House Speaker Mike Johnson, an old hand from Louisiana, is steering his Republican ship toward a fiscal iceberg, hoping to avoid the crushing weight of a $4.5 trillion tax reduction plan. True to form, Johnson wants to trim that package down to a more manageable $4 trillion, with $1.5 trillion in spending cuts tossed in for good measure, according to a saga spun by Politico.
To greenlight the original $4.5 trillion tax cut, Republicans would need a staggering $2 trillion in offsets. And as one senior GOP aide candidly put it, “There is no way we’re going to hit $2 trillion.”
The scaled-down package that Johnson is championing comes with its own set of complications. Among these is the inconvenient truth that it won’t be enough to make President Donald Trump’s 2017 tax cuts a permanent fixture in our fiscal landscape, let alone fund the domestic policy agenda he campaigned on.
“To fully extend and build upon the 2017 tax cuts, this means that the reconciliation bill must include at least $2 trillion in verifiable savings either through spending reductions or scaling back the size of the tax package,” a group of 32 fiscal conservative House members wrote in an open letter. Sounds like a hard row to hoe if you ask me.
The question that keeps bouncing around my mind is how blue state Republicans, who have a dog in the fight over state and local tax, or SALT, deductions, will navigate this rocky terrain. Rep. Mike Lawler, one of the few Republicans representing a district that Vice President Kamala Harris won in 2024, has made it clear: without a fix to SALT, there’s no bill.
“If nothing passes, SALT comes back unlimited, so it is on leadership to offer a number and negotiate from there,” Lawler said, “We are not negotiating against ourselves.”
How we navigate these choppy waters will say a lot about the state of our union and the core values we hold dear.
