Bessent Predicts Republicans Reach SALT Truce Within 48 Hours

(Bloomberg) -- Treasury Secretary Scott Bessent said House and Senate Republicans can cut a deal on the state and local tax deduction within the next two days, resolving one of the key issues that has stymied President Donald Trump’s economic legislation.

“Both sides are working through and I think that we’ll have a solution to that in the next 24-48 hours,” Bessent told reporters on Capitol Hill on Tuesday.

The state and local tax, or SALT, deduction has vexed Republicans for weeks. A contingent of House lawmakers from high-tax states cut a deal in their chamber’s version of the bill to increase the SALT cap to $40,000 from the $10,000 in current law. The Senate’s proposal kept the deduction at $10,000 while lawmakers continue negotiations.

Senator Markwayne Mullin, a Republican from Oklahoma, is running point on the SALT negotiations, talking with House members from New York, New Jersey and California who have threatened to block the bill unless it includes a $40,000 SALT cap.

Mullin said on Tuesday that Senate Republicans are coming around to the $40,000 SALT cap, but that the $500,000 income threshold for the deduction is still being negotiated.

Not everybody is going to be happy with what ultimately makes it into the bill, he said.

“I don’t think we’ll ever get to a deal,” Mullin said. “We’ll get to a spot to where we’re going to have to put something in it and people are going to have to make the decision if it’s worth voting against.”

Representative Mike Lawler, a New York Republican, said he isn’t budging from the House deal, adding “that’s what ultimately is going to be in the final package.”

Bessent met with Senate Republicans on Tuesday to urge them to unite to pass Trump’s tax package by a self-imposed July 4 deadline. He said he thinks senators can begin the multi-day voting process on the bill by Friday. The House will then have to vote on the legislation before it can go to Trump’s desk for his signature next week.

--With assistance from Erik Wasson and Maeve Sheehey.

More stories like this are available on bloomberg.com

©2025 Bloomberg L.P.