From Washington: Debate Over The Budget Bill Gets SALT-y
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Sunday, June 22nd, 2025. I'm Ryan Schmelz. President Trump wants the one big beautiful bill signed into law by the 4th of July, but there's still a number of issues standing in the way. If they change it too much, it might be a problem to get it back through the House. The House and Senate eventually have to be on the same page. And a group of lawmakers are threatening to vote no on the massive package.

if a key tax provision is removed. - The Senate would be well advised to just leave the number as it was negotiated in the House with the White House and move forward on other things that they're focused on. - This is the Fox News Rundown from Washington.

While much of Washington's focus was on the conflict between Israel and Iran, many members of Congress are on edge following the tragic assassination of Minnesota state lawmaker Melissa Hortman and her husband Mark. Senators took part in security briefings this week, as Minnesota's Amy Klobuchar says the increasing threats against lawmakers can't be tolerated. AMY KLOBUCHAR, Minnesota State Lawmaker: We went from 1,700 threats in 2016

to over 9,000 threats against members of Congress last year. The Senate also releasing its version of the "One Big Beautiful Bill," as White House Press Secretary Caroline Leavitt says President Trump wants the massive tax and spending package passed by the Fourth of July. Simply put, the "One Big Beautiful Bill" is a massive win for middle-class Americans.

When nearly 80 million Americans sent President Trump back to this White House, they were doing so expecting these popular policies to be enacted. Republicans in Congress have a mandate to deliver. And President Trump demands they send this historic bill to his desk for signature by Independence Day, July 4th.

But a number of changes from the Senate version compared to the House version have some Republicans, like Darrell Issa, frustrated, as he told me on the Fox News Rundown Evening Edition earlier this week. I think for my New York and my colleagues in California,

that's kind of a slap in the face. No consideration for these states that really gave so much that in some cases they got a tax increase in 2017. Can Republicans find an agreement that gives the

president a major legislative win. I spoke with Fox's senior congressional correspondent, Chad Pergram, late last week. Not everybody in the Senate on the Republican side is pleased with this, for starters. Number one, everybody's saying, OK, we have a chance to amend this and change this, but they have to start somewhere. You have Republicans in the House who are saying, don't change this too much. That's been the message from House Speaker Mike Johnson, meaning that the Senate has to change it a little bit

So it can comply with very special Senate budget rules, but if they change it too much, it might be a problem to get it back through the House. The House and Senate eventually have to be on the same page.

The things I would look at here is that the positions of Rand Paul, the Republican senator from Kentucky, have not changed. He's probably going to vote no just on the issue of the debt ceiling alone. A debt ceiling increase, which is higher in the Senate version than in the House, is in this bill, and he's just adamantly opposed to that. Ron Johnson is also opposed. He doesn't think it cuts enough spending.

Then you get to somebody like Josh Hawley, Republican of Missouri, who he has problems with how this treats rural hospitals and some of the reimbursements there. And maybe look at somebody like Jim Justice of West Virginia. He has some problems with the cuts or changes, depending on who you talk to, to Medicaid. And the other wild card in this, and we've talked about five people here, and that would take you below the 50-vote threshold. They could still pass this on a 50-50 vote with Vice President Vance breaking the tie, is Rick Scott.

Republican of Florida. He has played his cards very close to the vest. I tend to think they probably get at least a couple of these folks. And the general thought is they can get this through the Senate before the July 4th recess, probably the end of next week, maybe the weekend right before July 4th, because some of these folks are going to make their appeals and then get some sort of an agreement or a side deal or whatever. And you stick to your position in

until the very end, because otherwise, you know, you just give up and then you don't get what you're pushing for. Okay, so that's why you stay in play till the very end. Getting this through the House by the 4th of July,

I would put that at about 10 to 15 percent. Why? Because the House is supposed to be into session. You know, they've been out this past week, but into session next week. But they're going to be out again after, you know, the Fourth of July recess here. If the Senate were to able were able to move this really, really fast, maybe you could get it through the House because you don't want this thing to sit out there too fast, you know, depending if the changes are really minimal.

And they think this is within range. They keep the House maybe around a few days just before the 4th of July, and they pass it, and they meet their mark. The real deadline in this is the first week of August, give or take, really, because that's when Congress is supposed to go on recess, but because that's also the general deadline for hitting the debt ceiling. And that's something they have to address, or otherwise they've got to do another piece of legislation.

And there's some other ones out there, too. You know, take Susan Collins, for example. She has similar concerns to what Senator Hawley has been talking about. You have Ted Budd, who wants to see those spending levels cut further. And even somebody like Lisa Murkowski has her fair share of issues, too. So it seems like they're far and away from getting this thing right. And, of course, you take the House, for example, also, Chad.

Lowering that SALT deduction down from $40,000 to $10,000, Republicans from New York, New Jersey, California have pretty much said this is a big no for them. That's their red line. That's right. And, you know, they would not have, the Republicans would not have the majority in the House of Representatives if it was not for some of these, you know, Republicans, moderates, mostly from New York, a few from California, some other places, where

were it not for those members. And Mark Alford, who is a Republican from Missouri, was on Fox Business this week. And he said, look, Mike Lawler, who's the Republican, probably the biggest pro-SALT member in the House, he said, we have to protect these guys, or otherwise we're not going to have the majority. Remember how tight that majority is in the House of Representatives.

And again, that's the other problem is there's plenty of Republicans in the House and plenty in the Senate who don't want SALT at all. But they realize in order to move the entire bill, and that's been one of the most outstanding issues from the beginning of this entire process, there has to be something allowed in that. Now, I will say this. Look for this. Let's say they really reduce that SALT deduction. This is for high tax states. Let's say they really get it down to $10,000 or maybe even $0,000.

And keep in mind that Mike Lawler and a couple other New York Republicans, Nick Lelota and some others who are very interested in this, they have already voted for this because they voted on this in the original version of the House of Representatives. They're on the record of getting what they want. Let's say they take that out completely in this bill and they eventually pass this bill and there's no SALT deduction in it. Well, here's the dirty little secret in Washington.

The SALT deduction goes back to what it was in 2017, which is what these guys have hewed and cried about for eight years now. And so it actually works out better for them to have voted and been on the record, and they can put this in their campaign ads in 2026 and saying, "We fought for that." And they have the vote. They didn't vote against it.

They take it out of the bill completely, and this is just a hypothetical, and then it goes back to the actual deduction that they really wanted, which was much higher back in 2017. That's probably a win-win for those guys. And you explained that last week. Now, in order for that to happen, they would have to completely strip all sought language from the bill completely. No 10,000, no zero, just that the bill cannot mention sought at all, correct? Right. And you know what that helps with?

deficit reduction because they talk about the cost of this bill and if they want more deficit reduction or less spending, the more tax breaks you have in a bill, well, the less revenue you're going to be able to bring in. SALT, the way the new structure in 2017 actually brings in more revenue. So if you take that out, you lose revenue and you have trouble balancing the books on this.

If you leave it out, well, guess what? That actually helps them because then you have that higher deduction, at least on paper with this bill. I'll say that again, at least on paper with this bill, because maybe the Senate needs that to comply with these budget rules. Remember that they're using this special process in the Senate. You're going to hear it a lot the next couple of days. Budget reconciliation. It's a process where they can go around a filibuster and just need a simple majority. They don't need 60 votes.

But because they're using budget reconciliation, it has to be budget neutral. It cannot add to the deficit. And so that probably helps, even though, let's say, hypothetically, in January 2026, we're looking at a very different tax code with that SALT provision that I just talked about, going back to what it was in 2017, that actually technically busts a higher hole in the deficit. But on paper, it works out to get through the Senate process.

Yeah, I was going to say that because it increases the deficit as a whole if it expires. But if they take it out of the bill, the bill can become more deficit neutral. It is it's a fascinating thing you've just brought to my attention, Chad. So we appreciate that. We got a couple of things to get to here, though. Certainly, lawmaker safety has become a huge problem. Chad, in all your years being on the Hill, have you seen lawmakers facing the threats they're facing right now?

No, because it is directed in this social media era. And, you know, we've lived through the Gabby Gifford shooting. We've lived through, you know, various members being, you know, swatted or people coming to their homes or threats against them. The baseball practice shooting in 2017. We've been through all those things. So nothing directly has happened, thankfully, to members of Congress right now. But the fact that these Minnesota state lawmakers were targeted against

and the assailant went to their homes and brought their family members into this, you know, members of Congress are kind of willing to say, "Okay, my name is on the wall in the Rayburn House Office building outside my office. My name is on the ballot. My family members' names are not. Therefore, you know, this is a bridge too far." And that's what completely freaked out everybody up here. And the fact that there were many of these members on the list by the accused gunman

who were House and Senate members. We've not reported that specifically, but the idea that that is there, and we do know about that, they're taking that threat very seriously. In fact, Hillary Skulden, who's a Democrat from Michigan,

called off a town hall meeting that she had scheduled because she was worried about security. And this is where some members have started to dial that back and say, you know, you actually reach more people, and you have more engagement, and you have less hassle from the rabble-rousers, and you have better safety if you do some of these digital town halls that they do now, because these town halls get very volatile.

There might be a risk of security or safety. There's certainly just the idea that people are looking for a site bite, the idea, oh, we really stuck it to congressman or congresswoman so-and-so and got him on the edge and there was a shouting match and the police had to pull him out of the meeting. That's great video and it goes viral everywhere on TikTok, etc. But that's what really flakes people out. And the question here is whether or not the Capitol Police are set up to protect 535 members.

and their families. That's a lot of people. Most of those people are not here in Washington. They are back in their states, in North Dakota and Nebraska and Florida and Georgia and South Carolina. How do you figure that out? And I mean, you know, they've talked about maybe giving a detail to all these members. Well, what would Congress have to do?

They'd have to approve additional money for that. There is an actual spending bill, a legislative branch appropriations bill that has to go through the House and the Senate and goes to Congress that they would work on right now for fiscal 2026, fiscal year 2026, which will start in October. And they would have to approve that. That's a lot of extra money. Talk about deficit reduction. Well, here we are again.

And, you know, there are a couple of classified briefings this week. You know, certainly tensions were high in certain cases. What did you make of any of the ideas that have been floated outside of those additional resources for the Capitol Police? But have you seen any kind of other ideas that members are putting out there that could add to security or at least give people more peace of mind? One thing I saw that I believe is Mike Rounds, the senator from the senator was floating, was that, you know,

Police need to do a maybe focus more on some of these threats that are made on social media and then targeting those threats and going after the specific individual as opposed to maybe increasing security detail.

Right. And this is where doxing and posting stuff on the Internet is very important. And the challenge for Capitol Police is having the resources to understand which of all of these incidents is just not somebody letting off steam or somebody who's just a keyboard warrior sitting at home and they just spout off about everything. You know, the damning thing in the Gifford shooting and the congressional baseball practice shooting is that there was no overt threat.

in the congressional baseball practice shooting, which I covered exhaustively, Mike Bost, who is a congressman, Republican from Illinois, his office was familiar with the shooter, James Hodgkinson, but not from a threatening standpoint. They knew that he had his points of view.

He came to meetings once in a while. He called the office often and was always mad about something, but not like in a threatening way. It's like, you know, this is my position and I want you to know about it. And I disagree with you guys. OK, you get that all day. That's how it's supposed to be. So then when somebody flips out and changes and pulls out a gun at a baseball practice, how do you get to that point? That's that's the that's the problem.

And again, most of these things seem to be happening not around the Capitol. The Capitol is a citadel. We've had our security problems here certainly over the years. You know, January 6th stands out. But the idea that most of these things seem to be happening back home. And, you know, when you have people spread in the House to 435 different winds, how do you deal with that?

It's a very complicated issue, a very concerning issue to the Chattans. They don't know how to solve it. That's the problem right now. I mean, Gabby Giffords was shot in January of 2011. It is now halfway through 2025, and they don't have a better answer to that. Why? Because it is a really hard problem to solve.

Yeah, no, but certainly. I mean, I had a former coworker who ended up running for the Senate and he had a death threat when he went back to work, you know, and and FBI to get involved in everything like that. It's it certainly is very concerning. And we got one more topic to touch on here, Chad, and that is the auto pen investigation into former President Biden. Where do you kind of make of where things stand with that and what the next steps are here?

Well, you know, once they get through the big, beautiful bill and maybe fund the government in September, October, we'll see how that goes. What do Republicans have to do in Congress for the rest of the Congress? This Congress goes until early January of 2027.

Well, they are going back to this horse. And there is some merit to some of this, don't get me wrong, about beating up the Bidens and specifically President Biden, but also exploring whether or not he was competent and had proper mental acuity to carry out the office at that time. Some of this is looking backwards. Some of this is looking forwards. You know, I talked to Eric Schmidt, the Republican senator from Missouri, who co-chaired the hearing with John Cornyn from Texas. This is the Senate Judiciary Committee.

And Schmidt said, you know, we want to understand what happens with the 25th Amendment. You know, what are the powers to maybe, you know, take out a president if you need to, you know, if you think that they are not qualified for the job? Also look into how complicit, whether it be certain members of the press corps, but certainly staff and the Democratic apparatus at the Biden White House, what did they know? I think it's been very interesting. This is a separate hearing or a separate approach at the House of Representatives here.

The House Oversight Committee is having a number of Biden-era officials, White House officials, come in and testify for closed-door depositions in the next few weeks. Some of these start in just a couple of days. Kevin O'Connor, who is his doctor, has been issued a subpoena. And generally, most of them seem willing to come in, I think because maybe their interpretation of this is different. And we will get transcribed interviews or we'll get transcriptions of those transcribed interviews probably a day or two after some of this comes out.

I was struck by the fact, I mentioned John Cornyn and Eric Schmidt, who co-chaired this hearing. Chuck Grassley is the oldest member of Congress. He is a senator from Iowa. He is in his 90s. He is the chair of the Judiciary Committee, and I thought it was very interesting that they did not have him chair this hearing about President Biden. That point was not lost on me.

And so just the idea that that tells you Republicans are leery about this on the other side, too. But again, what they're demonstrating here is, you know, what the president, you know, you know, who around former President Biden knew what and what did they know and when did they know it? And just how competent was he? The problem that you have is that you have a lot of video evidence showing.

ranging from that June debate last year to just not a lot of access. You have cabinet members saying in the book Original Sin that he seemed checked out and they had diminished access to him. I thought one of the most interesting parts of the hearing is that Ted Cruz from Texas, he pointed out that Joe Biden signed every executive order that he put out in 2022 until about July.

And every executive order the rest of the year was done with the auto pen. If you go through the rest of his presidency, 2023, 2024, and a little bit of 2025, it's not all of the executive orders done with the auto pen, but it's clearly the majority.

And so people will say, well, is the auto pin legit? Well, there was a professor from the University of Virginia that's found, you know, in the Constitution and in the law. You know, it's not written about the auto pin in the Constitution, certainly, but generally that's accepted. But it has to be the president calling the shots to use the auto pin.

And so, you know, so their question is there about the auto pin is if President Biden was, you know, signed out, who was signed in? You know, it's OK to use that. But again, that's the that's the question. Who was calling the shots? And you know what? This is this is the amazing thing about this entire entire story, Ryan. This is not new. This is not new at all. Edith Wilson was Woodrow Wilson's wife. He had a stroke recently.

And it was generally known, and this is certainly not within the realm of constitutionality, that she was kind of making decisions for him in the latter part of his presidency.

This was back in the early part of the 20th century. It was well known in Washington, but there was no such thing as television, that FDR was in a wheelchair. You see pictures here at the Capitol of him giving State of the Union address and others, and the press was complicit in this. President Kennedy had back issues.

President Reagan, when he was shot in 1981, actually came very close to dying. And they kind of let on, oh, he was actually OK and it wasn't that bad and that sort of stuff. This is not new about the subterfuge around presidents and their health. We saw it with President Trump when he had covid.

The idea that, you know, he was rushed off to the hospital and things, and they tried to present this image. This happens with all presidents. This happens with all presidents to varying degrees. So none of this is new with former President Biden.

And then one last point for me, Chad, you know, I've been one of the things I've been kind of telling people that this investigation could do, too, is, you know, number one, they're able to get people on the record. And, you know, yes, President Biden's probably not running for president again, but there are people who.

who were very close to him who are still serving as members of Congress. Hakeem Jeffries could be the next Speaker of the House. There are some other members of House Democratic leadership who have some pretty high political ambitions for the future. Well, you know...

How much do they know and how much are they not saying? So I think especially people who were close to the president. That's right. I mean, I mean, well, let's start with, you know, former Vice President Harris. OK, you know, does she run for governor? California, does she run for president? Twenty twenty eight. She probably was around the most and they can really target her probably the most. Pete Buttigieg.

Yeah, potential presidential candidate. He might run for president, too. What did he know? You see, so some of this is already and, you know, this is about a lot of different things. But among others, it's also about 2028 and saying, oh, you see, you want that guy? They lied about Biden. We found out what his health really was. And this was a bad problem. So, you know, that's what some of this is about, too. Yeah. A lot to follow, Chad. But thank you so much for your help as always. And we'll talk next week.

My pleasure. Thank you.

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Thank you.

The Senate version of the One Big Beautiful Bill Act took the cap for the state and local tax deduction down from $40,000 to $10,000. That frustrated a number of Republicans from blue states like New York, New Jersey and California, who've been trying to provide tax relief to their constituents. Red State Republicans, though, argue the federal government shouldn't be subsidizing high tax states.

and have issues with how much it costs. But a number of Republicans who represent swing districts, key for Republicans keeping the majority after the midterms, are threatening to vote no if the final bill doesn't have the salt cap they helped negotiate. -Well, look, this has obviously been an issue going back to 2017 when the Tax Cuts and Jobs Act was passed. -New York Congressman Mike Lawler is one of three House Republicans representing a district won by Vice President Harris last November.

He spoke with Jessica Rosenthal on the Fox News rundown earlier this week. The $10,000 cap was arbitrary and capricious, and it was used as a pay-for for other provisions of the tax bill. Obviously, back then, Republicans had a much wider majority and were able to jam it through, even without support from members in New York and California and other states that were impacted.

Fast forward to now, I've been very clear from the moment that I came to Washington that I would never support a tax bill that doesn't adequately lift the cap on salt. And we negotiated in good faith with House leadership and the president, the White House, to lift the cap to $40,000 and put an income cap of $500,000. And that is something that we negotiated and were able to pass through the House.

The Senate is trying to change that back to the $10,000 number. And I've been very clear that is a hard no. The bill is dead on arrival and there is zero chance that that will become law. So the Senate would be well advised to just leave the number as it was negotiated in the House with the White House.

and move forward on other things that they're focused on. It does seem like this is the hill you're dying on. I think you posted the gif of Joaquin Phoenix and Gladiator giving the thumbs down. Really awesome use of that, by the way. Why is it such a motivator for you and your district?

Well, we live in one of the highest taxed areas in the country. And this isn't just an issue of bad blue state governance. We can all agree Kathy Hochul is terrible and Gavin Newsom is terrible out in California. But the reality is that the cap on salt has impacted

Everybody across the country, 29 states blew past the $10,000 cap in their state and local tax burden on an average basis. So this is an issue not just about blue states. It's about the middle class. It is about providing real tax relief for people who are getting squeezed by high property taxes, which, by the way, a state like Texas has extremely high property taxes.

And a state like New York, where you have both high property taxes and high state income taxes, you should not be double taxed. You should not be penalized simply because you live in a high tax state. This was in effect for over 100 years. People were able to fully deduct their state and local taxes. So we're trying to provide some fairness. And obviously, when you look at the margins in the House,

You know, it's the SALT district members that gave us the majority. We're the ones that won and flipped Democratic districts. And so, you know, we're fighting for our constituents. We're fighting for our districts. And we've all been very clear and transparent about this. Nobody has misled anybody. We've been very upfront that if they did not fix this in the bill, we could not support the bill. Yeah. Yeah.

And to that point, your district went for Vice President Harris in the 2024 election. So that does seem significant. What did the president say to you about this last month? Like, have you guys spoken since? And what did he say about all this? Well, when the president came in,

to see us in conference. He talked quite extensively about SALT. He referred to me by name numerous times and really encouraging us to take the deal that was under the House Ways and Means Committee language. And we respectfully declined and negotiated further with the White House. And

and House leadership and came to an agreement. And I saw the president last week at the White House for the congressional picnic, and we talked briefly about SALT, and I encouraged him again about the need to keep this at the 40,000. He said he's

spoken to the Senate and knows there's some angst on their end about it, but that everybody's working to get this done. And look, we want to get a bill done. There's no question. Nobody is trying to be an impediment to getting a bill passed. But I made very clear where I was from the very beginning on this and

and what needed to get done. We have negotiated in good faith. We have recognized that we're not gonna get unlimited SALT, but we need to provide real tax relief to middle-class and working class families. And that's what this negotiation was about.

Other things I want to get your thoughts on, given your constituency, I assume you're hearing from people about Israel and Iran. There are plenty of President Trump supporters who are basically saying they do not support the U.S. joining Israel and attacking Iran. In your mind, when you speak to people, is there a line? Like help with taking out nuclear facilities is different from boots on the ground, or is it all lumped together from what you hear?

Look, no question. I don't think anybody is advocating for boots on the ground in Iran. I don't think anybody is advocating for the U.S. to lead a regime change effort. The fact is, you know, war today is different than it was 20 years ago during the Iraq war.

But there is no question that Iran cannot have a nuclear weapon. And presidents from both parties for decades have made that clear. We are at a point where Iran not only is close to achieving it, but has shown through their actions, through the use of ballistic missiles, through the funding of terror proxies, that they are hell-bent on eradicating the state of Israel and the United States.

And you have to remember, we not only have 40,000 troops in the region, there's over 700,000 Americans who are dual citizens in Israel and live there at least part time, if not full time. So this is not just an Israel problem. You know, they didn't create this situation. Iran is the largest state sponsor of terrorism in the world.

and they want to use a nuke to eliminate Israel, period. So this is a fight that is about good versus evil. There is no moral equivalency here. You know, Ilhan Omar said yesterday that this is Israel's war. They started this. No, Iran has been funding terrorism for decades. They have been killing Jews for decades.

They funded and supported Hamas's attack on October 7th. They have launched hundreds of ballistic missiles at civilian populations intent on killing Jews. So this is a fight for freedom. This is a fight to ensure that Iran does not become a nuclear power. And ultimately, if the Iranian people, no longer under the fear of a nuclear Iran, are able to rise up, great.

If we can see a change in the Middle East and a more peaceful Middle East, that's great. Obviously, we have seen the decimation of Hamas and Hezbollah. We've seen the collapse of Assad's regime in Syria and obviously a weakened Iran with their air defenses down and their nuclear program close to being eliminated. That is a positive step forward for the Middle East and the world.

I have to get your thoughts before I let you go on the mayor's race. The New York Times coming out with an op-ed against Arun Mamdani. He's getting a lot of support, though, from people like AOC and Bernie Sanders. We have this arrest of Brandon Lander after he linked arms with a person ICE was trying to detain inside a federal building. What do you make of this race, particularly on the, of course, the Democratic side, even though you're a Republican, with watching Andrew Cuomo try and make a political comeback? There's a lot happening here.

Well, the fact that Andrew Cuomo is in a position to win speaks volumes to how bad the options are. I think, obviously, Zoran is somebody who is an avowed socialist, somebody who has supported very loudly and clearly the defund the police movement, no matter how much he tries to clean that up now. He does not support the state of Israel. And so, obviously, he would be a singular destructive force as mayor.

and frankly make Bill de Blasio look moderate by comparison. But this is a real challenge. New York City has been horribly run since Mike Bloomberg left office.

And there have been real consequences to that, both in terms of public safety, as well as, frankly, the loss of businesses and people. People are leaving New York in droves, businesses leaving Wall Street, moving to other parts of the country. It's created a real catastrophe. And obviously, you look at

You know, this race coming up on Tuesday, it's going to be fascinating to see. I think New York City certainly has moved further to the left. It has become more progressive. There's no question about that. There is growing resistance, if you will, but it will be a fascinating finish, especially with ranked choice voting. I think Zoran, you know, he certainly has a personality. He's charismatic, charismatic.

and is appealing to a broad swath, especially in comparison to Cuomo, you know, who's, you know, frankly, just not likable. And it ultimately, it's going to be a fascinating fight to the finish here. Yeah, we'll all be watching. Republican Congressman Mike Lawler of the 17th District of New York, thank you so much for joining us. Thank you. Appreciate it.

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That will do it for this edition of the Fox News Rundown from Washington. Tomorrow, we continue following the latest updates with the White House and Congress's response to the ongoing conflict with Israel and Iran and track the latest with the One Big Beautiful Bill Act. For now, I'm Ryan Schmelz. Thank you for listening to the Fox News Rundown from Washington.

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