Congressional Republicans are still plotting out the strategy and details of the budget reconciliation bill they want to use to pass major portions of President-elect Donald Trump’s agenda. Trump met with various factions of House Republicans at his Mar-a-Lago resort this weekend, where he reportedly learned that his party is not at all settled on the “one big, beautiful bill” approach to the legislation that he and House Speaker Mike Johnson prefer.
House Freedom Caucus members reportedly told Trump they would rather pursue the two-bill path favored by key senators, which would package border and energy measures in one early bill while leaving tax cuts for later.
Adding SALT: Trump also met with a contingent of Republicans from New York, New Jersey and California who are pressing for an increase in the $10,000 cap on the deductibility of state and local taxes (SALT) — a cap introduced by Republicans’ own 2017 tax law to help offset the revenue lost due to their tax cuts. Some of those who met with Trump said he was amenable to the idea. “The president certainly wants to increase the deduction for SALT to provide more relief, because he knows that our mayors and governors are crushing taxpayers,” New York Rep. Nicole Malliotakis told Politico after the meeting. “He wants us to work on what would be a fair number.”
That new number may fall in the range between $20,000 and $60,000, according to Roll Call’s Caitlin Reilly.
“Any increase, whether it’s going to be doubling it, or tripling it, or quadrupling it, is a win. But, you know, we’d like to see it a little more than doubled,” Malliotakis told reporters.
Trump’s directive may help create consensus on the issue, but many Republicans — particularly those from red states — still oppose the idea of lifting the cap. Budget watchdogs also dislike raising the limit, since it reduces revenue and primarily benefits high-earning taxpayers.
“There’s also fractious politics within the SALT caucus itself, which has had difficulties in the past agreeing on the appropriate ‘ask,’” Politico’s Benjamin Guggenheim and Meredith Lee Hill noted. “Privately, House GOP leaders have told some Republicans that without a way forward on SALT, they can’t properly plan for just how big the final package will be and how much they’ll need to cut spending to pay for it.”
Debt limit and disaster aid: Johnson had wanted to address the debt limit as part of the larger reconciliation package. That may not happen. But as Republicans game out how they want to deal with the debt ceiling, Johnson confirmed to reporters Monday that they are considering tying it to disaster aid for the Los Angeles wildfires. The idea was reportedly discussed during Trump’s meeting this weekend.
Republicans may also want to attach other conditions to the California aid. “There can’t be a blank check on this,” Sen. John Barrasso of Wyoming, the No. 2 Republican in the Senate, told CBS’s “Face the Nation” on Sunday. “I expect that there will be strings attached to money that is ultimately approved, and it has to do with being ready the next time, because this was a gross failure this time.”
Johnson also told reporters that he believes there should be conditions on the aid, and that failures by state and local leaders should be factored into the decision.
Democrats are sure to push back. “C'mon. We aren't idiots,” Democratic Sen. Chris Murphy said in a social media post responding to Barrasso’s comments. “Republicans never ask for 'strings' attached to disaster funding for Republican states. This isn't about helping California. This is about punishing California because it votes for Democrats.”
What’s next: The House Ways and Means Committee has a hearing scheduled for tomorrow morning on “The Need to Make Permanent the Trump Tax Cuts for Working Families.”