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Some House Democrats threaten to revolt against a Manchin-approved spending plan if a tax cut for the rich isn’t included

Democratic Rep. Josh Gottheimer of New Jersey outside the Capitol on October 21, 2021.

Bill Clark/CQ-Roll Call, Inc via Getty Images

  • Rep. Josh Gottheimer is leading a group of Democrats who want to include a tax cut in any spending deal.
  • But Manchin doesn’t seem inclined to bring back a tax break for high-income residents of high-tax states and cities.
  • It poses a new obstacle for any spending plan that Dems want to revive by August.

Some House Democrats are threatening to oppose a possible spending deal that revives pieces of President Joe Biden’s agenda if it doesn’t restore a tax cut that largely benefits the wealthy. 

The nascent imbroglio deals with the rollback of a $10,000 cap on state and local taxes that taxpayers are able to deduct from their federal bill, known as SALT. Taxpayers used to have unlimited deductions before the new cap was established in the 2017 Republican tax law. 

The House-approved Build Back Better bill that later died in the Senate raised the deduction limit to $80,000, a measure with outsized benefits to richer taxpayers. As negotiations to revive a slimmer spending bill with Sen. Joe Manchin of West Virginia appear to gain steam, some House Democrats want to ensure that it’s included.

“As I’ve consistently said, If there are any changes to the tax code that affect families in my district, then restoring SALT must be part of it. No SALT, no dice,” Rep. Josh Gottheimer of New Jersey said in a statement first reported by Punchbowl News.

Rep. Tom Suozzi of New York, another House Democrat, backed up Gottheimer and said: “No SALT, no deal.”

A spokesperson for Speaker Nancy Pelosi didn’t immediately return a request for comment.

Behind the scenes, negotiations are ongoing to revive a $1 trillion bill that devotes half of its spending to deficit reduction. That leaves roughly $500 billion for Democrats to set aside for clean energy tax credits and potentially extending enhanced Affordable Care Act subsidies poised to expire at the end of the year. Both represent major priorities for the party going into the November midterms.

It appears unlikely that Manchin will agree to address SALT in the spending deal. He’s long been uneasy with the provision, and he has said his chief priority is stepping up taxes on the wealthiest Americans rather than hand them a sizable tax cut. The conservative Democrat told reporters in February he believed the measure was “too expensive” to include in a scaled-down bill.

Gottheimer spearheaded another revolt last year aimed at severing the link between an infrastructure bill and the larger social spending and climate bill that Democratic leaders wanted to pass at the same time. The New Jersey Democrat reiterated earlier this year that he wanted to include SALT in any revived Democratic bill.

Axios reported on Monday that he is reaching out to other centrist House Democrats to gauge their support for a separate bill that doesn’t include any tax increases. Pelosi can only afford to lose three votes since Democrats hold only a slender majority in the House.

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