Negotiations over the future of the fraught state and local tax deduction are looking more and more like a game of chicken.
Senators want to lower the House’s $40,000 cap on the SALT deduction.
“We’re going to find, I think, hopefully, someplace right in the middle that both sides can live with,” Sen. Markwayne Mullin, who has been the main liaison between the upper chamber and the House members on SALT, told reporters this week.
But House Republicans from blue states say there’s no middle left to find.
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“SALT hasn’t changed for me at all. The deal that was negotiated in the House is the deal,” New York GOP Rep. Mike Lawler told NOTUS on Tuesday when asked where he sees negotiations going next.
The process is increasingly becoming a question of who will cave first.
On Wednesday, the SALT Caucus, the group of blue-state House Republicans that has organized as a negotiating bloc on the provision, is reportedly headed to the Treasury Department to meet with Secretary Scott Bessent, Punchbowl first reported.
The meeting comes as the group threatens to tank the final bill over the Senate’s $10,000 number.
“I’ve been very clear about that, if the deal changes and it’s not what we supported, I’ll be a ‘no,’” Lawler told reporters. He also said he’s “not concerned” about a primary challenge over tanking the bill.
“The Senate needs to back off the House’s SALT deal,” New York Rep. Nick LaLota said in a post on Tuesday.
Meanwhile, some senators are debating possible changes, such as bumping the deduction back up while making the income threshold for qualifying for the cap more strict.
The mixed messages from each chamber have prompted questions about how much truth there is to Mullin’s optimism — or to the firmness of the House Republicans’ red line.
The Oklahoma senator assured reporters that the SALT Caucus members are “being pretty cool” about negotiations.
New York GOP Rep. Nicole Malliotakis suggested to reporters on Tuesday that she’s open to some change on the income cap that goes along with the SALT deduction, as long as it’s within a $400,000 to $500,000 range.
Other SALT Caucus members were quick to decry that openness. Lawler told NOTUS that Malliotakis has not been part of the core group negotiating for the higher cap, and that he doesn’t want any departures from the $500,000 income limit proposed in the House deal.
And ultimately, Malliotakis also suggested she won’t cave despite her flexibility.
“They need to stick as close to the numbers that came out of the House bill … so there is a little bit of flexibility, at least for me, but other members may be different,” she told reporters, adding that “playing games with SALT risks the entire package.”
Yet as Congress’ self-imposed July 4 deadline for getting the reconciliation package to President Donald Trump’s desk draws closer, so does the reality that Mullin’s promise of a softer deal and the SALT Caucus’ promise of $40,000 can’t coexist.
On a Tuesday appearance on “Fox & Friends,” House Speaker Mike Johnson painted the SALT Caucus’ deal as key to keeping a Republican majority in the House in 2026, calling the Senate’s moves “playing with fire.”
“We’ve got to get our Republicans in the swing districts in California, New York, New Jersey and elsewhere reelected, and this is key to that,” Johnson said on the show. “I’ve tried to explain to [senators] that this is not a game.”
Senate Majority Leader John Thune said the opposite at a press conference Tuesday.
“You have to recognize that this is a process whereby everybody doesn’t get everything they want,” he said.
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Shifra Dayak is a NOTUS reporter and an Allbritton Journalism Institute fellow. Ursula Perano, a reporter at NOTUS contributed to this report.
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