Johnson closes in on SALT breakthrough with House GOP holdouts

House Speaker Mike Johnson is tantalizingly close to a deal with blue state Republicans on a SALT compromise, according to people familiar with the matter.Why it matters: Johnson is "not quite there yet," he told reporters, but sources say Johnson is close to solving one of the thorniest problems in the "big, beautiful bill."He held a 'productive meeting" with Republicans who are threatening to vote against the bill, according to a source familiar with the negotiations. "Discussions moving in the right direction," the source said. "We got into some details about different variables, different caps," Rep. Nick LaLota (R-N.Y.) told reporters. "Folks are talking about how long this lasts and all those variables and to see if there's a number that we could get to. And if we don't, I'm going to vote no on the bill, and the bill likely won't pass."The intrigue: Rep. Nicole Malliotakis (R-N.Y.), a Ways and Means committee member, was asked to leave the meeting, Axios confirmed. Members were upset with her signaling that she was fine with the $30,000 cap, according to a person familiar with the matter."All I know is they can sit and negotiate with themselves all they want, but there will be no changes unless I and the committee agree," she told reporters.Driving the news: Rep. Elise Stefanik (R-N.Y.) was instrumental in setting up the meeting with Johnson, which occurred in two acts, with a break for votes.She was joined by New York Reps. Mike Lawler, Nick LaLota and Andrew Garbarino, as well as New Jersey's Tom Kean and California's Young Kim.But tonight's positive momentum was a remarkable turnaround.Earlier in the day, tempers were flaring with Lawler questioning if House Ways and Means Chair Jason Smith (R-Mo.) would even have his "f**king gavel" if it weren't for the SALT caucus.Between the lines: Johnson will still have to "manage the other flank of this to make sure it's not a bridge too far," said another person familiar with the negotiations.Zoom out: Johnson still has dozens more problems to solve. He is facing a potential rebellion from conservatives (and moderates) over the $625 billion in savings the bill will wring from Medicaid.Four GOP senators — in addition to more than 20 House Republicans — are concerned about potential cuts to the Inflation Reduction Act clean-energy tax incentives.In total, the committee is looking at $515 billion in savings from energy-related tax provisions.By the numbers: The Joint Committee on Taxation (JCT) has calculated that the tax cuts considered by the Ways and Means Committee will cost some $3.8 trillion.The budget agreement passed in March allows Congress to authorize $4 trillion in tax cuts if it reduces spending by $1.5 trillion.JCT assumed the SALT cap would rise to $30,000 from its current $10,000, which sent a signal to SALT Republicans that they had approximately $200 billion in headspace.Trump's plan to exempt overtime pay from taxes will cost $124 billion over four years. Doing the same for tips will amount to $40 billion in less revenue.

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