Moderates who rebelled against GOP leaders notch win in advancing SALT bill

New York Republicans who staged a floor rebellion earlier this week got a win Thursday when a House panel advanced a State and Local Tax (SALT) deduction bill in a last-minute hearing.

The House Rules Committee reported out a rule to allow for consideration of Rep. Mike Lawler’s (R-N.Y.) SALT Marriage Penalty Elimination Act in an 8-5 vote, teeing up the bill for consideration on the House floor. 

The emergency hearing to consider the legislation was called less than 12 hours before it started and followed days of negotiations between GOP leaders and Empire State rebels who had threatened to hold up floor action on Tuesday out of anger that a SALT deduction increase — a top priority for many blue-state Republicans after a $10,000 cap was set in the Trump-era Tax Cuts and Jobs Act — was not included in a bipartisan tax bill. 

The other tax bill, which paired an expansion of the child tax credit with business tax deductions, passed in a resounding bipartisan vote on Wednesday.

Lawler’s SALT bill has limited applicability. It would increase the SALT deduction from $10,000 to $20,000 for 2023 for married couples filing jointly whose taxable income is less than $500,000.

“This is a pro-family measure that rights a wrong, and this is ultimately about fairness,” Lawler said in the hearing, thanking Speaker Mike Johnson (R-La.) for “his help in addressing this issue.”

But the rule advanced with some dissent from hard-line conservatives on the Rules panel concerned with process and regular order. They brought up that the bipartisan tax bill that passed on Wednesday went through a fast-track suspension of the rules process that bypassed the House Rules Committee and did not allow for any amendments. 

“I’m disappointed in where we’re at, really,” Rep. Thomas Massie (R-Ky.) said. “We should have allowed Mr. Lawler an amendment on that.”

But Massie and Rep. Chip Roy (R-Texas) were skeptical that quickly moving Lawler’s bill was an appropriate response.

“I do not think this is regular order in any way shape or form, because I literally have no idea the impact of this legislation as I sit here and look at it,” Roy said. “It didn’t go through committee … I don’t have the [Congressional Budget Office] score.”

Massie voted to advance the legislation despite his process concerns, while Roy was the lone Republican to vote against it.

Together, Roy, Massie, and Rep. Ralph Norman (R-S.C.) — three hard-line conservatives who were appointed to the Rules panel by former Speaker Kevin McCarthy (R-Calif.) as a result of process concessions during the January 2023 Speaker race — could band together to block any legislation that they think did not meet the standards of regular order. But Norman indicated he did not see a problem in advancing Lawler’s bill.

“To offer this small tax advantage that’s going to expire in ‘25 anyway, I will do that all day long,” said Rep. Ralph Norman (R-S.C.) “I unabashedly support this.”

Still, Rules Committee ranking member Jim McGovern (D-Mass.) criticized Lawler for the bill coming to the committee before a hearing in the Ways and Means panel, asked when it is expected for a floor vote, and asked if he has gotten any assurances that the procedural rule can pass with Republican support — let alone the bill itself.

“Is this just an exercise in pretend to just give some members to be able to give some members some video to put in a campaign ad to say that they’re fighting for their constituents?” McGovern said. “Which by the way, you can’t do. You’re not supposed to do that.”

The answers to most of McGovern’s questions were not immediately clear. Many Republicans oppose the SALT deduction, seeing it as incentivizing high taxes in Democratic-run states.

A source who was part of negotiations to bring up the bill this week acknowledged that the procedural rule vote, typically a party-line vote, was not assured. But the source hoped that the SALT bill being limited to married couples would get buy-in from pro-family conservatives. Republicans have just a two-vote cushion on any party line measure, assuming full attendance.

In a move that might entice some support for the rule from conservatives, the procedural measures reported out on Thursday would also allow for consideration of a resolution condemning the Biden administration’s energy policies.