Tensions are rising inside the Republican Party as the Senate Finance Committee unveiled substantial changes to President Donald Trump’s flagship “one big, beautiful” tax bill. The latest version slashes the state and local tax (SALT) deduction cap from $40,000 to $10,000 and restores green energy tax credits — igniting fierce opposition from both the House SALT Caucus and the conservative House Freedom Caucus.
The House SALT Caucus, primarily composed of Republican representatives from high-tax blue states, had previously negotiated a $40,000 SALT cap with Speaker Mike Johnson and the White House. That agreement secured their support for the House version of the bill. But the Senate’s decision to slash the cap back to $10,000 threatens to unravel that fragile coalition.
SALT Caucus co-chairs, Reps. Andrew Garbarino (NY) and Young Kim (CA), released a joint statement warning the Senate to honor the original deal. “It not only upholds President Trump’s commitment to raise the SALT cap,” they argued, “but has been praised by middle-class families, firefighters, law enforcement, small business owners, and hardworking Americans.”
Representative Mike Lawler (NY) bluntly declared the Senate bill “dead on arrival” and pledged to vote no if the $10,000 cap remains. Fellow New Yorker Rep. Nick LaLota warned the Senate it “doesn’t have the votes” in the House and highlighted that failing to reach a deal could result in the full expiration of the Trump-era Tax Cuts and Jobs Act (TCJA), reverting SALT deductions to unlimited levels.
I, along with my fellow SALT Caucus members, are actively engaging with Senators, House Leadership, and the White House and am confident the deal as previously negotiated will be in the final bill that is signed into law. https://t.co/LZovYoFs7O pic.twitter.com/scC1jj4oXe
— Congressman Mike Lawler (@RepMikeLawler) June 16, 2025
The opposition is not limited to blue-state Republicans. Members of the conservative House Freedom Caucus are also voicing strong objections — this time over green energy subsidies.
The original House bill proposed stripping Biden-era tax credits for solar and wind power. But the Senate version walked that back, including language to expand those credits. That move provoked backlash from fiscal conservatives like Rep. Chip Roy (TX), who posted flatly, “Yeah, I will not vote for this.”
Roy and others, including Reps. Eric Burlison (MO) and Keith Self (TX), called the Senate proposal fiscally irresponsible. Self emphasized the urgency, stating, “The U.S. is $36 trillion in debt… the time to act is now.” His warning echoes growing concern among conservatives about the sustainability of federal spending and the long-term economic implications of ballooning deficits.
Caught between competing factions of the Republican Party, Speaker Mike Johnson now faces a significant challenge. He must reconcile demands from coastal moderates defending their districts’ economic interests with calls from the right to dismantle green subsidies and rein in federal spending.
Senate Majority Leader John Thune acknowledged the looming impasse, calling the $10,000 cap a starting marker and committing to further negotiation. “We understand that it’s a negotiation… we’re prepared to have discussions.”
However, with key factions already threatening to tank the bill, compromise may prove elusive.