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'No SALT no deal': Democrats vow to block Build Back Better bill without tax break

Reuters
Reuters
 2022-01-21
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Jan 21 (Reuters) - Several U.S. House members from President Joe Biden's Democratic Party are threatening to block a renewed push for his Build Back Better spending bill if it does not include the expansion of a federal deduction for taxes paid to states and local entities.

Expanding the deduction, known as SALT for State and Local Taxes, has been a demand of lawmakers in higher-tax states such as California, New Jersey and New York, especially in suburbs where Democrats seek to retain control in Nov. 8 elections.

"We support the president’s agenda, and if there are any efforts that include a change in the tax code, then a SALT fix must be part of it. No SALT, no deal," members Tom Suozzi of New York and Mikie Sherrill and Josh Gottheimer, both of New Jersey, said in a joint statement late on Thursday.

The SALT deduction, part of the U.S. income tax code from its inception more than a century ago, was restricted to $10,000 in a 2017 Republican tax law.

The cap disproportionately affects homeowners in higher home-value states that lean toward the Democratic Party, like New Jersey, where the average homeowner pays roughly $9,000 in local property taxes.

Asked about the House lawmakers' demand, a Biden White House official said: "We are in touch with a wide range of lawmakers regarding the president’s economic growth plan for the middle class, and weighed in about SALT late last year, but we won’t negotiate in public."

The "SALT caucus" has more than 30 members in the House of Representatives who want to expand the deduction, including some Republicans, congressional aides say.

Their demand adds to the challenges the White House faces as it tries to salvage some of Biden's $1.7 trillion spending package and push it through with slim congressional majorities.

As the White House tries to downsize that bill, it may need to jettison hundreds of billions of dollars in social programs, but preserve SALT, a tax deduction that some in the party call a giveaway to the rich.

House Speaker Nancy Pelosi can only afford three defections because Democrats narrowly control a majority in the 435-member House.

The House passed a version of Biden’s social-spending bill that increased the cap to $80,000, despite objections from some progressives that it largely benefits higher-income households. The bill died in the 100-member Senate for lack of majority Democratic support.

Reporting by Jarrett Renshaw; Editing by Heather Timmons and Howard Goller

Our Standards: The Thomson Reuters Trust Principles.

Comments / 356

Jason Lowery
01-21

You gotta love how the democrats claim to care about the poor and the working class and yet all they seem to care about right now is making sure that the wealthy in their States don't have to pay as much in taxes

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Tee Gee
01-21

Blue states run by Dumbocrats keep raising taxes and running their states into the ground but want the rest of the country’s taxpayers to pick up the tab. California now wants to go to single payer healthcare that would cover all illegal aliens parasites. To try to pay for it state taxes would have to be increased massively. If SALT is restored, California passes along the cost of paying for illegal aliens’ healthcare to everyone else. None of these insane tax and spend states should be allowed to penalize the rest of the country’s taxpayers.

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Richard Beck
01-21

there are more rich Democrats than there are Republicans. Dems want you to think they care about the poor but the policies they implement end up hurting them.

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