The four letters that could sink the GOP’s megabill
By Michael Jones
Moments after the House Ways and Means Committee wrapped a 17-hour markup of its portion of the GOP megabill—legislation meant to enshrine President Trump’s second-term agenda—Chairman Jason Smith (R-Mo.) posted a photo of then-candidate Trump waving from a McDonald’s drive-thru window. Presumably, it was a corny attempt to own the libs.
But Rep. Mike Lawler (R-N.Y.), one of Smith’s GOP colleagues, didn’t find it amusing.
“You forgot to add SALT with those fries, Chairman,” Lawler replied on X. And no, he wasn’t talking about seasoning…
Lawler was referring to SALT—the acronym for the state and local tax deduction—one of the final sticking points Speaker Mike Johnson (R-La.) must resolve as he scrambles to pass the House version of the megabill by week’s end.
The SALT deduction allows filers to write off state and local taxes from their federal income tax bill—a benefit that has historically flowed to wealthy and upper-middle-class residents in high-tax blue states like New York, New Jersey, California, Connecticut, and Illinois. Capping the deduction at $10,000 was one of the most controversial provisions of the 2017 Trump tax law.
For the so-called SALT Caucus—mostly New York and California Republicans clinging to swing districts who are pro-SALT—lifting the cap is about their own political survival. They’re demanding changes to the megabill before they’ll vote for it, arguing their constituents shouldn’t be penalized for living in high-tax states that fund generous public services. Without a win to bring home, they risk losing their seats—and Republicans risk losing the House.
Democrats are seizing on the GOP drama. Both Senate Minority Leader Chuck Schumer and House Minority Leader Hakeem Jeffries represent high-tax New York and are hammering Republicans for proposing to raise taxes on their own voters to finance permanent tax cuts for the ultra-wealthy.
Schumer’s been at it since he led a failed effort to repeal the cap when Democrats controlled Congress in 2021. Jeffries, for his part, has made SALT a regular talking point, calling anything short of full repeal a tax hike on the middle class.
“These Republicans are all talk and no action,” Jeffries told me late last month. “They had an opportunity to make progress on lifting the state and local tax deduction cap in the last Congress, and they did nothing. So why should anyone believe it’s going to happen this time around when they keep breaking their promises on the economy?”
Back in 2017, Republicans used budget reconciliation to pass the law that capped the SALT deduction at $10,000, which meant they had to keep the bill’s 10-year deficit impact within strict limits. The SALT cap helped them generate an estimated $668 billion in revenue over a decade, money used to offset deep corporate and income tax cuts.
At the same time, many Republicans from low-tax red states viewed the SALT deduction as a federal subsidy for high-tax Democratic strongholds. By capping it, they believed they were ending an unfair benefit—and punishing what they perceived as blue-state “tax-and-spend” governance.
The current version of the GOP megabill would triple the SALT cap—but members of the so-called SALT Caucus, mostly New York and California Republicans representing Biden-won districts, say that’s not enough. Their demands for full repeal of the cap have drawn sharp pushback from MAGA-aligned members, who see the deduction as a favor to coastal elites.
Democrats, meanwhile, argue the cap unfairly penalizes states that invest in strong public services like schools, transit, and Medicaid. They say residents in these states are being taxed twice, once locally and again federally, without being able to deduct the first from the second.
Still, the numbers are what they are: while some middle-class households benefit from the SALT deduction, it has overwhelmingly helped the top 20 percent, especially upper-income homeowners in affluent suburbs. That’s why progressives within the Democratic Party remain divided over full repeal, which they argue would amount to a tax break for the rich.
But for Republicans from high-tax states, the SALT fight is a defining test of credibility. They campaigned on lifting the cap and now face intense pressure from constituents to deliver. Yet they’re operating inside a GOP majority that wants to extend the cap indefinitely. That leaves them boxed in—caught between a MAGA base that sees SALT as a perk for the wealthy and voters back home who see it as essential tax relief.
Even if Republicans cut a SALT deal, it might not be enough. Over the weekend, House conservatives pushed the megabill even further to the right, accelerating the timeline for Medicaid work requirements and demanding a full repeal of clean energy tax credits enacted in the Inflation Reduction Act.
That gives Schumer, Jeffries, and other SALT-aligned Democrats ample fodder to keep attacking—whether on national messaging or back home—regardless of how the SALT fight ends.
The conclusion is likely to be hashed out in the middle of the night—literally.The House Rules Committee, the powerful panel that sets the terms for floor debate on major legislation like the GOP megabill, isn’t scheduled to meet until 1 a.m. Wednesday morning.
Speaker Johnson says the timing ensures a vote before members head out for the weeklong Memorial Day recess.Democrats call BS. To them, the graveyard shift is just more proof that Republicans know how toxic the bill is, no matter what happens with SALT.
“If Donald Trump’s big, beautiful tax break for billionaires is so great, why not pass it in prime time? Why jam it through in the middle of the night? What don’t they want you to know?” Rep. Jim McGovern of Massachusetts, the top Democrat on Rules, said this morning. “They have such contempt for the American people.”
Michael Jones is an independent Capitol Hill correspondent and contributor for COURIER. He is the author of Once Upon a Hill, a newsletter about Congressional politics.
