Dem
47
GOP
53
You probably know that the Freedom Caucus can (and often does) blackmail the House speaker. One of the downsides of that is that it shows everyone else that blackmail works. Now, the few remaining moderate House Republicans have picked up the scent. There aren't a lot of them, but in a House that is temporarily 217-215, it takes only one moderate to sink a bill. It's tough work, but someone has to do it, and it appears that Rep. Mike Lawler (R-NY) has appointed himself to do the job.
Lawler's issue is the limit on the deduction for SALT (State And Local Taxes). Prior to Trump v1.0, federal taxpayers could deduct the full amount of money they paid to state and local governments under the theory that money should not be taxed twice. The 2017 tax cut bill limited that deduction to $10,000 for two reasons. First, it raised some money to pay for the tax cuts to millionaires and corporations. Second, it sent (most of) the bill to well-off people in blue states with high taxes. From Trump's point of view, taxing affluent highly educated suburban voters, who lean Democratic these days, to pay for his tax cuts for millionaires was delicious and irresistible.
The problem for him now is that some of those taxpayers have made it clear to their representatives that they want the cap lifted in the new tax bill, and woe be to any representative who votes for a bill that doesn't lift the cap. Lawler represents Rockland and Putnam counties, which have median household incomes of $104,000 and $83,000, respectively, well above the national average of $71,000. His constituents expect him to deliver. Same is true for other Republicans elsewhere in well-off districts in New York and California.
Trump is not going to give in to Lawler. First, lifting the cap will increase the deficit, which will cause the deficit hawks to swoop in and block the bill. Second, the President-elect just loves punishing his "enemies," and doing it financially to large numbers of them at once is too good to give up. Opposition to lifting the SALT cap from the deficit hawks is already clear. Rep. Chip Roy (R-TX) has said lifting the cap will make deficit reduction much harder and reducing the deficit is his priority.
But Lawler isn't going to give up and Trump needs his vote. Also, Lawler is thinking about running for governor in 2026 and getting the SALT cap lifted would be a huge boost for him. It will be a clash of two very determined people, with opposite agendas. Lawler knows very well that if Trump refuses to budge, he can vote against the bill and kill it. In that case, the 2017 law will expire and the SALT cap will vanish and we get the status quo ante. If that happens, Lawler's constituents will consider him a hero. This puts Trump in a bind: Refuse to lift the cap and be done in by Lawler and the moderates or get rid of it and be done in by Roy and the deficit hawks. This Republican vs. Republican warfare is not something Trump is used to and trying to blame it on the Democrats is not likely to impress the voters since Republicans have the trifecta.
Lawler and other SALTy Republicans met with Trump at Mar-a-Lago over the weekend to discuss matters. No deal was announced, but after the meeting Trump did tell House Republicans to come up with a fair number. This suggests that Trump is open to raising the $10K cutoff to some higher number but not to infinity. Finding a number acceptable to Lawler and the moderates and also to Roy and the conservatives could be quite a task since a lot of money is involved here. This topic may actually test Trump's claim that he is a great dealmaker. (V)