Ultraconservative Republicans Threaten to Block Trump’s Tax Bill Despite SALT Deduction Increase

House Republican ultraconservatives are pushing back against President Donald Trump’s major tax and spending bill, threatening to block the legislation even after a recent agreement to increase the state and local tax (SALT) deduction limit eased a key roadblock.

On Wednesday, House Speaker Mike Johnson announced an agreement to raise the SALT deduction cap from $10,000 to $40,000. This change aimed to satisfy lawmakers representing high-tax states such as New York, New Jersey, and California, who had previously withheld support over the SALT issue.

However, several conservative hardliners argue that the bill does not meet prior promises made by the Trump administration, particularly regarding deeper Medicaid cuts and the rapid elimination of Biden-era clean energy tax credits. Representative Andy Harris of Maryland criticized the bill as falling short of a so-called “midnight deal” and warned that the package lacks enough support among the Freedom Caucus members to pass.

Representative Ralph Norman of South Carolina also voiced concerns, saying the bill “doesn’t have the votes” and that the conservative faction intends to block the package unless their demands are met. The Freedom Caucus is pushing for rearranging spending cuts to focus more heavily on Medicaid reforms and immediately ending green energy tax incentives, rather than accepting the current draft.

Medicaid Work Requirements and Political Tensions

In an effort to appease the ultraconservatives, House GOP leaders are reportedly planning to accelerate Medicaid work requirements, moving the compliance deadline from 2029 to December 2026. This accelerated timeline is expected to face significant political backlash, especially as the midterm elections approach.

Many Republicans from swing districts worry that these stricter Medicaid rules will alienate moderate voters by reducing healthcare benefits for low-income families and disabled individuals. The proposal also faces strong opposition from Democrats and is likely to spark intense debate in the Senate.

Healthcare policy experts caution that the accelerated implementation timeline is unrealistic. Matt Salo, a consultant who advises healthcare organizations, warned that states would struggle to enact the work requirements on such a compressed schedule, potentially causing eligible recipients to lose coverage.

SALT Deduction Details and Republican Divisions

The proposed $40,000 SALT deduction cap would phase out for taxpayers earning over $500,000 per year, increasing by 1% annually over the next decade. This is a significant increase compared to the current $10,000 cap introduced in Trump’s 2017 tax reform, which had angered lawmakers from high-tax states.

Despite the SALT agreement, several Republicans remain cautious. Representative Mike Lawler of New York said negotiations are ongoing, with some “finer points” still being resolved. Lawmakers from high-tax states, including Elise Stefanik and Tom Kean, have threatened to reject any bill that does not sufficiently raise the SALT cap.

Upcoming Vote on Trump’s Tax Bill Faces Uncertainty

House Speaker Mike Johnson has indicated that the tax and spending package might be brought to a vote soon, possibly as early as Wednesday. However, key ultraconservative Republicans remain unconvinced, warning that major disagreements remain unresolved.

With the GOP holding only a slim majority in the House, leadership can afford to lose very few votes to pass the bill. Balancing the demands of both moderate and hardline members continues to be a major hurdle.

Disputes over Medicaid work requirements and the increase in the SALT deduction reflect deep divisions within the party. The resolution of these issues will be critical not only for the bill’s fate but also for Republican lawmakers’ standing ahead of the midterm elections.

Also Read: Trump’s New Tax Bill Could Push Bond Yields to 6% and Deepen U.S. Deficit, Experts Warn