Rep. Jim Jordan, R-Ohio, is backing an increased cap on state and local tax deductions in an effort to get some GOP holdouts on board with his speaker bid, according to Rep. Mike Garcia, R-Calif.
Garcia, who supports Jordan’s run for the gavel and opposes the current $10,000 “SALT” limit, said on Wednesday that Jordan is on board with a proposal he came up with to double the deduction limit to $20,000 for single tax filers and $40,000 for married couples who file taxes jointly.
It would be a notable endorsement from Jordan, who has led some of the House’s most conservative factions that tend to oppose allowing more deductions for state and local taxes.
SALT tends to benefit wealthier or high cost-of-living areas of blue states the most, like in Garcia’s California district and in New York — particularly in Long Island and the New York City suburbs. That’s where four holdouts who refused to back Jordan in two rounds of voting so far are from: Reps. Anthony D’Esposito, Andrew Garbarino, Nick LaLota and Mike Lawler.
No deal on SALT related to the speaker’s race has been made, according to a source familiar with the conversations. In part, that’s because there’s nothing currently on the table to raise the SALT cap high enough to get at least some of the New Yorkers on board.
LaLota said on Bloomberg TV that the SALT offer on the table is not enough and that New Yorkers need firm commitments. He pointed to his own bill to increase the SALT cap to $60,000 and $120,000 for married couples and one from Lawler to set it has high as $100,000, and twice that for joint filers.
Other members of that delegation denied that negotiations had even gotten to the point of discussing an offer.
“We have had and continue to engage in discussions,” Garbarino said in a statement. “As we’ve already stated, addressing the SALT cap is a top priority. However, there has been no offer made and no solutions reached.”
He added that Garcia had not participated in any meetings between the New York Republicans and Jordan, and that Garcia “does not speak for New York.”
Matt Capp, a spokesman for D’Esposito, echoed that sentiment, saying New Yorkers should speak for their state and that Garcia wasn’t involved.
“Congressman D’Esposito continues to actively negotiate,” Capp said. “A major facet of the ongoing negotiations centers around D’Esposito’s firm belief in providing SALT cap relief for Long Islanders. Congressman D’Esposito has not received any offer from Congressman Jordan on this, and claims to the contrary are simply not true.”
‘Appreciation for blue-state Republicans’
Earlier in the day, LaLota said New Yorkers and Jordan had been discussing some specifics on SALT. He said he wanted “darn good clarity” from Jordan on New York priorities, pointing out that the last 10 months showed the shortcomings of loosely agreed to, back-room promises.
“I want the next speaker to have an appreciation for blue-state Republicans from the suburbs and our constituents who have difficulty affording life in our blue states that spend a lot of money,” LaLota said. “I want the next speaker to have a specific appreciation for that.”
Jordan is attempting to succeed Kevin McCarthy, who was ousted from the speaker job over two weeks ago and struggled after making concessions of his own in a drawn-out January speaker’s race.
Jordan’s office was encouraging more negotiations and meetings as he continued to try to flip votes in his favor. The House Judiciary chairman lost an initial ballot on the House floor Tuesday and on a second vote Wednesday, his total detractors climbed to 22. A third vote was possible on Thursday.
[Related: Jordan loses ground on second speaker ballot]
Garcia said that his proposal to increase the SALT cap would be part of a House GOP tax package that has not been brought to the floor for months since Ways and Means approved it.
That trio of bills faced headwinds because Garcia, New Yorkers and fellow opponents of the current SALT cap demanded that the legislation offer their constituents more deductions for state and local taxes. Part of the challenge for House leaders has been that other Republicans oppose any relief from the SALT cap, which was created in a GOP tax law.
Garcia said Ways and Means Chairman Jason Smith was looped into the conversations about adding SALT relief to his package.
Smith has been made aware of the Republicans’ SALT concerns in the context of the speaker’s race and is open to finding a solution, as he has been for months while having conversations about the tax package, according to a Smith aide.
Garbarino is the lead sponsor of legislation that would repeal the SALT cap entirely. He has seven GOP co-sponsors, including the other New Yorkers as well as Garcia. But different members of their states’ delegations, as well as lawmakers from New Jersey who support SALT relief, have employed different negotiating tactics on the issue.
Garcia said he told Jordan that he’d be okay with a “Plan B” of letting the cap expire after 2025, when it’s set to lapse and revert to unlimited write-offs for state and local taxes. But he said increasing the cap to $20,000 for individuals and $40,000 for married couples would be a victory for most members of the SALT Caucus who have pressed for relief.
While the discussion was happening squarely in the context of electing Jordan speaker, Garcia said he believes it could still be an option if Jordan doesn’t win the gavel and that he saw progress in addressing the issue with Smith.
“I’m going to make sure that we keep this conversation going now,” Garcia said. “So there’s a short-term win here, a silver lining.”