Gary Cohn talks state and local tax deductions in GOP tax plan

Andrew Harrer | Bloomberg | Getty Images

Gary Cohn, director of the U.S. National Economic Council

Cohn did not signal how the GOP would specifically tweak the plan to win over House members. However, he said, “there’s a lot of progress being made.” He expects more when members of a House and Senate conference committee working on a final, joint bill meet this weekend.

Senate Majority Leader Mitch McConnell, R-Ky., and Majority Whip John Cornyn, R-Texas, have signaled that the treatment of state and local deductions could change in the final bill. The plans currently allow up to $10,000 in property tax deductions, but some lawmakers seek state and local income tax deductions, as well.

Expanding the state and local tax breaks creates another issue. Reducing the deductions will help pay for the tax cuts.

The GOP may have to consider other measures, like cutting the corporate tax rate to 22 percent rather than the planned 20 percent, to offset costs of the tweak.

Cohn on Friday did not answer whether he was open to a 22 percent corporate rate. On CNBC in September, he said 20 percent was a line in the sand. However, Trump last week expressed a willingness to give ground.

A tweet by Sen. Marco Rubio, R-Fla., also raised the revenue issue on Friday morning. He said there would be “problems” if the final bill weakens the child tax credit or raises the corporate rate without expanding tax breaks for parents.

Rubio