ALBANY (TNS) — A plan championed by Republicans from New York in Congress to quadruple the current $10,000 cap on the federal deductibility of state and local taxes was rejected Monday in an alternative spending proposal from the U.S. Senate.

That sets up what could be a sticking point among Republicans in the two chambers on President Donald J. Trump’s spending agenda, called the “One Big Beautiful Bill.”

Republicans in Congress from New York spent a significant amount of political capital negotiating a version of the bill that would raise the cap to $40,000 after weeks of disagreement among their colleagues in the House.

But the Senate’s version of the spending plan released Monday would keep that cap at $10,000. U.S. Rep. Mike Lawler, a Republican who represents part of the lower Hudson Valley, said that’s a nonstarter.

“After engaging in good faith negotiations, we were able to increase the cap on SALT from $10,000 to $40,000,” Lawler said. “That is the deal, and I will not accept a penny less. If the Senate reduces the SALT number, I will vote no, and the bill will fail in the House.”

Republicans hold a slim majority in Lawler’s chamber, creating a situation in which the seven members of that party from New York could block the bill if they unite against it.

U.S. Rep. Nicole Malliotakis called the Senate’s response to their proposal “insulting.” She’s the lone Republican who represents part of New York City, which has its own income tax on top of what’s collected by the state.

“For the Senate to leave the SALT deduction capped at $10,000 is not only insulting but a slap in the face to the Republican districts that delivered our majority and trifecta,” said Malliotakis, referring to her party’s control of both chambers of Congress and the White House.

While both were key players in negotiating their chamber’s proposal, they were not alone.

U.S. Rep. Elise Stefanik, the most powerful Republican from New York who’s part of House leadership, helped broker the compromise that led to the proposal. Stefanik is a close ally of Trump, who vowed on the campaign trail that he would “get SALT back.”

Stefanik is one of just two Republicans in New York’s delegation in Congress, the other being U.S. Rep. Claudia Tenney, who voted to impose the current $10,000 cap back in 2017.

That’s when federal lawmakers passed the Tax Cuts and Jobs Act, the major tax bill ushered through Congress during Trump’s first term. The lower cap was traded for tax cuts across the board, including those for high-income earners and businesses.

Before then, there was no cap on how much in state and local taxes that filers could deduct from their federal taxes. That benefited high-tax states — which are often Democrat-led — like New York, where it’s not uncommon for state and local tax bills to exceed $10,000.

But Republicans in New York have since experienced turnover because of retirements and losses at the polls. The new roster of Republicans has strongly opposed the 2017 cap.

That’s in the House. New York has no Republican representation in the U.S. Senate, and while New York Sens. Charles E. Schumer and Kirsten Gillibrand want to fully repeal the cap, they don’t have leverage in the Senate with Democrats in the minority.

Republicans in the Senate oppose raising the cap because of how it would unbalance the budget sought by Trump. There are also no Republican senators from high-tax states who would benefit from raising the deduction cap, which some analysts say would increase the federal deficit and benefit more wealthy people.

The proposal in the House to raise the cap to $40,000 would result in $320 billion less in revenue for the federal government over the next decade, according to the Tax Foundation, a right-leaning think tank.

Trump has signaled to federal lawmakers that he would like a final spending bill approved in time to sign by July 4, giving Congress less than three weeks to reach a resolution.

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