SALT deduction

There were last-minute changes on modifying the SALT deduction and a provision allowing Medicare to negotiate drug prices.

Congressional Democrats floated fresh proposals on how to increase the federal deduction on state and local taxes, but House and Senate lawmakers were at odds over whether the very rich should be allowed to take the tax break.

Democrats have found new urgency to pass the roughly $1.75 trillion tax and spending plan as well as an infrastructure bill with $550 billion in new spending after being stung by a Republican sweep of statewide races in Virginia.

The move would help offset the benefits from a proposed expansion of the federal deduction of state and local taxes.

An adverse court ruling leaves wealthy states with fewer options.

The outline of the tax and spending bill provided a breakthrough after a long standoff between moderate senators and progressive Democrats.

Influential lawmakers still want various tax provisions in the bill.

The spending package could still include a measure to expand or temporarily remove the cap on the deduction on state and local taxes.

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Democrats risk settling for a less generous expansion of the state and local tax deduction than previously hoped after President Joe Biden conceded that lawmakers will have to scale back his economic agenda to get it enacted.