Tax bill has ‘a little bit of wiggle room’ for more priorities, House chairman says

The tax portion of House Republicans’ “one big beautiful bill” is estimated to cost $3.8 trillion, falling under the Ways and Means Committee’s ceiling for the package.

The exact amount of budget room leftover will depend on how much spending cuts Republicans achieve in other parts of the bill, but the committee should have at least $200 billion that could be used to pay for additional priorities. That could include a more generous federal deduction for state and local taxes, or SALT, that blue-state Republicans are demanding in exchange for their support.

“There’s a little bit of wiggle room there to try to deliver additional priorities, but it’s very small wiggle room within that instruction,” said House Ways and Means Chairman Jason Smith, Missouri Republican. “But we’ll get it done.”

Mr. Smith’s comments came at a brief press conference ahead of his panel’s markup of the tax bill that began Tuesday afternoon and is expected to stretch late into the night or the next day.

The committee’s product has won praise from Republicans because it makes President Trump’s first-term tax cuts permanent and delivers on his second-term pledges of no tax on tips and overtime income and provides breaks for seniors on Social Security.

But some Republicans remain opposed to the bill, including a handful of blue-state Republicans who want a more generous SALT deduction than the committee proposed.

The Ways and Means bill would triple the current $10,000 cap on the SALT deduction to $30,000 for most taxpayers, with reductions in the amount for anyone earning above $400,000.

A contingent of New York and California Republicans has said that’s not high enough to provide relief for their constituents who have faced disproportionate impacts from the SALT cap.

Mr. Smith said House Speaker Mike Johnson is leading negotiations with Republicans demanding a higher cap, among other issues different GOP factions have raised with the broader package as pieces have been unveiled and advanced in committees.

“There is going to be bumps along the road throughout this process, but we’re going to get it done and we’re going to get agreement,” Mr. Smith said.

The bill delivers on most of Mr. Trump’s tax priorities, but not his request to change the tax treatment of carried interest paid to partners in investment funds. Nor does the bill raise the top tax rate on the highest earners, an idea the president waffled over.

Mr. Smith said he met with Mr. Trump on Friday and walked him through the details of the tax bill, line by line.

“He was very happy with what we’re delivering because it’s delivering for working families, small businesses and farmers,” he said. “That is what this bill is all about.”

Democrats claim the GOP tax bill disproportionately helps the wealthy and spent the early part of the Ways and Means markup picking apart various provisions they dislike.

Rep. Steven Horsford, Nevada Democrat, said constituents in the rural part of his district with median incomes of $24,000 “are getting pennies while billionaires are getting gold bars.”

He took particular issue with an increase in the estate and gift tax exemption to $15 million, indexed to inflation, that will cost $211 billion over a decade.

Rep. John Larson, Connecticut Democrat, took issue with the limited scope of a $4,000 tax deduction for seniors age 65 and older that was intended to fulfill Mr. Trump’s promise that they won’t have to pay taxes on Social Security.

Thomas A. Barthold, chief of staff for the Joint Committee on Taxation, which provides nonpartisan analysis of tax legislation, said under the GOP proposal, about 24 million tax filers (counting joint returns as one) who have Social Security benefits counted as part of their income will still owe taxes.

“Essentially, this bill doesn’t do as President Trump promised to eliminate taxes on Social Security, because some seniors will receive no benefit or less than full benefits from the additional senior deduction from this bill,” Mr. Larson said.

Most income groups will see their taxes lowered under the bill, according to the JCT’s distributional analysis. However, taxpayers earning less than $15,000 will see their taxes increase 18.7% in 2027.

Mr. Barthold said that’s a consequence of taxpayers who will lose access to premium tax credits that are used to subsidize health care coverage. Illegal immigrants are already barred from receiving the credits, but the GOP would extend that ban to some immigrants with lawful statuses, like those granted asylum or here under parole, temporary protected status and deferred enforced departure.