Speaker Mike Johnson (R-La.) and Treasury Secretary Scott Bessent said negotiations over the state and local tax (SALT) deduction cap are “very, very close,” a positive sign for Republicans as they race to put the finishing touches on their sprawling tax cuts and spending package.
Johnson and Bessent met with GOP senators during their lunch on Friday to pitch them on the framework they agreed to with a handful of moderate House Republicans from high-tax blue states. Sen. Kevin Cramer (R-N.D.), who was at the gathering, said the proposal would make the SALT deduction cap $40,000 for five years, then $10,000 for the following five years.
Emerging from the huddle, both Johnson and Bessent said talks were nearing the end.
“I believe they will,” Johnson said when asked if Senate Republicans would accept the SALT plan. “They’re gonna digest the final calculations but I think we’re very, very close to closing that issue out.”
Bessent echoed that sentiment, saying negotiations were “very, very close” and noting that the reception among Senate GOP members to the proposal was “varied.”
The SALT deduction cap has been one of the thorniest hangups stalling progress on the GOP’s “big, beautiful bill,” which leaders are trying to send to President Trump by their self-imposed July 4 deadline.
The House’s version of the bill included a $40,000 deduction cap — quadruple the $10,000 cap in current law — for individuals making $500,000 or less. The Senate’s edition of the legislation, however, proposed a $10,000 cap, sparking howls among House Republicans.
Many Senate Republicans have wanted to chop down the House’s deduction cap, threshold and phaseouts to increase savings, especially as none of them are from high-tax blue states.
News surfaced of a potential SALT breakthrough Friday morning, with sources telling The Hill that the administration and key members of the SALT Caucus were zeroing in on an agreement.
Not all lawmakers in the SALT Caucus, however, are on board. Rep. Nick LaLota (R-N.Y.), who has been one of the most vocal in the group, told reporters earlier on Friday that he “heard of a deal” involving a $40,000 cap for five years and then a $10,000 cap for the following five years, which was a non-started for him.
“I’m a hard no on that,” he said of the blueprint, saying the proposal “just affirms the very thing I’ve been against for so long.”
