US: SALTers Escalate Threat To Big Beautiful Bill If Senate Reduces SALT Cap
The Republican co-chairs of the SALT Caucus, Rep. Andrew Garbarino (R-NY) and Rep. Young Kim (R-CA), have issued a statement reiterating a warning made by Rep. Mike Lawler (R-NY) yesterday that the bloc could torpedo the 'Big Beautiful Bill' if Senate Republicans reduce the USD$40,000 SALT deduction cap in the House-passed bill. See US: Lawler Threatens To Tank Big Beautiful Bill If Senate Changes SALT Cap
- The statement reads: “When did taxing income that’s already been taxed become a Republican ideal? ... The Senate would be remiss to forget that the path to 218 — and delivering for the American people — runs through the SALT Caucus.”
- House Speaker Mike Johnson (R-LA) told Bloomberg TV today: “I am certainly trying to hold to that [$40K} number. I hope they tolerate it.”
- Bloomberg notes: "Senate Majority Leader John Thune [R-SD] told reporters that given there are no Senate Republicans fighting for an expanded SALT cap, he expects the Senate to change the House proposal."
- Senate Finance Committee Chair, Mike Crapo (R-ID), similarly pointed out that SALT is a non-issue in the Senate, following a White House meeting with President Donald Trump yesteday: “There's not a single [Republican] senator from New York or New Jersey or California,” meaning there's little appetite “to do $353 billion for [blue] states that, basically, the other states subsidize.”
- The bipartisan SALT Caucus has six Republican members in the House, sufficient to block legislation.
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UK DMO UPDATE: Quarterly Consultations With Gilt Market Investors
"The DMO would like to invite GEMMs and gilt investors to join discussions [...] on gilt issuance in July to September 2025. Attendees may be nominated by their representative organisations, or they may contact the DMO directly."
- "Please contact ceo-office@dmo.gov.uk by 12.00pm on Friday 9 May 2025 if you would like to request a place."
GILT AUCTION PREVIEW: On offer next week
The DMO has announced it will be looking to sell GBP1.0bln of the 0.625% Mar-45 linker (ISIN: GB00BMF9LH90) at its auction next Tuesday, May 13.
GERMANY: Merz Confirmed As Chancellor After Winning Required Absolute Majority
Friedrich Merz will be sworn in as chancellor later today after winning an absolute majority in the Bundestag at the second attempt. Merz secured the backing of 325 lawmakers, above the 316 absolute majority threshold, and 15 more than voted for him in this morning's first round that resulted in his shock defeat. The figure approving Merz is three short of the full seat total for his centre-right Christian Democratic Union/Christian Social Union (CDU/CSU) and the centre-left Social Democrats (SPD) that will form the next gov't.
- The number voting against Merz fell from 307 to 289, with one abstention and three invalid ballots. This means 12 lawmakers did not vote at all, up from nine this morning. Merz will now meet with President Frank-Walter Steinmeier, and then return to the Bundestag to be formally sworn-in at 1815CET (1215ET, 1715BST).
- The political drama of today will be swiftly forgotten, with focus turning to how the new Merz administration copes with the significant economic, social, and geopolitical issues facing Germany at present. Nevertheless, the tight margins for Merz in just getting his nomination approved could hint at troubles further down the line in terms of passing legislation in the Bundestag. It remains to be seen whether those anti-Merz SPD or CDU/CSU lawmakers maintain their rebellious streak in other bundestag votes where they do not have the blanket of anonymity in voting that is the case in chancellor confirmations.
