President Donald Trump expressed optimism that lawmakers could reach a compromise on the state and local tax deduction — a sticking point in his “One Big Beautiful Bill” — even as a key SALT advocate insisted a deal had already been reached.
Trump said Wednesday that resolving the contentious debate over the SALT cap is imperative to passing his multitrillion dollar tax bill.
“It’s very difficult, and I understand both sides, but we’ll just have to see, hopefully a compromise or something’s going to be made,” Trump told reporters at the White House.
New York Representative Mike Lawler — one of the House’s most vocal supporters of the SALT deduction — said Wednesday he is open to negotiating with the Senate to advance the tax bill, but insisted he would not agree to lower the $40,000 SALT cap deal reached in the House.
“We’re not going to fold here,” Lawler said on Bloomberg Television. “We’re still talking to senators, we’re going to have a conversation today.”
Lawler said he’s also speaking with Speaker Mike Johnson.
The SALT deduction has been a primary sticking point holding up Trump’s legislative agenda. Lawler, one of a handful of Republicans representing districts in high tax states, previously called the Senate version of the tax bill “dead on arrival” because of its $10,000 cap on SALT.
Senate leaders have characterized that figure as a placeholder while negotiations are ongoing, but have also said there is no desire among Republicans in their chamber to keep the cap at $40,000. GOP Senators are considering a $30,000 cap on SALT as a compromise between the $10,000 currently allowed and the more generous limit in the House tax bill.
Lawler, however, said he is a “no” on a $30,000 cap.
The House and Senate have to agree on a plan before it can go to Trump’s desk to become law, giving Lawler and his SALT-focused colleagues leverage to demand their concerns be addressed.
Oklahoma Senator Markwayne Mullin was among Senate Republicans who met with White House Chief of Staff Susie Wiles on the tax bill on Wednesday.
He said he’ll speak with the SALT holdouts in the House later Wednesday and that “everything is on the table” in the effort to find a compromise, but that options were “narrowing.”
Vice President JD Vance met with senators on Tuesday to urge them to support the legislation.
Trump warned that making SALT a “red line” would mean a tax increase. The bill renews many of his first-term tax cuts on households and small businesses, which are set to expire at the end of the year.
Instead of agreeing that the SALT cap could be lowered, speaking with Fox Business, Lawler listed off costly items in the bill, including the child tax credit and cutting taxes on tips and overtime, that could be negotiated.
There are other variables that could be negotiated besides the cap amount, including length of time it is in place and the phase out for higher income taxpayers.
Senate Democratic Leader Chuck Schumer criticized Republican colleagues in the chamber for seeking to minimize the SALT deduction, calling that move a “a dagger aimed at the heart of blue states.”
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