House Speaker Mike Johnson is urging Senate Republicans not to change the agreement that raises the state and local tax (SALT) deduction cap to $40,000. He is resisting President Donald Trump’s willingness to reduce this limit.
Johnson told reporters at the White House on Monday that he wants the Senate to make as few changes as possible. He explained that the deal is a delicate balance because many members of his conference represent high-tax states like New York, New Jersey, and California. He emphasized that the SALT deduction is very important to their constituents.
Last month, Johnson helped secure a deal to raise the SALT cap from the current $10,000 to $40,000. This increase was key to passing Trump’s tax bill in the House. However, as the Senate begins its negotiations, the SALT issue has lost priority. No Republican senators come from states where SALT is a major political concern.
Trump recently told Senate Republicans he is open to a lower SALT cap than the $40,000 approved by the House. Some House Republicans have threatened to block the bill if the Senate reduces the SALT deduction, creating tense negotiations between the two chambers. They aim to pass the bill by the self-imposed July 4 deadline.
In addition to SALT, some Senate Republicans want to cut the bill’s overall cost. Others want to slow down changes to Medicaid and the phase-out of green energy credits.
Johnson remains optimistic, saying, “We’re going to get it done by Independence Day. It’s going to be a great celebration.”
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