U.S. Vance President JD Vance and Speaker of the House Mike Johnson (R-LA) applaud as U.S. President Donald Trump addresses a joint session of Congress at the U.S. Capitol on March 04, 2025 in Washington, DC. (Photo by Andrew Harnik/Getty Images)

Rounak Jain·Stocktwits

Updated Jul 02, 2025 | 8:31 PM GMT-04

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House Speaker Mike Johnson on Wednesday revealed that an agreement has been reached with the SALT (state and local taxes) caucus on the deduction cap, paving the way for President Donald Trump’s tax bill to be presented in Congress.

In response to a question by CNN, Speaker Johnson said that the Republicans have come to an agreement to raise the deduction cap to $40,000 from $10,000 for a decade.

Trump’s tax bill initially proposed raising the deduction cap for individuals making $400,000 or less per year to $30,000.

“It’s not everything they wanted, but I think they know what a huge improvement that is for their constituents, and it gives them a lot to go home and talk about,” Johnson said.

Republican lawmakers in the SALT caucus had threatened to withhold support for Trump’s tax bill if it did not raise the deduction cap sufficiently.

“While I respect the President, I’m not budging on it,” Representative Mike Lawler (R-N.Y.) said on Tuesday, as Speaker Johnson’s deadline for a vote on the bill drew close and Trump’s negotiations ended in a stalemate.

Representative Nick LaLota (R-N.Y.) said he hoped the discussion would result in a number that the SALT caucus could actually say yes to.

It’s not clear yet if the SALT caucus is happy with the new deduction cap. A Bloomberg report stated that these lawmakers had not yet responded to a request for a comment on the matter.

However, House Freedom Caucus chair and GOP Representative of Maryland Andy Harris thinks the bill will fail to pass muster.

“As I’ve said all along, we may need a couple of weeks to iron everything out, but it’s not going anywhere today,” he told CNN.

Republicans have a 220-213 majority in Congress and a 53-47 majority in the Senate. The Congress vote is planned for this week.

Meanwhile, the SPDR S&P 500 ETF Trust (SPY), which tracks the S&P 500 index, was down 0.34% at the time of writing.

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