Blue-state Democrats demand SALT relief in Biden's next big bill

Four House Democrats – Suozzi and New Jersey Reps. Mikie Sherrill, Josh Gottheimer and Bill Pascrell – have gone public so far and have insisted on the reinstatement of SALT in the upcoming package. Privately, however, several other lawmakers are in talks about the effort and plan to officially join in the coming days, according to several members and advisors. And right now, Spokeswoman Nancy Pelosi and her leadership team can only afford to lose three Democratic votes as she prepares to develop a Biden infrastructure package that, despite the bipartisan potential of the problem, may not find GOP support.

Sherrill was positive about the group’s prospects for prevailing, even though they described the SALT deduction as a must in any infrastructure business paid for by withdrawing portions of the 2017 GOP tax cuts.

“Any changes to the disastrous Republican tax laws of 2017 must address the SALT deduction cap,” Sherrill said in a statement. “I have worked to get rid of the SALT cap since my first day in office and I am confident that it will.” We will be able to find common ground with the Biden administration. “

Biden had many warnings that some Democratic lawmakers would reverse Trump’s changes to the SALT deduction. 11 Democrats on the Ways and Means Committee sent a letter to the president late last month demanding the addition of the deduction to the upcoming infrastructure package. The 11 said they had decided not to bring the matter up earlier to avoid compromising Biden’s Covid Relief Act, but now it is time to respond to a “critically important tax priority.”

“We were ready to postpone discussions on this issue for a moment,” wrote the group in the previously unreported letter POLITICO had received. “However, given the gravity of this problem for our constituents, we must ask you to immediately enter into a dialogue with you about including SALT aid in the upcoming infrastructure package.”

The urge to revisit SALT – when Biden unveils his billion-dollar infrastructure proposal on Wednesday – comes with a high price: $ 88.7 billion for 2021 alone and far more for a permanent lifting of the cap set by former President Donald Trump had and imposed Republicans four years ago. Some liberal groups have spoken out against lifting or changing the deduction, stating that a return to indefinite depreciation on SALT would primarily benefit wealthier families.

But the ordinary Democrats speaking out this week are not alone calling for a return to the earlier SALT withdrawal. The GOP cap, imposed under a tax bill passed with zero Democratic votes, sparked loud complaints from Blue State Democrats of all ideological beliefs, especially in areas with the highest real estate values. The restoration of the SALT withdrawal has historically been supported by moderate frontliners such as Rep. Tom Malinowski in New Jersey, as well as high-ranking progressives such as representatives Rosa DeLauro from Connecticut and Jackie Speier from California.

It’s too early to know how many House Democrats would be willing to oppose any future tax infrastructure package that would conflict with their own president. Still, the four who have announced their positions make a remarkable coalition of Democrats poised to set an early marker for Biden’s next major agenda item after nearly every party member behind the $ 1.9 trillion coronavirus response law of the President has stayed behind.

The call for increased state and local tax breaks highlights the tightrope Democrats must walk in building their next package – which will likely pay for new roads, bridges, and other employment programs with complex tax increases and other revenues. Raiser – while trying to keep the party together on the floor.

Senate Majority Leader Chuck Schumer himself has vigorously voiced his calls for the unlimited SALT withdrawal to be restored, once saying that it would be “one of the first things i will do”If he is elected to his current leadership position. But Schumer did not specify how he will handle the problem in the infrastructure package.

“When it comes to taxes that affect families, my line is in the sand SALT,” said Gottheimer in an interview. “And I think others share that view.”

The House Democrats have tried several times to reverse the GOP’s withdrawal limit since recapturing the majority. The House passed a stand-alone law to temporarily lift the cap in late 2019 and again under the massive Democratic Coronavirus Ease Act in Spring 2020. Both attempts were rejected by the GOP-controlled Senate, although some of their own members were present in favor of the change.

Despite backlash from Liberals, who view the withdrawal as primarily helpful to wealthier taxpayers, Democrats from higher-taxed states argue that it is also a bourgeois problem. Some of the most prominent progressives in Congress have previously supported the lifting of the SALT cap, including Rep. Katie Porter of California and Rashida Tlaib of Michigan.

“There are some members who feel very strongly about it,” Pramila Jayapal (D-Wash.), Chairwoman of the Progressive Caucus Chairperson of Congress, told reporters on Tuesday when questioned on the matter. Still, she added, “I’m not sure our members will see this as one of the fundamental reforms to the tax system that would make the system fairer.”

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