Menendez criticizes SALT cap proposal under consideration for spending bill

Menendez criticizes SALT cap proposal under consideration for spending bill
© Greg Nash

Sen. Bob MenendezRobert (Bob) MenendezFive ways Senate could change Biden's spending plan Spending bill faces Senate scramble Republicans raise concerns over Biden's nominee for ambassador to Germany MORE (D-N.J.) on Wednesday criticized a proposal under discussion for Democrats' social spending bill to repeal the cap on the state and local tax (SALT) deduction, expressing concerns that the proposal would amount to a budget gimmick that would largely benefit the wealthy.

Democrats are looking at fully repealing the $10,000 cap for five years and offsetting the cost of doing so by reimposing the cap in subsequent years.

Menendez, like many other lawmakers from New Jersey, has long been critical of the cap. However, he said that relief from the $10,000 limit should be targeted to the middle class.

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“If one thing is crystal clear for me it’s that given the limited resources we have to address the SALT cap, relief must be targeted to the families that need it most," Menendez said in a statement. "I’m concerned that current proposals to provide full relief on a temporary basis, only to then turnaround and fully reinstate the SALT cap on middle class families for years to come is nothing more than a bait and switch. We cannot afford to get this wrong — it’s time to stop with the gimmicks. Hardworking families depend on this deduction and we must deliver real relief.”

Menendez also expressed his concerns about the proposal on Twitter.

A spokesperson for Menendez said that the senator has been looking at alternative ways to make changes to the SALT cap and hopes that an agreement can be reached that focuses on families making less than $500,000.

Menendez's comments came following Tuesday's gubernatorial election in New Jersey. Incumbent Gov. Phil Murphy (D) was narrowly leading as of Wednesday afternoon, but the race was still too close to call.

Republicans created the cap on the SALT deduction as part of their 2017 tax law. Many Democrats from high-tax states such as New York, New Jersey and California have been pushing for repeal of the cap, arguing that it hurts their states and residents. But Democrats face challenges in repealing the cap because analysts estimate that doing so would largely benefit high-income households.

Menendez isn't the only Democratic senator who has criticized the proposal to repeal the SALT cap in the near-term and reimpose it in the future.

Sen. Bernie SandersBernie SandersSenate GOP blocks defense bill, throwing it into limbo This week: Congress starts year-end legislative sprint Restless progressives eye 2024 MORE (I-Vt.) also took issue with the proposal on Tuesday, calling it "beyond unacceptable."