Bloomberg News
A second Trump administration is expected to make some changes, whether big or small to the state and local tax deduction, an issue Trump campaigned on and that has been talked about within the context of tax reform for years.
That’s according to a post-election recap discussion hosted by law firm K&L Gates on Friday, where lawyers and government affairs specialists gathered to look into the tea leaves at what a second Trump administration may bring.
“I think that there is a good chance that something is done on SALT,” said Mary Burke Baker, government affairs counsel for K&L Gates. “Whether or not the cap is completely lifted, I’m skeptical about that, but at a minimum I think doubling it for married filing joint taxpayers might be a logical approach. President-elect Trump campaigned on that, and as we know, it’s a pivotal issue for a lot of Republicans in high tax states, not to mention for Democrats.”
But bigger changes could be less on specific issues but rather with entire agencies, such as the Department of Transportation.
“Especially when you have CEOs like Elon Musk whispering into Trump’s ear, we’re going to have an administration aimed at disrupting the norm, at looking at sort of first principles for how would you design the rules around commercial space flight, around automated vehicles, around different transportation modes, with the current technology and the vision for future technology as a basis for it,” said Finch Fulton, government affairs advisor at K&L Gates. “We also know we’re facing deficits in our national budget and more specifically with the Highway Trust Fund itself and we know that the service transportation reauthorization or the bipartisan infrastructure law is due to be reauthorized in September 2026, so if we’re looking at a unified government like it sounds like it will be, you can bet they’re going to want to get that bill done before the midterms.”
Fulton, formerly an official with the DOT’s policy office, said that work on reauthorization will have to begin immediately once the new administration takes its seats. Before that, he expects the Biden Administration to take specific actions around automated vehicles in the lame duck session before Jan. 20, in order to “anchor the policy discussions with their own preferences,” Fulton said.
The threat of a government shutdown before Trump takes office isn’t causing much alarm.
“First of all, I don’t suspect that there will be a government shutdown, I don’t think either side wants it,” said Ryan Carney, government affairs advisor at K&L Gates. “I could envision Congress passing another stopgap for a few weeks or early into the new presidential term.”
Government funding is set to expire Dec. 20, and the debt limit is set to expire on Jan. 2, which is also the last full day of Congress. With Congress back in session this week, that will count among its highest priorities.
Another thing to look for will be the names that the administration begins to float for Transportation Secretary, as well as the rest of the team, “which can really give us insights into the areas of prioritization,” Fulton said. “If you need to focus on something, you got to bring in people with the right skill sets.”