Johnson closes in on SALT breakthrough with House GOP holdouts
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House Speaker Mike Johnson and President Trump earlier this month. Photo: Andrew Harnik/Getty Images
House Speaker Mike Johnson is tantalizingly close to a deal with blue state Republicans on a SALT compromise, according to people familiar with the matter.
Why it matters: Johnson is "not quite there yet," he told reporters, but sources say Johnson is close to solving one of the thorniest problems in the "big, beautiful bill."
- He held a 'productive meeting" with Republicans who are threatening to vote against the bill, according to a source familiar with the negotiations.
- "Discussions moving in the right direction," the source said.
- "We got into some details about different variables, different caps," Rep. Nick LaLota (R-N.Y.) told reporters.
- "Folks are talking about how long this lasts and all those variables and to see if there's a number that we could get to. And if we don't, I'm going to vote no on the bill, and the bill likely won't pass."
The intrigue: Rep. Nicole Malliotakis (R-N.Y.), a Ways and Means committee member, was asked to leave the meeting, Axios confirmed. Members were upset with her signaling that she was fine with the $30,000 cap, according to a person familiar with the matter.
- "All I know is they can sit and negotiate with themselves all they want, but there will be no changes unless I and the committee agree," she told reporters.
Driving the news: Rep. Elise Stefanik (R-N.Y.) was instrumental in setting up the meeting with Johnson, which occurred in two acts, with a break for votes.
- She was joined by New York Reps. Mike Lawler, Nick LaLota and Andrew Garbarino, as well as New Jersey's Tom Kean and California's Young Kim.
- But tonight's positive momentum was a remarkable turnaround.
- Earlier in the day, tempers were flaring with Lawler questioning if House Ways and Means Chair Jason Smith (R-Mo.) would even have his "f**king gavel" if it weren't for the SALT caucus.
Between the lines: Johnson will still have to "manage the other flank of this to make sure it's not a bridge too far," said another person familiar with the negotiations.
Zoom out: Johnson still has dozens more problems to solve.
- He is facing a potential rebellion from conservatives (and moderates) over the $625 billion in savings the bill will wring from Medicaid.
- Four GOP senators — in addition to more than 20 House Republicans — are concerned about potential cuts to the Inflation Reduction Act clean-energy tax incentives.
- In total, the committee is looking at $515 billion in savings from energy-related tax provisions.
By the numbers: The Joint Committee on Taxation (JCT) has calculated that the tax cuts considered by the Ways and Means Committee will cost some $3.8 trillion.
- The budget agreement passed in March allows Congress to authorize $4 trillion in tax cuts if it reduces spending by $1.5 trillion.
- JCT assumed the SALT cap would rise to $30,000 from its current $10,000, which sent a signal to SALT Republicans that they had approximately $200 billion in headspace.
- Trump's plan to exempt overtime pay from taxes will cost $124 billion over four years. Doing the same for tips will amount to $40 billion in less revenue.
