday Morning Futures.
Lawler also said Trump agreed that SALT deduction limits should be increased.
Republicans in the House of Representatives have virtually no room for error, with a razor-thin majority from Trump’s inauguration until probably sometime in April.
Rep. Mike Lawler said the SALT deduction limits were a “red line” for his support of a budget reconciliation bill (Tierney L. Cross)
Meanwhile, Trump also told Republicans in New York that he would help them in the fight against their state controversial congestion pricing rule that incurs additional costs to drive in parts of Manhattan.
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“He understands how unfair this is and the impact it would have on the city’s economy and the people we represent, which is why we are currently working with him on legal options to undo the Biden administration’s stamp of approval,” Malliotakis said. “If there is a legal option, if there is a legal option to stop congestion pricing, he will do it.”
“You have cops, law enforcement, firefighters, nurses, restaurant workers who have to come in at odd hours, and they drive because they don’t feel like public transportation is clean or safe.”
Congestion pricing went into effect in New York City earlier this month.
Fox News Digital reached out to the Trump transition team for comment on this weekend’s meeting.
