The race to the finish line has begun for the OBBB. President Trump has set a clear deadline of July 4.

First the timing, then the sticking points.

From what we understand, Senate staffers from both parties have been meeting with the parliamentarian for the last two days to get rulings on the Byrd rule. Meanwhile, several Senate committees are expected to release updated texts as soon as today, which would take into account the parliamentarian's rulings, which have been coming in.

All this could lead to a full bill being out as early as Thursday and being debated on the floor Friday.

This is a very tight set of deadlines, since Senators don't agree with each other and don't agree with the House.

Let's recap.

The big one is Medicaid. In the House bill, work requirements apply to able-bodied adults without dependents, but exempt all parents with dependent children. The Senate version expands work requirements to include parents of children ages 15 and older, requiring them to work, volunteer, go to school or participate in job training for at least 80 hours a month. Furthermore, under the Senate version, existing state-directed payment reimbursements would be cut by 10% every year until they reduce to Medicare rates for expansion states, and capped at 110% of Medicare rates for non-expansion states. The Senate version would cut deeper and also treat expansion vs non-expansion states differently. The Senate uses the money to pay for business tax cuts, including the research and development deduction, and provisions on debt interest writeoffs and expensing for new equipment. These are good policies, but the politics sting the eyes.

SEE ALSO: The Political Consequences of Medicaid Cuts

Provider taxes. This is the big issue within the big issue. Let's recap. Your writer needed a recap, so we're going to give you one.

Medicaid provider taxes are state-imposed fees on health care providers (like hospitals, nursing homes, managed care organizations) that are used to help finance the state's share of Medicaid program costs. Medicaid is jointly funded by the federal government and states. States cover the upfront cost of care and then are reimbursed by the federal government for at least 50%. The provider tax is a state-imposed fee on hospitals and other health care providers to help fund a state's share of the Medicaid program. It has unintended consequences, because when states increase taxes on providers to fund Medicaid and those providers then spend the money on Medicaid, the state gets a reimbursement from the Federal government. A good chunk of the money raised goes toward supporting rural hospitals, which often serve a higher share of low-income and Medicaid patients. It's a key financing source for rural hospitals, which tend to have much thinner operating margins.

The House bill seeks to lower federal costs by freezing states' provider taxes at current rates and prohibiting them from establishing new provider taxes. Meanwhile, the Senate draft would effectively cap provider taxes at 3.5% by 2031, down from the current 6%, but only for the states that expanded Medicaid under the Affordable Care Act. The cap would be phased in by lowering it 0.5% annually, starting in 2027.

The reason why some Republicans don't like this is that, remember, these taxes go straight to funding Medicaid, and so they go back to providers with an additional 50% match from the Federal government. Senators worry particularly on the impact on rural hospitals, who are more dependent on these fees and have lower margins.

The emerging compromise idea would be to create a kind of transition fund specifically for rural hospitals.

Energy tax credits. As we explained last week, there is a key change in the language of the Senate version versus the House version. As we put it: "the House bill sets a 2028 deadline of 'placed in service' for projects to be eligible for the credits; meanwhile, the Senate Finance text is 'construction begins' which not only is a more nebulous criterion in practice (what does it mean, legally, for construction to 'begin'? One person has put a shovel in the ground? Grounds have been marked out? A survey has been conducted? You can bet lawyers will be paid a lot of money to answer that question in a certain way), but extends the deadline by 4 years because of 'safe harbor' provisions extended to projects whose construction has 'begun'. This takes us to 2029-2031, which, of course, is after the end of the Trump Administration, which raises the prospect that, especially under a Democrat administration, the credits would again be extended indefinitely (and indeed, this is probably the drafters' true intent, with the deadlines put in there for PR and budget scoring reasons)." The House version would also end the transferability of credits by 2027, while the Senate version would maintain the transferability of all credits that are maintained.

As we have said repeatedly, this is both bad policy and bad politics. It's bad policy because wind and solar energy doesn't work, and at a time of a deluge of red ink, spending money on such boondoggles is a bad idea. It's bad politics because President Trump ran on ending those credits, and they don't benefit constituencies that are friendly to the Republicans. But the Senate, as of yet, does not seem willing to budge—but the House Freedom Caucus, at least, is incensed, and President Trump has come out publicly against renewal. So, we will see.

SALT. Ah, yes, SALT. Well, here, obvioulsy, you have a difficulty. House members from blue states feel very strongly about SALT. There are no Republican Senators from blue states. So they feel very differently about the issue. But the House SALT Caucus is determined, and has enough votes to potentially sink the bill. From what we hear, Senate GOP leadership is actively negotiating with the House SALT Caucus to come up with a compromise.

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#Terminator — Interesting paper from RAND on how DOD could use AI to reform its…HR department. That also matters!