GOP divided on lifting SALT cap
Rep. Mike Lawler, R-NY, joins “Sunday Morning Futures” to discuss Trump’s meeting with blue-state Republicans on lifting the SALT cap and congestion pricing in New York.
President-elect Donald Trump is giving Republicans his blessing to negotiate a key tax that could prove crucial to the GOP’s negotiations for a massive conservative policy overhaul next year.
Trump met several different groups House Republicans at Mar-a-Lago this weekend, including blue-state GOP lawmakers who make up the House SALT Caucus — a group opposed to the current $10,000 cap on state tax deductions and (SALT) that primarily affect urban and suburban residents. in areas with high income and property taxes, 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 blue state mayors and governors are crushing taxpayers and wants to provide relief at the federal level.”
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President-elect Donald Trump told New York Republicans he would work with them on a number of priorities. (Chip Somodevilla/Getty Images)
But Trump also indicated he was aware of opposition from other members of the House GOP conference, particularly Republicans in rural districts, who view SALT deductions as tax breaks for the wealthy. Before the cap was imposed in 2017, there was no limit on the amount of state property taxes 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 give our middle-class voters some relief from the high taxes imposed by our governor and our mayor, and at the same time, you know, something that could build consensus and achieve (a majority of 218 votes),” Malliotakis said.
“I think we pretty much know that this is not going to be a complete removal of the SALT cap. There is no appetite in Congress, or even among American taxpayers, to reduce the taxes on the ultra-rich.
“Our efforts are really targeting middle-class families, and that’s where we’re focused on trying to get the balance right.”
The current SALT deduction cap has been challenged by New York and California lawmakers for much of its existence, since it was levied as part of Trump’s Tax Cuts and Jobs Act (TCJA).
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Rep. 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 September last year, when he posted on Truth Social that he would “take back SALT, cut your taxes and much more.”
These discussions are part of Republicans’ broader discussions about enacting a massive overhaul of fiscal and conservative policy through a process known as “reconciliation.”
By lowering the threshold for Senate passage to a simple majority instead of two-thirds, the process allows the party that controls both chambers of Congress and the White House to pass certain laws provided they address budgetary issues and other tax matters.
Some pro-SALT Republicans on the deduction, like Rep. Mike Lawler, R-N.Y., had signaled they might withhold support for the final bill if the cap was not increased.
“The only red line I have is if there’s a tax bill that doesn’t lift the cap on SALT, I’m not going to support that,” Lawler told Fox News’ “Sunday Morning Futures.”
Lawler also said Trump agreed that SALT deduction limits should be raised.
House Republicans have virtually no margin for error with a razor-thin majority from Trump’s inauguration until probably April.
Rep. Mike Lawler said the SALT deduction caps were a “red line” for his support of a budget reconciliation bill. (Tierney L. Cross)
Meanwhile, Trump also told New York Republicans he would help them fight controversial congestion pricing rule this imposes an additional cost to drive in certain parts of Manhattan.
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“He understands how unfair this is and what impact it would have on the city’s economy and the people we represent. So we are currently working with him on legal options to overturn the automatic approval of the Biden administration,” Malliotakis said. “If there is a legal option, if there is a legal option to end congestion pricing, he will do it.”
“You know, there are cops, police officers, firefighters, nurses, restaurant workers who have to go at odd hours, and they drive because they don’t feel that the public transportation system doesn’t “is not clean or safe.”
Congestion pricing went into effect in New York earlier this month.
Fox News Digital has reached out to the Trump transition team for comment on this weekend’s meeting.