Capitol Hill Recap: Hold The SALT

Jay Heflin
February 8, 2024

Key Takeaways

  • A quick vote on SALT-cap modifications was on tap this week in the House, but it didn’t happen.
  • Senate vote on House-passed tax bill could be weeks away.

House lawmakers this week planned to vote on legislation that would amend the SALT-cap, but ballots were never cast.

What Went Down:

  • A quick vote on SALT-cap modifications was on tap this week in the House, but it didn’t happen.
  • Senate vote on House-passed tax bill could be weeks away.

Let’s Get To It:

Hold the SALT:

On the heels of the House Rules Committee approving legislation last week that modifies the SALT-cap, the expectation was that the full House would vote on the measure this week.

That didn’t happen.

The original plan was for the full House to vote on the measure Tuesday. The vote was expected to be on the “rule” for the bill, which instructs how the chamber will debate and possibly amend the bill. That vote did not occur and there has yet to be an announcement for when ballots will be cast.

Normally, when a chamber vote on legislation is pulled from the floor schedule it means that the measure lacks sufficient support to pass. Given the amount of grousing about this bill by lawmakers from both political parties, support for it could be lacking.

The current prediction is that the House will vote on the “rule” next week, but there is no official announcement about this.

The legislation increases the SALT-cap to $20,000 for joint filers earning less than $500,000. The increase would apply to 2023.

Legislative outlook: House passage of the bill seems to be in doubt. However, if the bill were to pass the chamber, passage from the Senate is also expected not to occur. This means the bill is unlikely to become law.

That being said, lawmakers sometimes talk smack about legislation then wind up supporting it. In other words, the terminal diagnosis for upping the SALT-cap bill could be premature.  Stay tuned.

Senate Waiting Room:

The House-passed “Tax Relief for American Families and Workers Act” has found itself in the Senate’s waiting room.

House lawmakers approved the tax bill last week. Its top provisions include:

  • R&D expensing for domestic costs
  • Expand the 163(j)-interest deduction from EBIT to EBITDA
  • Up Bonus Depreciation to 100%
  • Increase section 179 expensing
  • Increase the information reporting threshold for certain payments
  • Enlarge the Child Tax Credit
  • Modify the Employee Retention Credit

Passage from the House was overwhelmingly bipartisan with a 357-70 vote. It was also roundly supported when it advanced from the House Ways and Means Committee by a 40-3 vote.

If action in the House is any indication for what will occur in the Senate, then the bill should pass the upper chamber.

However, some Senators have urged changes for the bill. Some would like to see modifications to the Child Tax Credit while others want to strike from the legislation the language pertaining Employee Retention Tax Credit.

Many of the Senators who are calling for the bill to be amended want it to be “marked up” in the Senate Finance Committee. It is not clear if the markup will occur. Members could also amend the bill during its debate on the Senate floor,. However, floor action on the bill is also unclear.

What is clear is that the Senate will not move quickly on this bill.

The Senate is currently embroiled in debate over the border. Certain Senators also seek to provide relief to war-torn countries like Ukraine and Israel. These issues have taken precedent over passing tax legislation.

The calendar is also a problem when it comes to Senate passage of the House-passed tax bill.

Senators will soon head for the exits. The chamber is scheduled to be in recess for the next two weeks and return on February 26th. Upon their return, they face two, big deadlines (March 1st and March 8th) to fund the Federal government and stave-off a partial shutdown.   

Legislative outlook for tax bill: Unclear.

The Senate is not expected to act on the tax bill this week. Once they return from recess, they could approve the House-passed bill relatively quickly by attaching it to one of the aforementioned bills. Senators could also pass it as a stand-alone bill, but that process could be time-consuming.

There is also the outstanding question about whether the bill gets vetted by the Senate’s tax-writing committee or amended on the chamber floor – or both.

If the Senate amends the tax bill, then the House must approve those changes before it can be enacted into law. (FWIW: Barring any unforeseen circumstances, President Biden is expected to sign the bill into law if given the opportunity.)

The process for the House approving Senate changes to a bill could be time-consuming, especially if House lawmakers don’t support the modifications. There is an expression on Capitol Hill for this situation: ping pong. It describes legislation bouncing between the chambers because the bill continues to be amended and not approved.

This bill was originally expected to be enacted into law by the start of this year’s tax season, which began on January 29th. Amending the bill would further postpone it from becoming law. There will likely be pressure to not amend the bill in the Senate -- but passage may hinge on it being amended. 

Pardon if this recap missed a monumental moment, but we can recap it next time!

 Adios amigos!

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About the Author(s)

Jay Heflin Photo

Jay Heflin

Director of Legislative Affairs
Jay brings more than two decades of experience to his job as Director of Tax Legislative Affairs in Eide Bailly’s Washington D.C. office. Jay provides political intelligence and guidance to the firm on the progress of tax legislation on Capitol Hill. Prior to joining the firm, he was a director at the tax lobbying shop Federal Policy Group, LLC, where he tracked tax legislation in Congress and participated in lobbying efforts to amend tax legislation. Before joining the Federal Policy Group, he was a Congressional reporter for several news organizations where his beat was tax policy.