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House GOP clears path for tax package with ‘SALT’ on the side

Despite broad bipartisan support in House, some GOP senators aren't yet sold on tax deal

Sen. Michael D. Crapo, R-Idaho, arrives on the Senate subway for a vote on Wednesday.
Sen. Michael D. Crapo, R-Idaho, arrives on the Senate subway for a vote on Wednesday. (Bill Clark/CQ Roll Call)

House leadership smoothed the path for consideration of a $78 billion family and business tax break deal Wednesday by committing to a floor vote as soon as next week on a separate bill to boost the state and local tax deduction cap for married couples.

The concession comes after four New York Republicans threatened to vote down an unrelated rule on the floor Tuesday in protest of the exclusion of “SALT” relief from the tax deal negotiated by House Ways and Means Chairman Jason Smith, R-Mo., and Senate Finance Chair Ron Wyden, D-Ore. The House is slated to vote on the Wyden-Smith deal Wednesday around 8 p.m.

Athina Lawson, press secretary for Speaker Mike Johnson, R-La., said in a statement that Johnson and Smith “agreed that they would continue working with members to find a path forward for legislation related to SALT.”

House leaders agreed to hold a separate floor vote on a measure that would increase the $10,000 cap to as high as $20,000 for married couples filing jointly, according to a source familiar with negotiations. That framework would mirror legislation introduced by Rep. Mike Lawler, one of the Republicans who voted against the rule Tuesday before flipping his vote to “yea.”

One possibility under discussion would be to pair SALT relief with conservative policy demands pushed by the House Freedom Caucus related to the child tax credit, such as requiring parents collecting the credit to provide their Social Security numbers as a check against undocumented immigrants, other sources said. Negotiations are still ongoing, they said.

‘The big enchilada’

GOP Ways and Means members leaving their weekly lunch on Wednesday generally supported a plan to consider a SALT bill separately, though they said they didn’t know the details, including whether a side deal would include conservative policy demands.

Rep. Nicole Malliotakis commended her fellow New Yorkers for bringing attention to SALT relief and said she welcomed a floor vote on a stand-alone bill.

“I’ve always said that a vote on SALT needs to be separate from the actual tax package that was negotiated between the two houses because we were dealing specifically with provisions that were expiring,” she said.

Still, 2025 will provide the bigger opportunity to push for SALT relief when the $10,000 limit expires along with many of the 2017 tax cuts.

“The big enchilada is 2025,” Malliotakis said. “That’s when everything’s up for grabs. Hopefully we’ll get through this cycle and come back next year being able to get more relief.” 

Rep. Brian Fitzpatrick, R-Pa., said a vote on a stand-alone bill seemed like a reasonable compromise.

“It’s been a tough issue for this because its inclusion could collapse support elsewhere,” he said of SALT relief getting added to the Smith-Wyden package. “If we do a separate vote on it, I think that’d be a fair thing to do for them.”

The talks between leadership, blue-state Republicans and the House Freedom Caucus cleared a path for the House to consider the Wyden-Smith deal under suspension of the rules. Doing so will block floor amendments and limit debate, but would require a two-thirds majority of voting members to pass. 

The package would devote about $33 billion to reviving a trio of business tax breaks and roughly the same amount to expand the child tax credit with the most significant gains going to low-income families with more than one child. It would also boost affordable housing construction credits, end the double-taxation of U.S. companies operating in Taiwan and provide tax relief for victims of natural disasters.

Fitzpatrick said he thought the package would muster the votes needed to pass under suspension. 

“The good thing about it being on suspension is people are free to vote their districts. I don’t think we have a problem getting to 290,” he said. “In a pretty divided Congress to be able to get a major item like this across the finish line is a good thing.”

Clearing the two-thirds threshold will require significant support from Democrats. Some have criticized the Wyden-Smith deal for doing too little to expand the child tax credit, but Democratic Caucus Chair Pete Aguilar of California said Tuesday that his party stood ready to find a bipartisan path forward. 

“It’s not the tax bill that we would have drawn,” Aguilar said. “But clearly, this will be a suspension bill and clearly this is something that Democrats are relied upon in order to go forward with.”

The separate SALT bill, meanwhile, would likely move under a rule next week, requiring just a simple majority for passage, according to a source familiar with the talks.

Senate ‘razzmatazz’

Meanwhile in the Senate, Finance Chair Wyden said he would push to get the bill enacted “as quickly as possible,” despite outstanding reservations from Republicans.

“I think people in the country are going to say, ‘It’s been a long time since there’s been something bipartisan on taxes,’” Wyden said. “To do this, in this kind of political climate, I think people are going to say, ‘get this done.’ And the IRS said they can get the checks out pretty quick.”

Wyden hinted that there would not be a Senate Finance Committee markup of the legislation for timing reasons. He declined to comment on the prospect of a stand-alone SALT bill. 

“I think that families, and small businesses and others are going to say, ‘Let’s not have a lot of Washington razzmatazz that holds up us getting this help.’ They are going to want to get this done,” he said. 

That plan is likely to face opposition from Senate Republicans and some Democrats, who have called for a committee vote on the package before it goes to the floor. 

“The Senate has its own processes,” Sen. Michael D. Crapo of Idaho, the top Republican on Senate Finance said. “I never can predict how fast we’re going to move around here.”

Minority Whip John Thune, R-S.D., said senators will want an opportunity to amend the bill.

“That could be regular order through the Senate Finance Committee or maybe there’s a way of having an amendment process on the floor,” Thune said. The Senate Finance member has criticized the package for weakening work requirements attached to the child tax credit by allowing families to use the previous year’s income to qualify.

Sen. Thom Tillis, R-N.C., who opposes the deal, said lawmakers should take time to “get the child tax credit right,” in the context of the broader tax law provisions expiring next year.

“I think it’ll probably get support,” Tillis said of the bipartisan bill. “I’m just not going to make it easy.”

Senate Majority Leader Charles E. Schumer, who supports the Wyden-Smith measure, said Tuesday he and Wyden were still discussing the best way to move the bill.

As for SALT, the New York Democrat is a longtime critic of the GOP move to cap the deductions, though he didn’t make any specific commitments on Tuesday.

“It’s been extremely detrimental to my state and many blue states. And we’re going to figure out the best way to undo it,” Schumer said.

Aidan Quigley, David Lerman, Caroline Coudriet and Paul M. Krawzak contributed to this report.

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