Trump Gathers SALT-Focused Republicans Before Tax Fight
(Bloomberg) -- A cohort of about 20 Republican House members from New York, New Jersey and California was invited to meet with President-elect Donald Trump at his Mar-a-Lago estate Saturday ahead of a looming fight over an extension of his 2017 tax cuts.
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Much of the group is likely to attend and plans to discuss increasing the $10,000 cap on state and local tax deductions, which has disproportionately hurt voters in the three high-tax states, according to US Representative Nick LaLota, who represents eastern Long Island in New York.
Republicans in Congress are in the beginning stages of negotiating a package that will extend Trump’s 2017 tax cuts — including the future of the cap on the SALT deduction, which will otherwise expire — and address the other legislative priorities of immigration and energy production. The meeting is a positive sign for lawmakers seeking to expand the deduction, a politically divisive write-off that reduced tax bills for some residents of high-tax states.
In an interview with Bloomberg, LaLota said the group of lawmakers includes four other representatives who are banding with him to push for a “reasonable” adjustment to the cap on so-called SALT deductions. The cap was imposed as part of the 2017 bill.
“There are five very salty Republicans — I would expect that somebody in his position would appreciate that dynamic and would want to provide an accommodation to get the bill passed,” he said. “The five of us have the opportunity to effectuate an even more beautiful, big bill.”
The group, which also includes New Yorkers Andrew Garbarino and Mike Lawler, New Jersey Representative Tom Kean and California’s Young Kim, will push to expand the deduction — currently capped at $10,000 regardless of marital status — that would deliver big savings to their constituents as part of a larger tax package, said LaLota.
While he declined to comment on what the group would consider to be an acceptable cap, last month he said that a potential plan by Trump’s economic advisers to double the tax write-off limit to $20,000 “is not reasonable.” He also told Bloomberg the removal of the so-called marriage penalty — the fact that the limit is the same for both single and married taxpayers — on its own would be insufficient for the “salty” five.
Lawler reintroduced legislation that proposes raising the cap to $100,000 for individuals and $200,000 for married couples, but he acknowledged in an interview Wednesday with Bloomberg Television that “this is going to be a negotiation.”
Lawler said New Yorkers shouldn’t be punished for living in a high-tax state, especially one that gives more to the federal government than it gets back.
“The $10,000 cap is woefully insufficient,” Lawler said, adding that members from other states beyond New York, New Jersey and California quietly support an increase in the cap.
Spokespeople for Lawler, Garbarino, Kim and Kean confirmed their plans to attend the meeting with Trump. Spokespeople for Trump didn’t respond to a request to comment.
New York Governor Kathy Hochul weighed in on Trump’s upcoming meeting by calling on GOP lawmakers from her state to push for a full repeal of the cap.
“Republicans have drained billions directly from the pockets of their own constituents, and now it’s time for them to deliver,” she said in a statement. “This cap has cost New Yorkers as much as $12 billion every year since it took effect in 2018, robbing middle-class families of their hard-earned money.”
Because of its slim majority in the House, the GOP can only afford to lose the support of a couple of congressional Republicans to advance the bill through a process known as budget reconciliation. The process, which would allow the GOP to pass legislation only with Republican votes, depends on near-universal agreement within its narrow majorities in the House and Senate. That puts great pressure on Trump and Republican leaders to negotiate a package that appeases both their far-right flank as well as members from the New York City-area and Southern California, for whom expanding the SALT deduction is a political priority.
“The math dictates that any small group of members can block anything that is going to be Republican,” LaLota said. “And that math isn’t just particular to the SALT discussion, but just about anything and everything we do here in this town. That said, that President Trump is bullish on SALT and wants to provide a fix and is inviting us to Mar-a-Lago to be a part of that fix gives me great optimism.”
While it was Trump who curbed the tax break as part of his signature 2017 legislation, on the campaign trail he vowed to expand the cap. LaLota credited the change of heart to efforts by lawmakers to develop a relationship with Trump.
In addition to taxes, LaLota said that he and Lawler also plan on discussing with Trump New York City’s congestion pricing toll, which went into effect this week and charges drivers $9 for entering Manhattan’s central business district. Trump had said he opposes the fee.
LaLota said the toll especially hurts suburbanites from his and Lawler’s districts, who “should not be a piggy bank to the bloated MTA.”
--With assistance from Billy House, Annmarie Hordern and Jonathan Ferro.
(Updates with comment from Governor Hochul in the 12th paragraph.)
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