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House Republicans late Wednesday unveiled changes to the massive bill carrying President Trump’s agenda, as they prepare for a floor vote on the measure early Thursday.
GOP leaders are hoping the changes, brokered over the last week, will be enough to get members who had raised concerns about the original version to vote for the bill.
One of the key additions is a further increase in the federal deduction on state and local taxes, known as SALT, that a group of Republicans from New York, New Jersey and California said was needed to earn their support.
The SALT deduction is prized by residents in high-tax states, dominated by Democrats, because they can recoup some of their money from the federal government. The deduction was created in 1913 when the federal income tax was established. The idea was to prevent double taxation.
As part of the 2017 Trump tax cuts, Republicans capped the SALT deduction at $10,000 to help pay for the broader tax breaks.
The original version of the bill would have tripled the cap to $30,000 for most taxpayers and added an income limit so the deduction is reduced further for anyone earning above $400,000. The blue-state Republicans said that did not go far enough.
The updated version would quadruple the existing cap to $40,000 for most taxpayers, with a $500,000 income limit before the amount is reduced.
Married couples filing separate returns would be subject to a cap of $20,000 each, with individual $250,000 income limits.
The caps and income limits increase by 1% annually over 10 years, a more cost-controlled effort to guard against inflation.
Conservatives also secured a few of their requests in the bill, although GOP leaders shot down some of the most significant changes hardliners in the House Freedom Caucus wanted on Medicaid and clean-energy tax credits.
Still, the update does include one of their demands, speeding up the implementation of work requirements for able-bodied adults on Medicaid from Jan. 1, 2029 to Dec. 31, 2026. It would also allow states to begin implementation sooner, if they choose.
It would also move up the phase-out schedules for various clean energy tax credits, although not as aggressively as Freedom Caucus members had sought.
Conservatives also secured changes deregulating firearm suppressors by removing them from the national registry and eliminating taxes on their production. The original bill only eliminated taxes on the transfer of silencers.
The update would ban Medicaid dollars for being used on gender-transition therapies or procedures for adults, in addition to the ban for minors included in the original version.
One of the most substantive additions is $12 billion added for the Homeland Security Department to provide grants to states for costs associated with enforcing federal immigration laws and supporting “federal border security missions” since the beginning of the Biden administration.
Texas has requested the federal government reimburse the state for $11 billion in costs spent on Operation Lone Star, which Gov. Greg Abbott launched because, he said, the Biden administration wasn’t taking enough action to secure the border.
In the section of the bill that raises federal employees’ contributions to their retirements, the update strikes a provision that would have based a retiree’s annuity payment on their average highest five earning years instead of highest three.
Some changes to the bill are more stylistic than substantive, like a renaming of a new savings account to encourage families to save for their children’s future expenses like higher education, job training and first-time home purchases.
The original bill called them “MAGA” (Money Accounts for Growth and Advancement) savings accounts, while the update makes the intention even more obvious, renaming them “Trump” accounts.
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