No deal.......

No deal on key tax deduction after late-night talks

Blue-state Republicans plan to continue negotiating with Speaker Mike Johnson on the fate of the state and local tax deduction.

By Benjamin Guggenheim, Meredith Lee Hill and Mia McCarthy

A group of blue-state Republicans left a huddle with Speaker Mike Johnson late Monday night feeling uncertain if they could clinch a final deal with GOP leaders over a key tax in the coming hours.

Speaker Mike Johnson said negotiators are not quite there yet.

“We are continuing to work on it. It’s not a final resolution yet, but I think we’re getting very close,” Johnson said leaving the meeting Monday night.

However, Johnson demurred when asked about timing for a floor vote, which he’s wanted Wednesday, only saying “before Memorial Day.”

One offer discussed included a $40,000 SALT cap with an income limit that steeply tapered off within several years. That was not what SALT Republicans had expected, and some privately bristled at the latest presentation from the speaker.

“Not serious,” said one person with direct knowledge of the talks.

SALT Republicans have also wanted the White House to get more involved in the fight, to little avail. The distaste from some members risks the larger megabill talks dragging on for at least several more days.

Rep. Andrew Garbarino (R-N.Y) leaving the huddle called it a “productive meeting” but said SALT Republicans had asked for more budget estimates on the matter, which they expect to get in the morning.

Garbarino also acknowledged Johnson has to deal with fiscal hardliners who deeply oppose a SALT cap increase.

“I think the speaker is doing everything he can to try to get us to yes,” Garbarino said.

The fight over the state and local tax deduction has been a major challenge for House Republican leadership, which is hoping to advance the GOP’s sweeping domestic policy package as early as Wednesday.

New York Republicans have complained that the SALT proposal included in the tax portion of the bill is insufficient. That policy would lift the $10,000 cap to $30,000 and subject the higher deduction to a new income restriction on taxpayers making more than $400,000.

More recently, House Republicans have discussed a $40,000 SALT cap, doubled to $80,000 for married couples.

The group that met with Johnson Monday night consisted of New York Republicans Mike Lawler, Elise Stefanik, Nick LaLota, Nick Langworthy and Andrew Garbarino, as well as New Jersey Rep. Tom Kean and California Rep. Young Kim.

House GOP leadership must also overcome objections from deficit hawks, who want to further roll back clean energy credit and make further deep spending cuts in the party-line bill.

President Donald Trump is set to attend the House GOP conference meeting at 8:30 on Tuesday morning to convince hold-outs to back the bill.