President Donald Trump’s personal visit to Capitol Hill on Tuesday failed to resolve a growing Republican rift over the state and local tax (SALT) deduction, leaving his signature “One Big Beautiful Bill” at risk of stalling in the House.
A bloc of five GOP lawmakers from high-tax blue states—nicknamed the “SALT Caucus”—continues to oppose the bill, arguing that its proposed SALT relief falls far short of what their constituents need. The legislation, central to Trump’s domestic agenda, includes sweeping tax cuts and Medicaid reforms, but the internal dispute over SALT has emerged as a critical obstacle just days before a self-imposed Memorial Day deadline for passage.
SALT standoff persists despite Trump’s pressure
The 2017 Tax Cuts and Jobs Act, signed during Trump’s first term, capped the SALT deduction at US$10,000—a move widely seen as targeting residents of Democrat-led states like New York, New Jersey, and California. The current bill proposes lifting the cap to US$30,000 for individuals earning up to US$400,000 annually, but SALT Caucus members say that’s still inadequate.
Rep. Mike Lawler (R-N.Y.), one of the most vocal critics, said, “I’m not going to sacrifice my constituents and throw them under the bus in a bad faith negotiation.” Trump, in the closed-door GOP meeting, reportedly told Lawler, “If you lose because of SALT, you were going to lose anyway,” adding, “I know your district better than you do.”
Leadership has floated a possible compromise: a temporary US$40,000 cap that would sunset after four years and revert to US$30,000 for lower earners. But the offer failed to sway Lawler or his colleagues. Rep. Nick LaLota (R-N.Y.) remarked, “We need a little more SALT on the table to get to yes.”
GOP faces pressure from both flanks
The bill also faces opposition from fiscal conservatives in the House Freedom Caucus, who are pushing for deeper spending cuts, particularly in Medicaid. Trump reportedly warned them bluntly: “Don’t f— around with Medicaid.” While the bill introduces new work requirements and phases in changes starting in 2027, Trump has insisted publicly that the plan does not touch “anything meaningful,” framing the reforms as targeting “waste, fraud, and abuse.”
Despite Trump’s efforts to unify the party, some Republicans remain unconvinced. “We’re still a long ways away,” said Freedom Caucus Chair Andy Harris (R-Md.). “The president, I don’t think, convinced enough people that the bill is adequate the way it is.”
Rep. Thomas Massie (R-Ky.), a persistent critic of deficit spending, remains a “hard no,” while warning that the legislation would cement “Biden levels of spending.” Trump dismissed Massie as a “grandstander” who “doesn’t understand government.”
What’s in the SALT proposal?
The bill’s SALT provision is formally set out in Section 112018 of the legislative text. It proposes:
- Raising the SALT cap to US$30,000 for individuals earning up to US$400,000, beginning in 2025.
- Introducing a US$40,000 cap as a possible compromise, with a scheduled reduction after four years.
- Maintaining restrictions for higher earners and rejecting proposals for full uncapping or parity with pre-2017 levels.
Trump and Speaker Mike Johnson have attempted to sell this as a middle-ground solution that balances relief with fiscal responsibility. However, the SALT Caucus had earlier advocated for a US$62,000 cap for individuals and US$124,000 for couples—figures far exceeding the current proposal.
Complicating matters further, the bill includes separate provisions impacting business SALT deductions, particularly for service-based firms such as medical and legal practices. These changes have drawn criticism from groups like the American Dental Association, who warn they could lead to disproportionate tax hikes on small professional firms.
Medicaid reforms trigger second fault line
The bill’s Medicaid provisions also threaten to peel off moderate support. While Trump has insisted the changes are modest, the Congressional Budget Office estimates millions could lose coverage over the next decade due to new eligibility requirements. Some Republicans, particularly those from vulnerable districts, are wary of political blowback.
Rep. Don Bacon (R-Neb.), a swing-district Republican, expressed tentative support after the Trump meeting, saying he was “a lean yes” but emphasised the importance of not cutting state Medicaid funding.
Clock ticking for Johnson
Speaker Johnson remains publicly optimistic, declaring the bill as the GOP’s “best chance” to reshape federal tax and spending priorities. But with only a slim House majority and multiple factions still in revolt, passage is far from assured.
“We’re on the verge of making history,” Johnson said after the meeting. Yet the proposed floor vote, tentatively set for Wednesday night, could slip unless consensus is reached quickly on SALT and Medicaid.
Trump, for his part, downplayed the divisions, calling the closed-door meeting a “meeting of love” and brushing off suggestions of internal frustration. But as Rep. Rick Crawford (R-Ark.) put it, “Everybody’s, you know, ‘rah rah,’ and then everybody walks out of the room. We’ll see.”
