President-elect Trump and Home Republicans in favor of elevating the state and native tax (SALT) deduction cap mentioned lifting the debt restrict in legislative autos apart from the “big, beautiful bill” of Trump’s coverage priorities throughout a gathering at Mar-a-Lago over the weekend, Rep. Nick LaLota (R-N.Y.) and three different sources instructed The Hill.
The dialog included discourse in regards to the alternative ways Congress may improve the debt restrict, together with by means of reconciliation — which Republicans may do on their very own — or common order, a course of that will require buy-in from Democrats, LaLota and two of the sources stated.
Trump didn’t say what his most well-liked technique was, one of many sources stated.
“We talked about different mechanisms,” LaLota, who was on the Saturday assembly, instructed The Hill on Sunday. “We did talk about different ways to resolve that challenge, reconciliation and regular order being among [them].”
“We were talking about where it should go,” one supply, who was on the assembly and requested anonymity to debate the delicate matter, stated of the debt restrict. “And so we were tossing around ideas.”
One other supply stated some lawmakers advised placing a debt restrict improve within the authorities funding invoice Congress should go by the March 14 shutdown deadline or tying it to catastrophe support for the California wildfires — a transfer that will dare Golden State Democrats to vote in opposition to the wanted help.
“Some people said put it in the first reconciliation bill, some people [said] put it in the second reconciliation bill, some said put it in the negotiated funding bill that’s gonna be in March. … There were thoughts about tying it to aid for [Los Angeles], with the fires, all sorts of stuff,” the supply stated.
Three of the sources famous that the dialogue in regards to the debt ceiling was a normal dialog, not finished in nice element, and a short a part of the assembly.
The mere point out of other methods, nevertheless, is important, since Speaker Mike Johnson (R-La.) final week stated it was his “intention” to extend the debt restrict by means of the reconciliation course of. It underscores the truth that the debt restrict portion of the reconciliation bundle is among the many most contentious provisions within the laws, as some conservatives have a observe report of opposing such efforts.
Trump didn’t weigh in on his most well-liked technique, one of many sources stated. One other supply stated Trump “wants it raised,” referring to the debt restrict, however doesn’t need it for use as a “political weapon.”
“The question is, what’s the best vehicle to get it done without it being used as a political weapon,” the supply stated. “Obviously, there’s a lot that goes into all of this, so his bottom line is he doesn’t want it used as a political weapon against him by the Democrats.”
Three of the sources stated Trump, throughout the dialog in regards to the debt restrict, expressed frustrations with the 2023 deal former Speaker Kevin McCarthy (R-Calif.) struck with President Biden to lift the borrowing restrict for 2 years — a sentiment he has beforehand expressed publicly.
“I think he’s just unhappy with the date that Kevin McCarthy chose, and then it fell in his lap,” one of many sources stated.
“He didn’t trash him; he was just very miffed about the date,” the opposite supply echoed.
The dialogue in regards to the debt restrict happened throughout Trump’s gathering with Republicans from New York, New Jersey and California who’re in favor of lifting the SALT deduction cap, a difficulty these lawmakers have pushed for years.
Throughout the assembly, Trump reiterated his want to handle the SALT deduction cap applied beneath the Tax Cuts and Jobs Act (TCJA), which he signed into regulation throughout his first time period. Whereas taxpayers used to have the ability to deduct what they paid in state taxes from their federal taxes, now the quantity is capped at $10,000, severely impacting these in states like New York, New Jersey and California.
The president-elect instructed members on the assembly that he didn’t know the SALT cap was such a difficulty till after the TCJA turned regulation, three sources instructed The Hill. Two sources stated he talked about former New York Gov. Andrew Cuomo (D).
“He said ‘nobody ever called me,'” one supply stated. “He goes, ‘Cuomo never called me, this person never called me and said what are you doing?'”
Lawmakers current on the assembly stated they left Mar-a-Lago with a dedication from Trump that he would work with them on addressing the SALT tax cap.
“He understands it completely. He agrees the cap on SALT needs to be lifted,” Rep. Mike Lawler (R-N.Y.), who was on the assembly, stated on Fox Information’s “Sunday Morning Futures.”
“There’s reason for all of us to negotiate in good faith. That’s why we went down to meet with President Trump. He understands this. And he said to us, ‘Look, I’m with you, come back with a number and let’s work through it,'” he added.
Whereas the SALT-focused Republicans see the openness to elevating the cap as excellent news, it’s the change within the debt restrict technique that may very well be most consequential for shifting Trump’s legislative agenda by means of Congress extra rapidly.
Trump has expressed anger that the debt restrict should be raised throughout the first 12 months of his new administration, and he doesn’t need Democrats to make use of the must-pass measure as a leverage level to extract concessions — as Republicans did in 2023 beneath McCarthy. Trump referred to as the timeline put in place by that deal “one of the dumbest political decisions made in years.”
Trump made a last-minute demand for Republicans to lift the debt ceiling in a December funding bundle however confronted pushback from GOP fiscal hawks who need substantial spending cuts as a situation of elevating the debt ceiling.
In gentle of that demand, Republicans struck a handshake settlement in December to lift the debt restrict by $1.5 trillion and implement $2.5 trillion in spending cuts as a part of the party-line invoice with which Republicans are planning to handle Trump’s priorities just like the border, taxes, power coverage and extra.
The Trump agenda invoice will advance by means of Congress utilizing the particular price range reconciliation course of, which can be utilized solely a few times every year, however bypasses the specter of a Democratic filibuster — and thus, Democrats wouldn’t be capable of use it as leverage whether it is within the reconciliation invoice.
However getting all of the Republican fiscal hawks within the tiny Home GOP majority on board with the debt restrict improve plan — by making sufficient cuts in order that even the members who’ve by no means voted to lift the debt ceiling vote sure — may severely complicate the invoice.
It’s unclear, although, how Republicans may pursue an alternate technique whereas additionally nullifying the danger of Democrats utilizing the debt restrict as a leverage level.
The conflicting priorities of various ideological factions of the Home GOP had been aired to Trump in his many conferences with completely different teams of lawmakers this weekend at Mar-a-Lago.
A Saturday afternoon assembly included members from blue states like New York, New Jersey and California, the place many members have made elevating the SALT deduction cap their foremost precedence.
Reps. Younger Kim (R-Calif.) and Andrew Garbarino (R-N.Y.), SALT Caucus co-chairs, stated in a press release that the assembly was “productive.”
“Our constituents are burdened by the SALT cap, and President Trump committed to addressing this issue for our districts,” Kim and Garbarino stated. “We had a productive meeting tonight and will keep fighting to resolve this critical issue so our constituents can keep more of their hard-earned money.”
Noticeably absent from the assembly of blue-state lawmakers, although, was Rep. David Valadao (R-Calif.) — one among two Home Republicans left in Congress who voted to question Trump after the Jan. 6, 2021, assault on the Capitol.
Members of the Freedom Caucus joined Trump at Mar-a-Lago on Friday night. Among the many attendees was Rep. Chip Roy (R-Texas), in opposition to whom Trump in December had referred to as for a major problem over his opposition to Trump’s push to lift the debt ceiling.
Billionaire Elon Musk, who Trump has named as a co-head of the forthcoming “Department of Government Efficiency” (DOGE), was additionally current on the Friday evening Freedom Caucus dinner.
“Great night at Mar-a-Lago with the House Freedom Caucus. We joined President Trump and Elon Musk for dinner to talk about the path forward,” Rep. Eli Crane (R-Ariz.) wrote on the social platform X with a photograph of the group.
And the chairs of Home GOP standing committees met with Trump on Saturday night.
