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‘SALT’ bill on shaky ground after getting over Rules hump

Democrats back lifting deductions cap, but argue GOP bill is an election-year gift

Rep. Mike Lawler, R-N.Y., is seen in the Capitol after the last votes of the week on Friday, Jan. 12, 2024.
Rep. Mike Lawler, R-N.Y., is seen in the Capitol after the last votes of the week on Friday, Jan. 12, 2024. (Tom Williams/CQ Roll Call)

Republican-backed legislation to temporarily boost the cap on state and local tax deductions cleared a key hurdle on Thursday, but the House Rules Committee vote portends tough sledding for GOP leaders to get the bill on the floor next week.

After an “emergency” meeting to consider the tax bill that began at 8 a.m. and featured a lengthy recess behind closed doors, Rules reported out a closed rule for floor debate on an 8-5 vote. GOP leaders attached a separate resolution critiquing President Joe Biden’s energy policies to the same rule, which may have helped shore up support.

Rep. Chip Roy, R-Texas, was the lone GOP defector on the rule in committee, and House Republican leaders have noticed the “SALT” bill as a possibility for the floor next week. But with Republicans’ margin down to potentially two votes next week due to absences, Speaker Mike Johnson, R-La., and his whip team may have some convincing to do.

“I really don’t know. I don’t have any idea,” Rules Chairman Tom Cole, R-Okla., said of the rule’s prospects on the floor. “This is obviously an issue that I think really divides Congress on a bipartisan basis, so I certainly wouldn’t expect Democrats to vote for a rule. We’ll see what happens.”

Leadership called the early-morning Rules session out of deference to blue-state Republicans like Mike Lawler of New York, the bill’s lead sponsor. “This is a very minor expense while providing room for significant economic growth to communities like mine in the Hudson Valley and tax relief to families across the country,” Lawler told the Rules panel.

The bill would double the $10,000 cap on SALT deductions for married couples for the 2023 tax year only — so in theory households could claim the extra benefit on their returns filed before this April’s deadline, though Democrats argued the IRS wouldn’t have time to get their systems ready. The extra deductions would be available only to joint filers earning up to $500,000.

Democrats also said the only reason for the so-called emergency meeting was that Lawler and his fellow New Yorkers extracted a pledge from Johnson to bring their bill to the floor separately, after SALT relief was left out of a popular $79 billion package of business and family tax breaks.

That measure sailed through the House on Wednesday night, 357-70, under suspension of the rules, which doesn’t allow for amendments but requires a two-thirds majority of lawmakers present. Lawler and three other New York Republicans — Andrew Garbarino, Nick LaLota and Anthony D’Esposito — were able to secure their commitment after threatening to sink the rule for floor debate on unrelated immigration measures.

[Tax bill overcomes objections from left and right, passes House]

Inside Elections with Nathan L. Gonzales rates Lawler’s and D’Esposito’s seats Toss-ups, while LaLota’s is considered Lean Republican. Democrats sought to paint the concession as an election-year gift to help shore up a shaky GOP majority.

“This isn’t an emergency, this is offensive,” Rules ranking member Jim McGovern, D-Mass., said. “The emergency we are meeting on today is Mike Lawler and his New York Republicans’ election.”

‘Regular order’ debate

During the Rules meeting, Roy and Rep. Thomas Massie, R-Ky., criticized the process that led up to that point.

They said the tax bill that passed on suspension Wednesday should have gone through the Rules panel so that members could debate it, and that the SALT bill under consideration at Rules on Thursday should have gone through the committee of jurisdiction, the House Ways and Means Committee.

And Massie took issue with the members who nearly derailed the unrelated rule on immigration legislation, saying he didn’t want to “reward somebody who threatens passage of unrelated legislation with a hearing on the topic that they care about.”

“It’s unfortunate in this chamber that we’re kind of at that point where people feel like they have to do that, and it’s because we didn’t have regular order on that tax bill, that we are here trying to create a substitute for regular order,” Massie said.

He ultimately supported the rule in committee, though it wasn’t clear how he’d vote on the floor.

Rep. Ralph Norman, R-S.C., a Freedom Caucus member who’s flouted leadership before, ultimately backed the rule in committee, though he said he couldn’t support the bill on the floor because it isn’t paid for.

Roy, however, wasn’t persuaded. “I do not believe this is regular order in any way, shape or form,” he said. “This is not the way we should be doing things. I don’t think the vote last night is the way we should be doing things.”

Roy said he hadn’t had time to study the SALT bill’s impact, nor was a score available for its deficit effects, though Lawler said his understanding was it would cost about $7 billion over a decade. 

Ways and Means Chairman Jason Smith, R-Mo., who has opposed reopening the 2017 tax law’s SALT cap all year, isn’t a cosponsor of Lawler’s bill and was nowhere to be found during the Rules emergency meeting on the bill, which Democrats happily pointed out.

“I don’t want to speak for all of my colleagues on the Ways and Means Committee, but I suspect like me, most of them take offense to tax bills and other bills of our jurisdiction not coming through our committee,” Rep. Brad Schneider, D-Ill., said at the meeting.

While much was made of Smith’s absence from the Rules panel debate, he said he backed the New Yorkers’ pursuit of SALT relief.

“If members of my conference can get wins, I’m very excited,” Smith said Thursday. “The SALT guys have been advocating since their Day One up here…trying to deliver relief back home, so I’m proud of any opportunity they have to move forward.”

Smith did not respond to a question about how he would vote on the bill if it comes to the floor.

Other members of the Ways and Means panel said they were sympathetic to the blue-state Republicans pushing to increase the marriage cap for SALT deductions, but would have preferred the bill to go through the tax committee. 

“Not going through the committee is never the right process,” said Rep. Blake D. Moore, R-Utah. “This is a tough, tough environment to navigate. I know that these New Yorkers are — and then some other states — are passionately trying to serve their constituents and you can never fault anybody for that.”

Ways and Means member Nicole Malliotakis, R-N.Y., said she’d support the bill on the floor

“Look, I think it should go through Ways and Means. It should go through the proper process, but we’ll take the SALT however we can get it,” she said, adding that New York Republicans should already be looking ahead to 2025 when the cap expires along with many tax provisions included in the 2017 law.

“2025 is really the year where I think New York members and the SALT Caucus can have the most leverage to get significant changes,” she said. “But I certainly support it and hope that we can get it out of the House. We’ll see what [Senate Majority Leader Charles E. Schumer, D-N.Y.] does.”

‘Political camouflage’

Rep. Richard E. Neal, D-Mass., top Democrat on Ways and Means, said he was undecided despite supporting SALT relief in the past.

“I could oppose it based on the political camouflage that it’s offering,” Neal said. “The problem doesn’t go away, and it’s the result of a tax law they wrote.”

House Minority Leader Hakeem Jeffries, D-N.Y.,  similarly appeared hesitant to offer support for what could help endangered Republicans get reelected.

“My colleagues from New York came to the Congress last year and said their top priority was going to be to fix the state and local tax deduction that Republicans broke, and they have failed to do it repeatedly,” he said.

Jeffries said every Republican on Ways and Means voted against an amendment from Rep. Bill Pascrell Jr., D-N.J., to raise the SALT cap to $60,000 during the bipartisan tax bill markup, while every Democrat voted for it.

“That’s a record that is eventually going to be litigated by the people of New York state, and the people of this nation,” he said.

Aidan Quigley contributed to this report.

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