Trump Urges Swift Action Oon Tax Bill As Republicans Reach Tentative SALT Deal

President Donald Trump intensified his push Friday for Congress to pass his sweeping tax and spending package before the July 4 holiday, as Senate Republicans announced a tentative deal on one of the legislation’s most contentious issues: the state and local tax deduction.

“The House of Representatives must be ready to send it to my desk before July 4th — We can get it done,” Mr. Trump wrote on Truth Social, setting a firmer deadline after earlier signaling that slipping past Independence Day “wouldn’t be the end-all.”

The agreement on the so-called SALT cap would raise the current $10,000 deduction limit to $40,000 annually for five years, Senator John Hoeven told reporters Friday afternoon. The development marked a potential breakthrough in negotiations that have divided Republican lawmakers, particularly those from high-tax states like New York, New Jersey and California.

The Senate plans to begin voting on the bill as early as midday Saturday. Still, it remained uncertain whether the compromise would be enough to win over a bloc of House Republicans who had threatened to oppose the package unless the SALT deduction was expanded for a full decade.

This latest revision on includes a phaseout of the enhanced deduction for taxpayers earning $500,000 or more, according to a person familiar with the discussions who requested anonymity to describe private talks. In a further concession, negotiators also agreed to abandon a proposal that would have placed new restrictions on the ability of pass-through businesses – like partnerships and LLCs – to deduct state and local taxes.

That proposal had targeted workaround structures approved by legislatures in states like New York, Connecticut and California, which allowed business owners to sidestep the $10,000 cap that applies to most individual taxpayers. The House version of Mr. Trump’s plan had sought to curtail those arrangements.

Speaking to reporters at the Capitol, Treasury Secretary Scott Bessent said negotiators were “very, very close” to finalizing the SALT provision. He declined to offer details but emphasized the importance of meeting the president’s July 4 deadline, calling it a source of “certainty.”

The SALT issue is just one of several obstacles that have slowed the bill’s progress in the Senate. Republican leaders are also working to reconcile divisions over proposed cuts to social programs and the elimination of clean energy tax credits—priorities for conservative members that have raised concerns among moderates.

Senator John Thune, the Republican leader, faces the challenge of uniting the party behind a bill that represents the cornerstone of Mr. Trump’s second-term economic agenda. The legislation would make permanent the individual and corporate tax cuts enacted in 2017, while introducing temporary tax breaks for hourly workers, seniors, and new car buyers.

In addition to its tax provisions, the bill authorizes hundreds of billions in new spending for defense, border enforcement, and immigration operations. To offset some of the projected revenue loss, the measure scales back funding for Medicaid, food assistance programs, and federal college aid.

Crucially, the package also includes a $5 trillion increase in the debt ceiling, a move intended to prevent a federal default projected as early as August.

As Republican lawmakers prepare for a weekend of high-stakes votes, the fate of the bill—and its sweeping economic implications—now rests on whether internal party divisions can be resolved in time.