Trump gives blue state Republicans “homework” as the GOP plans sweeping conservative policy reform

President-elect Donald Trump is giving Republicans his blessing to negotiate a key tax that could prove crucial to Republican negotiations over sweeping conservative policy reform next year.

Trump met at Mar-a-Lago over the weekend with several different groups of House Republicans, including the blue state GOP lawmakers who make up the House SALT Caucus – a group that opposes the current 10,000 U.S. cap. State and local tax deduction (SALT) dollars are primarily affecting urban and suburban residents in areas with high income and property taxes, such as New York, New Jersey and California.

“I think it was productive and successful,” Rep. Nicole Malliotakis, R-N.Y., said of the meeting. “The President supports our efforts to increase the SALT deduction. He understands that mayors and governors in blue states are squeezing taxpayers and wants to provide relief at the federal level.”

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President-elect Donald Trump told New York Republicans he would work with them on a range of priorities (Chip Somodevilla/Getty Images)

But Trump also signaled that he was aware of opposition from other members of the House GOP conference, particularly Republicans from rural counties who viewed SALT deductions as tax breaks for the rich. Before the cap was implemented in 2017, there was no limit on how much state income and local property taxes people could deduct from their income when filing their federal returns.

“He gave us a little homework to work on, a number that could provide our middle-class voters with relief from the high taxes that our governor and mayor have imposed, and at the same time, you know, something that “(a majority of 218 votes),” Malliotakis said.

“I think we know pretty well that there will not be a complete lifting of the SALT cap. There is no desire in Congress or among American taxpayers to cut taxes for the super-rich.”

“Our efforts are really aimed at middle-class families, and that’s what we’re focusing on to get the balance right.”

The current cap on the SALT deduction has long been opposed by lawmakers in New York and California since it was introduced in Trump’s Tax Cuts and Jobs Act (TCJA).

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Rep. Nicole Malliotakis told Fox News Digital that Trump will work with New York Republicans on traffic congestion pricing (Drew Angerer/Getty Images)

Trump hinted that he would change course during his second term as early as September last year, when he posted on Truth Social that he would get “SALT back, cut taxes and so much more.”

The discussions are part of broader Republican talks about passing comprehensive fiscal and conservative reform through a process known as “reconciliation.”

By lowering the Senate’s hurdle for passage to a simple majority instead of two-thirds, the process allows the party that controls both chambers of Congress and the White House to pass certain legislation as long as it deals with budget and other tax matters .

Some Republicans who support the SALT deduction, such as Rep. Mike Lawler, R-N.Y., had signaled that they might withhold support for the final bill if the cap was not increased.

“The only red line I have is that if there was a tax bill that didn’t remove the cap on SALT, I wouldn’t support it,” Lawler told Fox News’ “Sunday Morning Futures.”

Lawler also said that Trump agreed that the SALT deduction caps needed to be raised.

Republicans in the House of Representatives, with their razor-thin majority since Trump’s inauguration until probably sometime in April, have virtually no room for error.

Rep. Mike Lawler said SALT deduction caps are a “red line” for his support of a budget reconciliation bill (Tierney L. Cross)

Meanwhile, Trump also told New York Republicans that he would help them fight their state’s controversial congestion pricing rule, which imposes additional costs for driving in parts of Manhattan.

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“He understands how unfair this is and the impact it would have on the city’s economy and the people we represent, and that is why we are currently working with him on legal options to reverse the Biden administration’s stamp of approval.” said Malliotakis. “If there is a legal way, if there is a legal way for him to stop congestion pricing, he will do it.”

“There are, you know, police officers, police officers, firefighters, nurses and the restaurant workers who have to go in at odd hours, and they drive because they feel like the transportation system is not clean or safe.”

Congestion pricing went into effect in New York City earlier this month.

Fox News Digital reached out to the Trump transition team for comment on this weekend’s meeting.