Frelinghuysen’s SALT Dilemma
It is both remarkable and amusing how in the world of politics, the same acronym can be applied to two totally different issues or processes. The best current example is the acronym, SALT.
In my twenties, during the 1970s, SALT was an acronym for the Strategic Arms Limitation Talks between the United States and the former Soviet Union. These talks resulted in two Strategic Arms Limitation Treaties (the second never ratified), for which SALT also served as an acronym.
Now that I am in my late sixties, SALT is an acronym for State and Local Taxes. Specifically, it is used in the context of the Trump administration’s proposal to eliminate the personal income tax deduction for state and local taxes paid. This deduction is most significant in terms of real estate taxes.
Before I discuss the Trump SALT proposal and the dilemma it poses for New Jersey Congressman Rodney Frelinghuysen, there are two full disclosures I must make, the first regarding my opinion of the Trump tax proposal and the second being my views on Rodney Frelinghuysen.
As my readers know, I am distinguished by my personal and political antipathy towards Donald Trump. My admiration for Senate GOP critics of the president, including, most noteworthy, John McCain, Bob Corker, and Jeff Flake is boundless.
Nevertheless, I strongly support the overall Trump tax package. In particular, I laud the corporate tax rate reduction and the provisions that authorize immediate expensing of business investments during the next five years. These provisions, in my view, would vastly expand both productivity and jobs. The Trump-proposed elimination of the Alternative Minimum Tax (AMT) would likewise spur small business growth.
As a matter of policy, I can as a private citizen embrace the elimination of the SALT deduction. For most middle class taxpayers, the doubling of the standard deduction outweighs any tax increase attributable to the elimination of the SALT deduction.
Actually, the SALT deduction yields its greatest benefit to upper income taxpayers. Yet I realize that it is a sacrosanct deduction to New Jersey voters, and any New Jersey member of the House of Representatives who votes for its elimination is placing his or her reelection prospects in grave jeopardy.
This is the dilemma facing Rodney Frelinghuysen. I admire Rodney as much as any Republican member of the House of Representatives during my lifetime. He is a man of unquestionable ethics, integrity, and competency. I say this with firsthand experience, having worked with Rodney in his capacities as 1) Assembly Appropriations Chair while I served in the early 1990s as Senior Policy Advisor on the New Jersey Assembly Republican Staff; and 2) a member of the House of Representatives while I served as Region 2 EPA Administrator.
Let me also add that on two issues of major personal importance to me, namely, environmental protection and American support for Israel, Rodney Frelinghuysen’s record is flawless. He has been a leader, not just a follower in both these issue areas.
Having provided my readers with my views on the both Trump tax package and Rodney Frelinghuysen, let me now focus on the special political minefields the SALT controversy poses for him.
It is estimated that the Trump tax package will cost the Treasury $10 trillion over the next five years. The House of Representatives budget vote last Thursday allowed tax cuts of this magnitude to begin with the forthcoming FY2018 budget.
Contrary to public perception, this budget bill contained no specific tax cut or tax reform provisions. The implication of certain New Jersey media figures that it does is an outright falsehood. The specifics of the Trump tax proposal will not be ready for a House vote until such a tax reform/ tax reduction bill is released by the House Ways and Means Committee.
Rodney Frelinghuysen was the only member of either party in the New Jersey House of Representatives delegation to vote for the budget bill last week. He had no choice but to vote for it. If he had voted against it, he would have been removed by House GOP leadership as Chair of the House Appropriations Committee, a position of immense power. His loss of this position would have been most detrimental to New Jersey as well.
It has to be Frelinghuysen’s hope that the House Ways and Means Committee fully preserves the SALT deduction. Otherwise, Frelinghuysen will have to make a career determination decision regarding his vote on the tax measure. If he votes against any bill eliminating in whole or in part the SALT deduction, he could be threatened by House GOP leadership with loss of his Appropriations Chair position. If he votes for such legislation, he runs a high risk of losing his Congressional seat in the 2018 election, which he would normally be favored to win handily.
So what will Rodney Frelinghuysen do? There is growing speculation among Washington insiders that he may choose not to run again if faced with defeat, due to any vote by him for partial or complete elimination of the SALT deduction.
Thus far, Frelinghuysen has given no sign of withdrawing from the 2018 race. His hiring of veteran political strategist Mike Duhaime as campaign consultant is taken by most as a sign of his resolve to run for reelection. Duhaime has special expertise regarding Morris County, which is the core of Rodney’s 11th Congressional District.
One could hardly fault Rodney Frelinghuysen, however, if he chooses not to run for reelection. The Democrats are a virtual certainty to capture control of the U.S. House of Representatives in 2018, given the enormous antipathy towards Trump throughout the nation, especially among women voters. When the Democrats capture control of the House, previously powerful Republican House members will find themselves reduced to the status of political eunuchs. This is not an inviting prospect for Rodney Frelinghuysen. It is a far different prospect for individual Republican Senators who retain their “hold” power over legislation and appointments, even if the GOP loses its present Senate majority.
It is far from certain as to what Rodney Frelinghuysen will do, either on a SALT deduction elimination vote or his decision whether to run for reelection. One thing is clear, however. The loss of Rodney Frelinghuysen by the New Jersey House of Representatives delegation would truly be the departure of a legislative giant.
Alan J. Steinberg served as Regional Administrator of Region 2 EPA during the administration of former President George W. Bush and as Executive Director of the New Jersey Meadowlands Commission under former New Jersey Governor Christie Whitman.
VOTE HIM OUT. How is eliminating SALT a benefit for the people of NJ ?
“Unquestionable ethics”? Not anymore. He’s under ethics investigation for his “ringleader” comment to an activist’s employer, or now, ex-employer.
“Flawless” on environmental protection? The Defenders of Wildlife gave him a 0% rating in 2016, as they had in 2015.
He is putting his chairmanship above his constituents, and party above country. That’s not integrity.