(Bloomberg) -- Democratic Senator Bob Menendez of New Jersey said repealing the $10,000 cap on the federal deduction for state and local taxes for a few years could be a possibility as Congress wrestles with lawmakers’ demands to scrap it. 

“That’s the beginning towards helping to create relief. That could be a possibility, but raising the cap doesn’t solve anything,” Menendez said Tuesday. He said he expects agreement on SALT “to get relief right to taxpayers who overwhelmingly are donors to the national good.”

Menendez’s formulation builds on remarks by a House Democrat, Bill Pascrell of New Jersey, who said earlier this month that his peers in the chamber were considering a two-year repeal of the cap. The Republican-driven tax bill passed under President Donald Trump in 2017 slapped the $10,000 limit on the SALT deduction, stirring outrage in states with high local levies. 

The House Ways and Means Committee didn’t include SALT relief in a bill that the panel advanced earlier this month. But Democratic Chairman Richard Neal of Massachusetts has said that he is committed to finding a way to ease the cap.

Both the politics and financial implications of lifting the SALT limits are daunting. Restoring the full deduction would cost the Treasury tax revenue -- and it would largely benefit higher-earning households at a time when progressive lawmakers are pushing to steer the proposed $3.5 trillion economic package toward greater spending for low-income households.

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