GOP moderates send warning shot to Johnson over tax deal

Moderate House Republicans sent a warning shot to Speaker Mike Johnson (R-La.) on Tuesday, coming close to blocking legislative action on the House floor in protest of the bipartisan, bicameral tax deal not including an increase in the state and local tax deduction (SALT).

Taking a page out of the playbook normally used by hard-line conservatives, four moderate New York Republicans — Reps. Anthony D’Esposito, Andrew Garbarino, Nick LaLota and Mike Lawler — initially joined Democrats in voting against a procedural rule for four unrelated pieces of legislation, enough opposition to sink the effort and shut down business on the floor.

The vote sent leadership into a scramble, prompting Johnson and House Majority Whip Tom Emmer (R-Minn.) to huddle with the four rabble-rousers and their allies.

After nearly 40 minutes, the four moderate New Yorkers switched their vote in support of the rule, allowing the procedural vote to squeak through, 216-210.

The lawmakers left the House floor saying that while there was not a commitment to adjust the tax legislation, there was an agreement to keep talking about possible paths forward to discuss their concerns.

”We’ve agreed only to talk, to either explore one of two mechanisms — either to put it in the overall big tax bill, or to have a stand-alone thing that goes in parallel to that big tax bill,” LaLota said, referring to increasing the SALT deduction.

Lawler told The Hill after the vote that the New York Republicans are “gonna continue the discussions today and onward.”

“For all of us in these districts, you know, that delivered the majority, this is the issue that matters, and we’re gonna keep fighting to get it done,” he added.

Votes on rules — which govern debate on legislation — are typically partisan and predictable, with the majority party voting in support and the minority party voting in opposition. Members of the House Freedom Caucus and their allies, however, have voted against rules several times this Congress to express their frustration with leadership.

On Tuesday, the moderates utilized one of the hard-line tactics. It was an escalation of the pushback that many of those members expressed on a call last week with a half-dozen members of the SALT Caucus and GOP leaders, which sources said included some yelling from LaLota, The Hill first reported last week.

The rule that the New Yorkers threatened to tank was unrelated to the tax bill but served as a means of protesting the legislation that House GOP leaders said might come up this week under a fast-track process that does not allow for additional amendments. That fast-track process, a suspension of the rules, demands a two-thirds majority for passage, requiring support from Democrats — but bypassing the need for a procedural rule and the threat of a small group of Republicans blocking the underlying legislation.

The Tax Relief for American Families and Workers Act, a bipartisan compromise struck between House Ways and Means Committee Chair Jason Smith (R-Mo.) and Senate Finance Committee Chair Ron Wyden (D-Ore.), would expand the child tax credit by increasing the maximum credit per child from $1,600 to $2,000 until the end of 2025, while also restoring business deductions for research development costs, interest payments and capital investments, among other provisions.

It advanced out of the Ways and Means Committee earlier this month in a resounding 40-3 vote, with all Republicans on the panel voting in favor.

Moderate Republicans — particularly those from wealthier states in the Northeast — are angry the bill does not increase the SALT credit. Moderates, especially ones from New York who helped Republicans clinch the majority in 2022, have long made SALT their main priority on Capitol Hill.

Some moderates are now aiming their fire at Smith for the lack of SALT provisions in the legislation.

“I’ve talked a lot about folks negotiating in good faith,” LaLota said Tuesday morning. “I don’t consider him one of them.”

GOP leaders have also gotten pushback from Republicans in the conservative wing over the expansion of the child tax credit. 

Smith presented the tax bill to Republicans in a GOP conference meeting Tuesday. And in an interview on CNBC earlier in the day, he said the bill has “pro-growth, pro-worker, pro-American tax policies that support families and small businesses and it sharpens our competitive edge with China, and it boosts innovation right here in the United States.”

Critics of the bill and the process of its creation, Smith said, are “just distractors.”

Johnson said in a press conference earlier Tuesday that the bill has some “great benefits” and praised Smith for his work putting it together.