House Republicans had planned to use a second phase of tax cuts to force Democrats into a difficult vote ahead of mid-term elections. Now, party leaders may drop the effort, fearing it could backfire by antagonizing voters in some hotly contested Congressional districts.
The proposal would make the individual changes in last year’s overhaul permanent — including the $10,000 annual cap for state and local tax deductions, one of the law’s most disputed provisions. That would put Republican lawmakers in high-tax states like New York, New Jersey and California in the tricky position of either supporting the cap, or voting against tax cuts backed by their party.
Largely because of the SALT cap dilemma, House Republicans are hitting the pause button on “Tax Reform 2.0” legislation, according to three GOP aides who requested anonymity to speak about the matter. The lawmakers want to weigh the political benefits and risks of a vote on the bill in the coming weeks, and assess if they have enough support to pass it.
This shows the problem the Republican Party is encountering this year as it tries to take its signature policy achievement of the past two years to voters — and Democrats threaten to rob the GOP of its majority in the House.
One option for Republican leaders is to decide to just have the tax-writing Ways and Means Committee mark up the bill and hold a vote for it in the next two weeks before shelving it. Or they could move forward and hold a floor vote by the end of the month. A decision to put the bill on ice before the election would signal Republicans’ need to protect vulnerable members.
A spokesman for House Majority Leader Kevin McCarthy didn’t respond to a request for comment.
Representative Leonard Lance of New Jersey, which has the highest property taxes in the country, said in a statement that he doesn’t support a tax bill that includes the SALT provision and thinks the measure would have a better chance of passing without it.
Lance’s district includes many affluent towns west of New York City, including Bedminster, home to one of President Donald Trump’s golf clubs. It’s considered one of 57 competitive House races, according to the Cook Political report. About a third of those are in districts located in high-tax states — New York, New Jersey, California, Minnesota and Illinois — where the SALT issue has been a part of the debate.
On the Record
A vote prior to the election would put those members on the record about controversial legislation where the SALT provision, Trump or both are unpopular.
House Ways and Means Chairman Kevin Brady released a framework for the second round of tax cuts in July, and held listening sessions with members in August. In addition to making the individual changes permanent, the package of bills would make changes to retirement savings accounts and create special tax breaks for startup companies.
Brady, a Texas Republican, probably doesn’t want to strip the SALT provision from the 2.0 bill because it would open the floodgates for members to start requesting tweaks to other tax breaks that the 2017 law scaled back and which are set to expire in 2026, such as decreasing the cap on the home mortgage interest deduction.