GOP divided on lifting the salt cap
Rep. Mike Lawler, R-N.Y., joins “Sunday Morning Futures” to discuss Trump's meeting with blue-state Republicans about raising the SALT cap and congestion pricing in New York City.
President-elect Donald Trump has given Republicans his blessing to negotiate a key tax that could be crucial to GOP negotiations for a sweeping conservative policy overhaul next year.
Trump met with Several different groups of House Republicans at Mar-a-Lago over the weekend, including blue state GOP lawmakers who make up the House SALT Caucus — a group that opposes the current $10,000 cap on state and local tax (SALT) deductions that affects the denominator. The first is on urban and suburban residents in areas with high income and high property taxes, such as New York, New Jersey and California.
“I think it was productive and successful,” Rep. Nicole Malliotakis said of the meeting. “The President supports our efforts to increase the SALT deduction. “He realizes that mayors and governors in blue states are crushing taxpayers and wants to provide relief at the federal level.”
Johnson slams Democrats' accusations that he pledged to end Obamacare as 'dishonest'
President-elect Donald Trump told Republicans in New York he will work with them on a number of priorities (Chip Somodevila/Getty Images)
But Trump also noted that he was aware of opposition from others in the House GOP conference, especially rural Republicans, who viewed SALT deductions as tax breaks for the wealthy. Before the cap was imposed in 2017, there was no limit on the amount of state income taxes and local property taxes people could deduct from their income when filing their federal returns.
“It gave us a little bit of homework to work on, a number that could provide our middle-class voters with relief from the high taxes imposed by our governor and mayor, and at the same time, you know, something that could build consensus and reach agreement.” Malliotakis said (with a majority of 218 votes).
“I think we pretty much know there's not going to be a complete lift of the SALT cap. There's no appetite within Congress or even among American taxpayers to cut taxes on the super-rich.
“Our efforts are actually targeting middle-class families, and that's what we're focusing on trying to get the balance right.”
The current maximum SALT deduction has been opposed before New York and California lawmakers throughout most of its existence, since its imposition in the Trump Tax Cuts and Jobs Act (TCJA).
RFK Jr. To meet with a large number of Democrats including Elizabeth Warren and Bernie Sanders
Rep. Nicole Malliotakis told Fox News Digital that Trump will work with New York Republicans on congestion pricing (Drew Angerer/Getty Images)
Trump suggested he would change course during his second administration as early as September last year, when he posted on Truth Social that he would “take back salt, cut taxes, and much more.”
These discussions are part of broader talks among Republicans about passing comprehensive fiscal and conservative policy reform through a process known as “reconciliation.”
By lowering the Senate's threshold for passing legislation to a simple majority rather than two-thirds, this process allows the party that controls both chambers of Congress and the White House to pass certain legislation provided it handles budget and other fiscal matters.
Some Republicans who support cutting SALT, such as Rep. Mike Lawler, D-N.Y., have indicated they may withhold support from the final bill if the cap is not increased.
“The only red line I have is if there's a tax bill that doesn't raise the maximum SALT tax, I won't support that,” Lawler told Fox News Channel's Sunday Morning Futures.
Lawler also said Trump agreed the SALT deduction cap should be raised.
House Republicans have little room for error with a razor-thin majority from Trump's inauguration until likely sometime in April.
Rep. Mike Lawler said the SALT deduction caps were a “red line” for his support for the budget reconciliation bill (Tierne El Croce)
Meanwhile, Trump also told New York Republicans that he would help them fight their state Controversial congestion pricing rule Which imposes an additional cost for driving in parts of Manhattan.
CLICK HERE TO GET THE FOX NEWS APP
“He understands how unfair this is and how it will impact the city's economy and the people we represent, so we are currently working with him on legal options to revoke the Biden administration's rubber stamp,” Malliotakis said. “If there was a legal option, if there was a legal option for him to stop congestion pricing, he would do it.”
“You have, you know, police officers, police officers, firefighters, nurses, restaurant workers who have to go at odd hours, driving their cars because they don't feel like the transit system is clean or safe.”
Congestion pricing went into effect in New York City earlier this month.
Fox News Digital has reached out to Trump's transition team for comment on this weekend's meeting.
