Topline

All but two House Democrats from New York on Tuesday told House leadership they may oppose an infrastructure and tax bill that doesn’t include a repeal of the cap on the State and Local Tax Deduction – which disproportionately affects states like New York with high state and local tax rates.

Key Facts

In a letter to House Speaker Nancy Pelosi and Majority Leader Steny Hoyer, the 17 lawmakers said they “reserve the right to oppose any tax legislation” that doesn’t include SALT restoration.

The list includes a number of powerful Democrats, including Small Business Committee Chair Nydia Velasquez and House Democratic Caucus Chair Hakeem Jeffries, while Alexandria Ocasio-Cortez, who voted against repealing the cap in 2019 and Kathleen Rice, who co-sponsored the 2019 bill, did not sign.

Rep. Tom Suozzi (D-N.Y.) and seven other lawmakers – six from New Jersey and one from Minnesota – have previously vowed to oppose any infrastructure legislation put forth by the administration that doesn’t repeal SALT.

But White House press secretary Jen Psaki earlier this month said SALT restoration is “not a revenue raiser” and that Democrats proposing it should also “propose a way to pay for it.”

Pelosi has said she is “sympathetic” to the positions of Democrats pushing for SALT restoration, while Senate Majority Leader Chuck Schumer is a vocal proponent, but neither have said whether it will find its way into the infrastructure package.

Key Background

The SALT deduction, which data shows mainly benefits wealthier residents of high-tax states, was capped at $10,000 as part of the GOP’s tax cut bill in 2017. Democrats – and some blue state Republicans, like Reps. Young Kim (R-Calif.), Andrew Garbarino (R-N.Y.) and Chris Smith (R-N.J.) – have since been working to pass standalone bills to repeal the cap, which disproportionately afflicts blue states.

Big Number

6. That will be the size of Democrats’ House majority after Rep-elect Julia Letlow (R-La.) is sworn in on Wednesday. That means Democrats can only afford to lose two votes on a given piece of legislation for it to pass.

Surprising Fact

Several of the signers are staunch progressives, including newly elected Reps. Jamaal Bowman (D-N.Y.) and Mondaire Jones (D-N.Y.). However, both represent the New York City suburbs, which have been hit particularly hard by the cap. Jones in particular made SALT cap repeal a central issue in his campaign.

Chief Critic

“I don’t think there’s going to be much if any sentiment among Senate Republicans for undoing the 2017 tax bill,” Senate Minority Leader Mitch McConnell said at a press conference on Tuesday. McConnell has previously said no Republicans will support Biden’s bill, which also proposes reversing the 2017 bill’s corporate tax cut.

Tangent

Despite Biden supporting repeal during the campaign, the White House believes the cap is “good policy” and likely won’t include its repeal in the bill, according to Axios. However, the outlet also reported Biden wouldn’t necessarily reject an infrastructure bill that includes SALT restoration if Congress adds it in later.