California’s vulnerable GOP members watch closely as final tax bill is negotiated

Reporting from Washington —  Vulnerable California Republicans say they are watching closely as House leaders work on a final tax bill with the Senate, hoping they’ll win back part of some popular deductions that would lower tax bills in their districts.

California Republican votes may prove essential to the final tax bill’s chances, and some have signaled they are willing to vote against it.

Rep. Steve Knight, who was among the California Republicans who voted for the House version after being promised changes in the final bill, said he’s meeting with House leaders multiple times a day to reach a compromise.

“I have made it very clear that this has got to be something very comfortable for me,” Knight of Palmdale said. “I’ve been very clear that I could be a no on this without a problem.”

All but three of California’s 14 Republican members of Congress voted for the House version of the bill, which passed with an 11-vote margin.

These maps show why some California Republicans are nervous about changes to the tax code »

Several California Republicans say they want taxpayers to be able to claim either a state and local income tax deduction or a property tax deduction up to $10,000, or perhaps a combination of both. The House and Senate plans included just the property tax deduction.

That change would be of limited value to the millions of Californians who take the state and local deduction. The average deduction for the 6.1 million residents who filed for it in 2015 was $18,438, according to the nonpartisan Tax Policy Center.

The members also want a compromise on how much mortgage interest taxpayers can deduct. The House bill limits it to the first $500,000 spent on a mortgage, the Senate bill keeps the current $1-million limit.

Southern California Republican members’ districts will be among the hardest hit by the loss of the deductions, and most of them are on Democrats’ target list in 2018.

Rep. Mimi Walters, who represents an Irvine district where 47% of taxpayers claim the state and local tax deduction, said she is feeling confident that the team negotiating a compromise, known as the conference committee, will reach an agreement she can live with.

“We are just now going into conference, I’m not sure what the actual final bill is going to look like. I’ve made my feelings known to everybody who is at the table and I consistently make sure my feelings are known and hopefully we’ll have a positive result,” said Walters, who voted for the House tax bill. “Keep watching. It will change second by second.”

Unlike Walters, the Republicans who voted against the House bill don’t seem confident they’ll get to yes on the final bill.

Rep. Darrell Issa of Vista was the first California Republican to say he’d vote no on the House bill, and said the Senate version wasn’t better.

“I oppose both proposals in their current form and I will continue to fight for tax relief that benefits all of our nation’s taxpayers — regardless of where they live. And if such a deal cannot be reached, the bill will not earn my support,” Issa said in a statement Monday.

Reps. Dana Rohrabacher (R-Costa Mesa) and Tom McClintock (R-Elk Grove) said they’re still talking to House leaders about their concerns the bill will raise taxes for their constituents.

“We’ll see if they take root or not,” McClintock said. “They are moving in our direction. How far they are willing to move is yet to be seen.”

Political groups have launched a wave of anti- and pro-tax plan ads to try to keep the pressure on, and Democratic activists are holding protests and rallies across the state to pressure GOP members to oppose the tax bill.

House Majority Leader Kevin McCarthy of Bakersfield kept most of the California delegation together to vote for the House version of the bill, but he acknowledged their concerns.

“There’s a lot of things that Californians are working on and why we said we’d move the process forward, looking to be able to make those changes,” said McCarthy, who is advocating for opening up the state and local tax limit and keeping the current deduction for new home mortgages.

Asked if he could commit to the changes his California colleagues want, McCarthy said, “that’s what conference is all about.”

Only one Californian, Rep. Devin Nunes, is on the conference committee. The Tulare Republican is a member of the House committee that wrote the bill and he’s supported it throughout the process.

Nunes told the Washington Post he doesn’t think the state and local tax deduction needs to be in the final bill, saying “this whole SALT issue is a red herring unless you’re looking for tax breaks for really, really rich people.”

The final version is expected to come back to the House before Christmas.

Though House leaders need most of their votes, the bill isn’t going to be written just to keep California Republicans on board. It has to include promises made to please nervous senators and House members from other states, fulfill House and Senate leaders’ commitments not to raise most individual tax rates, address concerns raised by various interest groups, and stay under debt caps required by the Senate.

“There’s going to be only a point that they can get to, so then I’ve got to weigh at some point if it’s far enough for me,” Knight said.

Los Angeles Times reporter Jim Puzzanghera contributed to this article.

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Read more about the 55 members of California’s delegation at latimes.com/politics

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UPDATES:

Dec. 8, 7:11 a.m.: This article was updated with information about the number of Californians who use the state and local tax deduction.

This article was originally published Dec. 7.