President Donald Trump arrives for a House Republican meeting at the U.S. Capitol on May 20, 2025 in Washington, DC.
Tasos Katopodis | Getty Images News | Getty Images
President Donald Trump failed Tuesday to sway key House Republicans from blue states to drop opposition to a major tax bill, which they say does not do enough to boost so-called SALT deductions for their constituents, sources told CNBC.
Opposition to the bill from the “SALT Caucus” threatens to derail the legislation, which Trump and House Speaker Mike Johnson, R-La., hope to see passed before Memorial Day weekend.
Trump visited the GOP House caucus on Capitol Hill on Tuesday to push lawmakers to approve the bill quickly and directly called out the caucus, which is focused on the question of the tax deduction allowed for state and local taxes on federal income tax returns.
Voter unhappiness with a current cap on the deduction in some states could affect Republican chances of retaining control in the House of Representatives after the 2026 midterm elections.
A Republican tax bill in 2017 capped the SALT deduction at $10,000, in what was seen as a political slap at Democratic-leaning states in the Northeast and California, where residents often pay much more in state and local taxes than Republican-leaning “red” states.
A proposal in the current bill calls for the deduction to be raised to $30,000. But that is not enough for a handful of GOP lawmakers from those blue states.
Sources said that five members of the SALT Caucus” remain “no” votes on the current bill after Trump’s visit, and after Republican leadership proposed boosting the cap slightly more.
On Monday, GOP leaders offered a $40,000 cap on deductions, two sources said.
One source said that the cap would only apply to people earning $751,600 per year or less, and that the cap would remain in place for four years before eventually decreasing to $30,000 for people making $30,000 or less.
Trump, in his visit Tuesday, told the SALT Caucus, “Let it go,” NBC News reported.
The president was blunter to Rep. Mike Lawler, a New York Republican who is among the holdouts on the bill.
“I know your district better than you do,” Trump told Lawler, according to a tweet by Punchbowl News co-founder Jake Sherman.
“If you lose because of SALT, you were going to lose anyway,” Trump reportedly said to Lawler.
Sources confirmed the accuracy of Sherman’s account.
One SALT Caucus member, Rep. Young Kim, R-Calif., later posted a statement on X from her, Lawler, and fellow GOP Reps. Andrew Garbarino and Nick Lalota of New York, and Rep. Tom Kean Jr. of New Jersey.
“We share President Trump’s call for unity within the House Republican Conference,” the statement said.
“A fair SALT deduction is a matter of fundamental fairness for the hardworking families we represent, including the many who proudly support President Trump and voted for him, in part, because he promised to restore SALT.”
“We hope his remarks today motivate the Speaker to advance a SALT proposal that delivers meaningful relief for our middle-class constituents, as we have worked in good faith with House Leadership for more than a year,” the statement said. “Our states are donor states, consistently subsidizing so-called fiscally responsible red states.”
The last line of the statement referred to the net of taxes paid to the federal government from individual states compared to federal assistance and programs that benefit states.
Trump and Johnson’s efforts to get the tax bill passed have also been frustrated by conservatives who want to cut the federal budget deficit and cut more from the Medicaid health coverage program than the current iteration of the bill proposes.
Trump told the caucus on Tuesday, “Don’t f— around with Medicaid.”