President Donald Trump urges New York House Republicans to pass budget bill despite SALT concerns

WASHINGTON — President Donald Trump distanced himself from his full-throated campaign pledge of "restoring the SALT deduction," as he pressed New York Republicans Tuesday to vote for a sweeping budget bill despite their objections that the proposed deduction cap offers little relief.

Trump, in a closed-door meeting with House Republicans on Capitol Hill, urged the group to quickly pass a massive budget bill stacked with his legislative priorities, even if it means outstanding issues including a higher SALT deduction cap pitched by Long Island’s House Republicans are dealt with later, a White House official familiar with the discussions told Newsday in an email.

Hours after the meeting, Reps. Andrew Garbarino (R-Bayport), Nick LaLota (R-Amityville), and a coalition of blue-state Republicans appeared to reach a tentative deal with House Speaker Mike Johnson that would raise the SALT deduction cap to $40,000 for households earning $500,000 or less, sources familiar with the deal told Newsday. The deal to raise the current $10,000 cap came after the New York lawmakers announced they would continue to withhold their support from the mega bill unless there was a bigger cap beyond the $30,000 limit approved by the House Ways and Means Committee last week.

Johnson has been pushing for a floor vote this week on the Trump-backed bill that includes a boost in border security funding, changes to Medicaid eligibility requirements and an extension of the 2017 Trump-led tax plan that first set the $10,000 cap on state and local tax deductions commonly referred to as SALT. 

The cap has been a source of division as red-state Republicans and some liberal Democrats cast the deduction as a carve-out for wealthy homeowners in Democratic-run states. Blue-state Republicans argue that the ability to write off state and local taxes ensures homeowners are not double-taxed on their income. Under the plan tentatively reached Tuesday night, the $40,000 cap and income threshold would increase by 1% each year over a 10-year period, according to sources familiar with the plan.

Trump, asked by a reporter before entering the morning meeting what his message was to New York Republicans who were holding out for a higher cap, responded by taking jabs at Gov. JB Pritzker (D-Ill.) and Gov. Gavin Newsom (D-Calif.), who are often floated as potential 2028 presidential candidates. Trump did not mention Gov. Kathy Hochul by name, but did mention New York.

"The biggest beneficiary if we do that are the governors from New York, Illinois and California," Trump said.

The messaging differed from Trump’s direct pledge on social media and at a campaign rally at the Nassau Coliseum in September to "get SALT back."

At the Sept. 18 rally at the Coliseum, Trump said: "I will cut taxes for families, small businesses and workers, including restoring the SALT deduction, saving thousands of dollars for residents of New York, Pennsylvania, New Jersey and other high-cost states."

A White House official, in an email sent on the condition of anonymity to describe the meeting freely, said Trump’s "direct and clear" request to Republicans in the room included not letting "SALT impede this bill. Republicans can fight for SALT later on."

Long-running debate

 The suggestion to delay action on SALT comes amid an eight-year bipartisan fight from lawmakers in New York, New Jersey and California to undo the cap. Some lawmakers on both sides of the aisle see the ongoing negotiations over the budget bill as a critical moment to secure an increase to the cap as Trump and congressional Republicans push to renew the 2017 tax plan that ushered in the cap.

"The president also made it clear he’s losing patience with all holdout factions of the House Republican Conference, including the SALT Caucus and the House Freedom Caucus," the official said, referring to the group of ultraconservatives who argue the bill does not cut enough spending.

Garbarino, LaLota and three other blue-state House Republicans who have been negotiating directly with Johnson on SALT issued a joint statement after the meeting, noting they have been working with Johnson and his team for more than a year on increasing the cap.

"A fair SALT deduction is a matter of fundamental fairness for the hardworking families we represent, including the many who proudly support President Trump and voted for him, in part, because he promised to restore SALT," said the statement, also signed by Reps. Mike Lawler (R-Pearl River), Tom Kean (R-N.J.) and Young Kim (R-Calif.) "We hope his remarks today motivate the Speaker to advance a SALT proposal that delivers meaningful relief for our middle-class constituents."

Garbarino, LaLota and Lawler told reporters outside of Trump’s meeting that they still planned to vote down the package if a larger cap is not added.

Seeking compromise

The coalition of blue-state Republicans met with Johnson behind closed doors for more than two hours Monday night and for several hours Tuesday looking to negotiate a compromise,. Johnson, who can only afford to lose three House Republican votes for the measure to pass along party lines, must also negotiate with fiscal conservatives who oppose a higher SALT cap as they demand deeper spending cuts.

Garbarino told Newsday on Tuesday morning that the group was "currently working through a menu of options."

Sen. Chuck Schumer (D-N.Y.), the senate minority leader, in a floor speech on Tuesday blasted Trump’s stance on SALT.

"When Trump came to Long Island and talked a big game about restoring SALT relief, I called it a farce," Schumer said. "It was actually a lie. And today, he has proved himself a liar — and has seemingly played New York House Republicans for fools."

Rep. Laura Gillen (D-Rockville Centre) filed an amendment to the budget bill, calling for a full repeal of the SALT cap. The measure, co-sponsored by Rep. Tom Suozzi (D-Glen Cove), is not likely to get adopted by the Republican majority, which has voted down previous attempts as a full repeal.

By Laura Figueroa Hernandez

laura.figueroa@newsday.com@Laura_Figueroa

Laura Figueroa Hernandez is the White House correspondent and previously covered New York City politics and government. She joined Newsday in 2012 after covering state and local politics for The Miami Herald.