Trump gives blue-state Republicans ‘homework’ as GOP plots major conservative policy shift
GOP divided over raising SALT cap
Rep. Mike Lawler, R-NY, joins ‘Sunday Morning Futures’ to discuss Trump’s meeting with blue state Republicans over raising the SALT cap and congestion pricing in New York.
President-elect Donald Trump is giving Republicans his blessing to negotiate a key tax that could prove key to GOP talks on a major overhaul of conservative policies next year.
Trump met with several different groups House Republicans in Mar-a-Lago over the weekend, including blue-state Republican 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 primarily hit urban and suburban residents in areas with high income and property taxes, such as New York, New Jersey, and California.
“I think it was productive and successful,” Rep. Nicole Malliotakis, RN.Y., said of the meeting. “The president supports our efforts to increase the SALT deduction. He understands that mayors and governors in blue states are ripping off taxpayers and wants to secure relief from the federal level.”
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President-elect Donald Trump told New York Republicans he would work with them on a range of priorities (Chip Somodevilla/Getty Images)
But Trump also signaled that he was aware of opposition from others in the House GOP conference, particularly Republicans from rural districts, who viewed the SALT deductions as tax breaks for the wealthy. Before the cap was implemented in 2017, there were no limits on how much state income and local property taxes people could deduct from their income when filing federal returns.
“He gave us a little bit of homework to work on, a number that could give our middle class some relief from the high taxes that our governor and mayor have imposed, and at the same time, you know, something that can build consensus and achieve [a 218-vote majority]Malliotakis said.
“I think we know pretty well that it’s not going to be a complete repeal of the SALT cap. There’s no appetite in Congress, or even among American taxpayers, for tax cuts for the ultra-rich.
“Our efforts are really focused on middle-class families and that’s what we’re focused on in trying to get the right balance.”
The current SALT deduction cap was opposed New York and California lawmakers for most of its existence, since it was introduced in Trump’s Tax Cuts and Jobs Act (TCJA).
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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 recently as last September, when he announced on Truth Social that he would “get SALT back, cut your taxes and more.”
The discussions are part of broader talks by Republicans to enact sweeping fiscal and conservative policy reform through a process known as “reconciliation.”
By lowering the Senate’s threshold for passage to a simple majority instead of a two-thirds majority, the process allows the party that controls both houses of Congress and the White House to pass certain bills provided they address budget and other fiscal issues.
Some Republicans who favor the SALT deduction, such as Rep. Mike Lawler, R-N.Y., have signaled they may withhold support for 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 lift the cap on SALT, I wouldn’t support it,” Lawler told Fox News’ Sunday Morning Futures.
Lawler also said Trump agrees the SALT deduction caps need to be raised.
House Republicans have virtually no room for error with a very slim majority from Trump’s inauguration until probably sometime in April.
Rep. Mike Lawler said the SALT deduction limits are a “red line” for his support of the budget reconciliation bill (Tierney L. Cross)
Meanwhile, Trump also told New York Republicans that he would help them fight against their state the controversial congestion pricing rule which charges extra for driving in parts of Manhattan.
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“He understands how unfair it is and how it would affect the city’s economy and the people we represent, so we are currently working with him on legal options to reverse the seal of the Biden administration,” Malliotakis said. “If there’s a legal option, if there’s a legal option to stop congestion charging, he’s going to do it.”
“You have, you know, police officers, firefighters, nurses, restaurant workers who have to come in at odd hours, and they drive because they don’t feel the transportation system is clean or safe.”
Congestion pricing went into effect in New York earlier this month.
Fox News Digital has reached out to Trump’s transition team for comment on this weekend’s meeting.
