Elon Musk and House Speaker Mike Johnson are Talking

House Speaker Mike Johnson said he is fighting to maintain the new $40,000 cap on state and local deductions in the draft tax bill now before the Senate, where Republicans are seeking to enact a less generous break.

“I am certainly trying to hold to that number,” Johnson said on Bloomberg TV on Thursday. “I hope they tolerate it.”

Johnson’s comments came a day after Senate Finance Committee Republicans met with President Donald Trump at the White House on changes to the giant tax bill, a meeting where they pitched making the SALT cap less generous.

Senate Majority Leader John Thune told reporters that given there are no Senate Republicans fighting for an expanded SALT cap, he expects the Senate to change the House proposal.

Johnson said he has told senators that the SALT provision is key to the bill winning approval when it comes back for a final vote in the House later this summer given dueling priorities within the slim Republican majority.

“I told my friends I am crossing the Grand Canyon on a piece of dental floss,” he said.

Johnson in the interview defended another controversial piece of the tax bill, a so-called “revenge tax” that would hit foreign investors in the US with a surcharge if they are domiciled in countries with “unfair” tax regimes.

“I think that is good policy for us,” Johnson said of the Section 899 tax provision. But, he acknowledged senators are discussing tweaking the provision. One change under discussion is to further clarify that portfolio interest such as on Treasury bond investments is not covered by the surcharge.

The speaker said that despite the ongoing policy wrangling with the Senate and the public opposition from billionaire GOP ally Elon Musk, he expects the bill to pass by July 4. Johnson said that trying to raise the debt ceiling outside of the tax bill, which can pass the Senate with a simple majority, would be difficult and require concessions to Democrats to win a bipartisan super-majority in the Senate.

The Senate is looking to use the bill to raise the US borrowing limit by $5 trillion. That has caused Senator Rand Paul to vow to vote no on the bill and for three other conservatives to seek deeper spending cuts.

“We are going to stay on track,” Johnson vowed.

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