TODAY'S PAPER
Good Morning
Good Morning
NewsNation

Deal to raise cap on SALT deduction to $80,000 still faces hurdles

U.S. Sen. Chuck Schumer and Rep. Thomas Suozzi

U.S. Sen. Chuck Schumer and Rep. Thomas Suozzi announce their plan to restore the SALT tax deduction at a press conference in Lake Success on July 14, 2020. Credit: Raychel Brightman

WASHINGTON — SALT relief will remain in the massive Build Back Better Act after House Democrats reached a late-night deal, but the measure faces hurdles in the House and Senate and likely negotiations between the two chambers, lawmakers said Friday.

Rep. Tom Suozzi, of Glen Cove, and New Jersey Reps. Mikie Sherrill and Josh Gottheimer announced shortly before midnight Thursday the SALT deal with House Speaker Nancy Pelosi to raise the cap to $80,000 from its current $10,000 for the next nine years.

"This agreement to address the cap on our State and Local Tax (SALT) deduction will effectively eliminate the undue burden for nearly all of the families in our districts who’ve been unfairly double taxed for the last four years," the statement said.

On Friday, Pelosi pushed back the House vote on the Build Back Better Act until later this month at the request of some moderate Democrats to get official numbers of the bill’s cost.

On the House floor Thursday evening, Pelosi could be seen showing a piece of paper to and talking with Suozzi, Sherrill and Gottheimer, who then huddled among themselves on and off the floor before later settling on the deal.

House progressives are not taking a position against SALT relief, said Rep. Pramila Jayapal (D-Wash.), the House Progressive Caucus leader, though she said she prefers Sen. Bernie Sanders’ SALT relief proposal.

Sanders, the Vermont independent, said he opposes the higher SALT cap because it would give close to 40% of the benefits to wealthy homeowners. He has proposed lifting the cap only for homeowners making $400,000 or less a year.

The House proposal has a champion in the upper chamber: Senate Majority Leader Chuck Schumer (D-N.Y.). "Senator Schumer will fight hard to keep SALT relief in the Senate bill," his spokesman Angelo Roefaro told Newsday.

Proponents of the SALT relief said it is deficit neutral or raises revenue.

But the Committee for a Responsible Budget charged that "this tax cut would be offset on paper with a sleight of hand" and that it delivers "a huge tax cut to very high earners at a cost of nearly $300 billion over the first five years."

Rep. Andrew Garbarino (R-Bayport), who supports lifting the SALT cap, said House Democrats’ version SALT relief was "a good first step." But he also issued a statement blasting the Build Back Better Act as "bad for Long Island" and New York.

"I will be voting no," Garbarino said.

News Photos and Videos