GOP moderates issue a caution to Johnson regarding the tax agreement

Speaker Mike Johnson (R-La.) received a warning from moderate House Republicans on Tuesday when they nearly prevented legislative movement on the House floor in protest of the bipartisan, bicameral tax agreement that did not include an increase in the state and local tax deduction (SALT).

Reps. Anthony D’Esposito, Andrew Garbarino, Nick LaLota, and Mike Lawler, four moderate New York Republicans, took a cue from hard-line conservatives and initially voted with Democrats against a procedural rule for four unrelated pieces of legislation. This opposition was strong enough to sink the effort and end floor debate.

Following the vote, which threw the leadership into disarray, Johnson and House Majority Whip Tom Emmer (R-Minn.) met with the four rabble-rousers and their supporters.

The four moderate New Yorkers changed their vote in favour of the rule after over forty minutes, which helped the procedural vote narrowly pass, 216-210.

GOP moderates issue a caution to Johnson regarding the tax agreement

The members departed the House floor declaring that, despite the lack of a commitment to modify the tax legislation, they had reached an understanding to continue discussing potential future directions to address their concerns.

Regarding raising the SALT deduction, LaLota stated, “We’ve agreed only to talk, to either explore one of two mechanisms — either to put it in the overall big tax bill, or to have a stand-alone thing that goes in parallel to that big tax bill.”

Following the decision, Lawler stated to The Hill that the New York Republicans plan to “continue the discussions today and going forward.”

“This is the issue that matters to all of us in these districts that delivered the majority, and we’re going to keep fighting to get it done,” he continued.

Rules votes, which control the discourse on proposed laws, are usually predictable and politicized, with the minority party voting against and the dominant party voting in favour. Nonetheless, in order to vent their dissatisfaction with the leadership, members of the House Freedom Caucus and their allies have often voted against the rules during this Congress.

The moderates employed a hard-line strategy on Tuesday. It was a continuation of the resistance that many of those members voiced on a conference call with GOP leaders and six SALT Caucus members last week. According to sources, there was some yelling from LaLota during the call, as The Hill first reported last week.

The New Yorkers’ threat to overturn the regulation was a protest against legislation that may be considered this week under a fast-track procedure that forbids further amendments, rather than anything to do with the tax measure. Democratic support is necessary for the fast-track process, which suspends the rules and requires a two-thirds majority to pass. This avoids the requirement for a procedural rule and the possibility that a small number of Republicans would reject the underlying legislation.

The bipartisan Tax Relief for American Families and Workers Act, which was negotiated by Senate Finance Committee Chair Ron Wyden (D-Ore.) and House Ways and Means Committee Chair Jason Smith (R-Mo.), would restore business deductions for capital investments, interest payments, and research and development costs, among other provisions, and expand the child tax credit by raising the maximum credit per child from $1,600 to $2,000 until the end of 2025.

With every Republican on the Ways and Means Committee voting in favour, it easily passed out of the committee earlier this month, 40-3.

Republicans who lean moderately, especially those from the affluent areas of the Northeast, are upset that the package does not raise the SALT credit. On Capitol Hill, moderates—particularly those from New York, who were instrumental in Republicans gaining the majority in 2022—have long prioritized SALT.

Now, some moderates are blaming Smith for the legislation’s absence of SALT provisions.

Tuesday morning, LaLota remarked, “I’ve talked a lot about folks negotiating in good faith.” “He’s not one of them, in my opinion.”

Conservative Republicans have also pushed hard against GOP leaders’ plans to increase the child tax credit.

Republicans were shown the tax package by Smith on Tuesday during a GOP conference meeting. He also stated that the plan contains “pro-growth, pro-worker, pro-American tax policies that support families and small businesses and it sharpens our competitive edge with China, and it boosts innovation right here in the United States” in an interview that aired on CNBC earlier in the day.

Smith claimed that those who oppose the measure and the way it was drafted are “just distractions.”

Earlier on Tuesday, Johnson acknowledged the bill’s “great benefits” and commended Smith for his efforts in bringing it together during a press conference.

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