President Donald Trump expressed optimism that lawmakers could reach a compromise on the state and local tax deduction — a sticking point in his "One Big Beautiful Bill" — even as a key SALT advocate insisted a deal had already been reached.
Trump said Wednesday that resolving the contentious debate over the SALT cap is imperative to passing his multitrillion dollar tax bill.
"It's very difficult, and I understand both sides, but we'll just have to see, hopefully a compromise or something's going to be made," Trump told reporters at the White House.
New York Representative Mike Lawler — one of the House's most vocal supporters of the SALT deduction — said earlier Wednesday he is open to negotiating with the Senate to advance the tax bill, but insisted he would not agree to lower the $40,000 SALT cap deal reached in the House.
"We negotiated," Lawler said Wednesday in an interview with Fox Business of the House version of the bill. "That's the deal."
The SALT deduction has been a primary sticking point holding up Trump's legislative agenda. Lawler, one of a handful of Republicans representing districts in high tax states, previously called the Senate version of the tax bill "dead on arrival" because of its $10,000 cap on SALT.
Senate leaders have characterized that figure as a placeholder while negotiations have continued, but have also said there is no desire among Republicans in their chamber to keep the cap at $40,000. GOP Senators are considering a $30,000 cap on SALT as a compromise between the $10,000 currently allowed and the more generous limit in the House tax bill.
White House Chief of Staff Susie Wiles is scheduled to meet with Senate Republicans on Wednesday to discuss the tax bill, according to a person familiar with the planning. Vice President JD Vance met with senators on Tuesday to urge them to support the legislation.
The House and Senate have to agree on a plan before it can go to Trump's desk to become law, giving Lawler and his SALT-focused colleagues leverage to demand their concerns be addressed.
Trump warned that making SALT a "red line" would mean a tax increase. The bill renews many of his first-term tax cuts on households and small businesses, which are set to expire at the end of the year.
Instead of agreeing that the SALT cap could be lowered, Lawler listed off costly items in the bill, including the child tax credit and cutting taxes on tips and overtime, that could be negotiated.
"We're not giving you the full boat," Lawler said. "I have negotiated in good faith from day one, and I am still willing to work with my colleagues to get this done, but we are not going to be fleeced in New York."
There are other variables that could be negotiated besides the cap amount, including the length of time it is in place and the phaseout for higher income taxpayers.
Senate Democratic Leader Chuck Schumer criticized Republican colleagues in the chamber for seeking to minimize the SALT deduction, calling that move "a dagger aimed at the heart of blue states."
