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Budget Vote Murky Over GOP State and Local Tax Concerns

Defections expected, but how many TBD

Rep. Leonard Lance, R-N.J., leaves the House Republican Conference meeting at the Capitol Hill Club in Washington on Wednesday, May 17, 2017. (Bill Clark/CQ Roll Call file photo)
Rep. Leonard Lance, R-N.J., leaves the House Republican Conference meeting at the Capitol Hill Club in Washington on Wednesday, May 17, 2017. (Bill Clark/CQ Roll Call file photo)

Some House Republicans looking to preserve the state and local tax deduction expressed concerns Tuesday about voting for the Senate budget resolution.

Disagreements over the so-called SALT deduction likely won’t sink the measure, which is scheduled to come to the House floor Thursday. 

But it is the latest example of how serious lawmakers from high-tax states such as New Jersey, New York, California and Illinois are about keeping it in some form. Collectively those states are home to 35 House Republicans — 25 of them Democratic targets in 2018 — more than enough to sink the budget or the tax overhaul.

New Jersey Rep. Leonard Lance said he plans to vote against the budget largely because of nonbinding language added by the Senate during its vote-a-rama that calls for repealing the SALT deduction.

“I am negotiating from a position that we should retain SALT as is,” Lance said. Pushed on whether that means he’s opposed to proposals to keep the deduction in a more limited form, he said, “I favor keeping it in full.”

Other members are more open to compromise and have been working with Ways and Means Chairman Kevin Brady and GOP leaders to that end.

But after a meeting on the topic Tuesday Rep. Tom MacArthur said they did not make as much progress as he had hoped.

“For me now the budget is a question mark too,” the New Jersey Republican said, noting he “might” vote against it if a compromise on “SALT” is not reached before then. He said other members feel the same way.

Although he hasn’t conducted a whip count, the concerns may be great enough to imperil the budget vote.

“That’s why we’re having all these discussions,” he said.

In addition to the meeting with GOP leaders and other members concerned about SALT, MacArthur had a one-on-one meeting with Vice President Mike Pence at the White House that he declined to detail.

House Budget Committee Chairwoman Diane Black remains confident the budget will pass Thursday.

“I think we’ll probably be ok,” the Tennessee Republican said.

While some members may vote “no” on the budget because they want to see the text of the tax bill, others are fine with progress made to date, Black said.

On the SALT deduction in particular, she said Brady has listened to the concerns and helped many members feel comfortable that there will be a solution.

Rep. Chris Collins also said he believes most members who dislike the Senate-added language opposing SALT will ultimately support the budget.

“It’s just language. It doesn’t mean anything,” the New York Republican said. “It’s unfortunate it’s there, but we’re trying to unleash reconciliation.”

“I’ve talked to several people who don’t like the language, but they’re voting for the budget because that’s the only way we get to reconciliation. They recognize we have to do tax reform or next year is awful,” he said, referring to the 2018 midterm elections.

Collins, who is planning to support the budget, did not participate in the meeting with GOP leaders Tuesday, saying he believes that was just a meeting with members whose arms still needed twisting.

The New Yorker has been less concerned about the proposal to repeal SALT than other GOP lawmakers from his state. He believes the doubling of the standard deduction will make it so most people don’t itemize and thus wouldn’t claim the deduction.

However, Collins said he anticipates some form of the SALT deduction will be included in the bill to appease others.

“Reading in the tea leaves” he said he expects the bill will ultimately only preserve the SALT deduction as it applies to property taxes, not income or sales taxes, and that it will include a cap on the amount that can be deducted and/or only allow taxpayers who make under a certain income threshold to claim it.

Such a compromise proposal is more about politics and ensuring members don’t have commercials run against them saying the voted to eliminate the SALT deduction, Collins said.

“I think they have to give the [35] Republicans in New York, New Jersey, Illinois and California a get out of jail free card,” he said.

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