Several US House Democrats have threatened to block Build Back Better legislation unless it includes the expansion of a federal deduction for taxes paid to states and local entities.
They promised to block President Joe Biden's renewed push for his spending bill if the broken-up package drops relief for the $10,000 limit on the federal deduction for state and local taxes, known as SALT.
The SALT deduction, which has been part of the US income tax code from its inception over a century ago, was limited to $10,000 in a 2017 Republican tax law.
Lawmakers have been seeking to expand the deduction in higher-tax states such as California, New Jersey and New York, particularly in suburbs where Democrats want to retain control in Nov. 8 elections.
"We support the president’s agenda, and if there are any efforts that include a change in the tax code, then a SALT fix must be part of it. No SALT, no deal," members Tom Suozzi of New York and Mikie Sherrill and Josh Gottheimer, both of New Jersey, said in a joint statement.
Asked about the House lawmakers' demand, a Biden White House official said, "We are in touch with a wide range of lawmakers regarding the president’s economic growth plan for the middle class, and weighed in about SALT late last year, but we won’t negotiate in public."
Biden said this week Democrats will probably have to break up the bill and attempt to pass parts of the legislation.
“I’m confident we can get pieces, big chunks of the Build Back Better law signed into law,” he said at a news conference on Wednesday.
The "SALT caucus" has over 30 members in the House of Representatives who seek to expand the deduction, including some Republicans.
Their demand means the White House would face more challenges as it tries to salvage some of Biden's $1.75 trillion social and climate package and push it through with slim congressional majorities.
The spending plan hit a roadblock in December when moderate Sen. Joe Manchin, D-W.Va., said he would not vote for it.
“I’m really not going to talk about Build Back Better anymore because I think I’ve been very clear on that. There is no negotiations going on at this time,” Manchin said earlier this month.
The White House and some Democrats claim that the bill will reduce the cost of living for many low-income families and ease inflation over the long run. Republicans, however, are concerned about the potential impact the bill would have on inflation.