SALT Continues to Be The 'Big Sticking Point' Says Garrett Watson

House lawmakers debated President Donald Trump's tax cuts throughout the night, racing to meet a self-imposed deadline to approve the legislation by Thursday.

Republicans are expected to release a revised version of the bill, which includes compromises on the state and local tax deduction and spending cuts, but the draft had yet to be made public.

The tax package serves as the centerpiece of Trump's economic agenda, renewing his 2017 tax cuts and creating new tax benefits, including eliminating taxes on tips and overtime pay.

Garrett Watson Director of Policy Analysis at the Tax Foundation joins to discuss the future of the tax bill.

The White House amped up the pressure on Republicans on Wednesday urging lawmakers to quickly approve President Donald Trump’s signature tax bill, adding that a failure to do so would be the “ultimate betrayal.”

“The House of Representatives should immediately pass this bill to show the American people that they are serious about ‘promises made, promises kept.’ President Trump is committed to keeping his promises,” the White House’s Office of Management and Budget wrote in a memo endorsing the legislation.

Republicans made some headway in advancing Trump’s bill on Wednesday. House Speaker Mike Johnson announced that he had an agreement with lawmakers from high-tax states to increase the limit on the state and local tax deduction to $40,000, winning over a key faction of members who had threatened to block the legislation.

“The members of the SALT caucus negotiated yesterday in good faith,” Representative Mike Lawler, a New York Republican, told Bloomberg Television Wednesday. “We settled on something that we believe in, we support.”

However, several hardline Republicans said House GOP leaders aren’t honoring concessions the White House promised them and are threatening to tank the bill.

The White House says they never made a deal, instead presenting some of the conservative holdouts with a menu of policy options that the Trump administration can live with, a White House official said.

The White House made clear to conservatives they would have to persuade their moderate colleagues to sign onto those ideas, the official said, a challenging feat given Republicans’ narrow and fractious House majority.

Trump and Johnson plan to meet with some of the ultraconservative lawmakers at the White House at 3 p.m., a person familiar with the plans said. That meeting will be an opportunity to strike a deal, the Trump official said.

Ultraconservative Representative Andy Harris of Maryland cast the conversations with the White House as a “midnight deal” for deeper cuts in Medicaid and faster elimination of Biden-era clean energy tax breaks.

“I’m sorry, but that’s a pay grade above the speaker,” Harris said.

Harris said the bill doesn’t reflect that agreement and hardliners will block the package if it comes to a vote. Representative Ralph Norman, an ultraconservative from South Carolina, said the bill “doesn’t have the votes. It’s not even close.”

Freedom Caucus members said they aren’t moving the goal posts by asking for more spending cuts than the budget outline they already voted for. They said they want to rearrange the spending cuts to focus on ending “abuse” in Medicaid and immediately ending green energy tax breaks.

House Republicans leaders are also planning to accelerate new Medicaid work requirements to December 2026 from 2029 in a bid to satisfy ultraconservatives, according to a lawmaker familiar with the discussions.

How deeply to cut safety-net programs such as food assistance and Medicaid health coverage for the poor and disabled has been a sticking point in reaching agreement on Trump’s tax bill, as Johnson attempts to navigate a narrow and fractious majority.

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