Trump Speeds Up Tax Bill Deadline as Tentative SALT Deal Reached

A sculpture of former US President George Washington in the Rotunda of the US Capitol in Washington, DC, US, on Monday, June 2, 2025. Significant changes are in store for President Donald Trump's signature $3.9 trillion tax-cut bill as the Senate begins closed-door talks this week on legislation that squeaked through the House by a single vote. Photographer: Al Drago/Bloomberg Photo by Al Drago /Bloomberg

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(Bloomberg) — President Donald Trump amped up pressure on Congress to speed the passage of his tax-cut bill as Republicans reached a tentative deal on the state and local tax deduction, one of the key sticking points in the negotiations.

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“The House of Representatives must be ready to send it to my desk before July 4th — We can get it done,” Trump said on Truth Social Friday.

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The new deadline — before July 4 — is somewhat of a reversal for the president who, hours earlier told reporters that it wouldn’t be the “end-all” if negotiations took it a little longer to pass the self-imposed Independence Day goal.

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On Friday afternoon, the tentative SALT deal suggested that Republicans may have momentum on their side. The agreement involved raising the limit on the state and local tax deduction to $40,000 a year for a five-year period, Senator John Hoeven told reporters.

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Senators said the tentative plan is to begin voting on the bill Saturday midday. 

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It wasn’t immediately clear whether enough of the so-called SALT Republicans in the House would accept that proposal and drop their threats to block President Donald Trump’s massive tax and spending package.

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GOP lawmakers from New York, New Jersey and California have pressed to preserve a deal included in the House bill that increased the deduction cap to $40,000, up from the $10,000 in current law, for 10 years. The original Senate draft kept the write-off at $10,000.

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The latest deal retains a House proposal to phase out the deduction for taxpayers with at least $500,000 in income, a person familiar said, who requested anonymity to discuss private conversations.

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Republicans also plan to drop new limits they had sought on pass-through businesses’ deductions of state and local tax taxes, the person said.

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Until now, some business owners in most states haven’t actually needed to abide by the SALT cap that applies to everyone else, thanks to legal workarounds approved by legislatures in New York, New Jersey, Connecticut, California and dozens of other states.

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The House version of Trump’s massive tax and spending package put curbs on those workarounds.

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Tax Talks

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Treasury Secretary Scott Bessent told reporters at the Capitol that negotiators are “very, very close” on a SALT deal but he would not discuss specifics. He added that meeting the July 4 deadline provides “certainty.”

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The SALT provision has been one of several holdups for the Trump tax bill in the Senate.

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Senate Republican Leader John Thune is also trying to navigate competing demands from conservatives and moderates on social safety net cuts and the elimination of clean energy tax credits. He will need to resolve most of the disputes to secure the votes he needs to pass the bill.