Trump Tells House Republicans To Find A 'fair Number' On Salt

New York Republicans came out of a Mar-a-Lago meeting with Donald Trump on Saturday confident that the incoming president is on board with increasing a key deduction for state and local taxes. And they have marching orders from Trump: Go back to Congress and negotiate a “fair number.”

“The president certainly wants to increase the deduction for SALT to provide more relief, because he knows that our mayors and governors are crushing taxpayers,” said Rep. Nicole Malliotakis (R-N.Y.) in an interview after the meeting. “He wants us to work on what would be a fair number.”

The deduction, known as SALT, has been a constant headache for lawmakers of both parties who represent states with high property taxes, such as New York, California and New Jersey. Republicans' 2017 tax law put a $10,000 cap on the deduction, amounting to a tax increase for many voters, and both Democratic and GOP members from those states have been pushing for a fix ever since. While the lawmakers didn’t come to an agreement on specific policy proposal that would go in a huge, party-line bill that would tackle taxes, energy and the border, momentum towards consensus on the SALT deduction is a big step forward for Republicans on passing their party’s priorities.

Yet the push still must navigate complex politics, simply because many GOP members from low-tax red states detest the deduction as they look to cut spending. There’s also fractious politics within the SALT caucus itself, which has had difficulties in the past agreeing on the appropriate “ask.” Privately, House GOP leaders have told some Republicans that without a way forward on SALT, they can't properly plan for just how big the final package will be and how much they'll need to cut spending to pay for it.

The debate on SALT was hashed over in a meeting between 16 members from New York, California and New Jersey, as well as Trump and two members of his staff, according to Rep. Nick Lalota (R-N.Y.), who said in a brief interview that he came away “very optimistic” that Republicans would “find a fix on SALT.” Many members who spoke with POLITICO after the meeting — where lawmakers munched on coconut shrimp, pigs in a blanket and sliders in a meeting that lasted over an hour — shared the same sentiment. They spoke about congestion pricing recently implemented in New York and the wildfires raging in California, though SALT was the main topic.

“I think it’s great because the president can take this back and continue negotiations with our side, with the Senate side, and figure out what we can get done," Rep. Claudia Tenney (R-N.Y.) said, affirming that Trump "wants us to find a number for him.”

“[Trump] said, look, come back with a number,” echoed Rep. Michael Lawler (R-N.Y.). “This is all negotiation to build consensus, so that’s obviously what our job is as members of Congress, and that’s what we’re going to do.”

And Trump seemed favorable to “indexing” the $10,000 cap on the so-called SALT deduction, so that the deduction can keep up with inflation, Malliotakis said.

“I’m confident that with his help, we will broker a deal, a good tax bill, that will help Long Islanders, New Yorkers and Americans," LaLota said.

House Republicans at the Saturday evening meeting posed for photos with Trump as he rallied members around him and his agenda. The message of unity and praise for Trump's leadership was also front and center at a lavish dinner Trump hosted for Freedom Caucus members Friday night at his resort.

But all the talk of unity at Mar-a-Lago this weekend only went so far. Trump did not invite Rep. David Valadao (R-Calif.), one of the 10 House Republicans who voted to impeach Trump after the Jan. 6 Capitol insurrection, to the meeting of California, New York and New Jersey GOP members. Despite the cold shoulder this weekend, Valadao will be a major player in the reconciliation talks as a centrist Republican, head of one of the main GOP caucus factions and a senior appropriator.

SALT Republicans are also pushing to ensure that more stringent rules around an alternative minimum tax, which would further erode the value of the SALT deduction, does not come back as it is scheduled to in 2026.

Malliotakis said that she suggested potentially limiting the property tax part of the deduction to bring the cost of the tax relief down.

“What is the most relief we can get for our constituents that would be palatable to the other members of our conference so that we can get to the 218?” Malliotakis said. “If we’re focusing on the middle class and ensuring that they’re the ones getting the relief, then we can come up with a number that would be fair.”