The Senate Finance Committee unveiled its proposed changes to the House-passed version of President Donald Trump’s “big, beautiful bill” on Monday night, which could put the two chambers on a collision course.

The Senate proposal reflects an extension of the Trump 2017 tax cuts, a debt limit increase to avoid a potential default later this summer and cuts to Medicaid.

Senators have been warned by House leaders to make minimal changes to the bill to ensure it can pass, given the razor-thin margin in the lower chamber. There’s also a number of senators who have conditioned their support for this bill on certain proposals in the Senate version of the bill.

Senate Republicans were meeting Monday night behind closed doors to go over the proposal.

Here are potential sticking points:

State and local taxes cap

The Senate legislation as drafted would keep the cap on state and local tax (SALT) deductions at $10,000 a year, while the House bill offers deductions up to $40,000 per year for those making less than $500,000 annually.

Some House Republicans have said they will vote no on the final bill if the deduction is any lower than the $40,000 they painstakingly negotiated.

Senators have said the $10,000 cap is currently just a placeholder, is not finalized, and is still being negotiated. Including a value allows the nonpartisan Congressional Budget Office to begin scoring the bill, but senators say the score could be modified as the SALT cap changes.

“I called the SALT guys and said, ’Hey, don’t go nuclear on us’,” said GOP Sen. Markwayne Mullin, who has been a key mediator between the House and Senate. “We had to put something there because we’re still negotiating back and forth.”

Medicaid

Similar to the House’s version, the Senate bill implements work requirements on Medicaid for “able bodied adults who are choosing not to work and do not have dependent children or elderly parents in their care.”

It also increases the frequency of eligibility verifications for able-bodied adults.

Able-bodied adults without dependents can work, participate in a work training program, enroll in school, or volunteer for 20 hours per week in order to receive taxpayer-subsidized Medicaid coverage.

It also ends taxpayer-funded Medicaid payments for abortion services and gender transition procedures and ensures immigrants lacking permanent legal status do not receive Medicaid benefits.

The biggest difference between the House and Senate plans to reduce “waste, fraud, and abuse” in Medicaid involve the provider tax, a state-imposed tax on health care providers used primarily used to help finance state Medicaid programs. Beginning in 2027, the Senate legislation would lower health care provider taxes in states that chose to expand Medicaid to 3.5%, down from 6% in the House bill, which means the burden on states to fund Medicaid could be higher under the Senate’s version.

Taxes

The Senate’s version permanently extends the Trump 2017 tax cuts, something Senate Republicans say is essential for businesses and families looking to plan for the future.

It also includes no tax on tips and no tax on overtime, a key Trump priority. The bill allows for deductions of up to $25,000 in qualified tips, and deductions of up to $12,500 in overtime. Meanwhile, the House’s version has no explicit cap on tips and overtime deductions.

The Senate’s bill would also offer seniors a new $6,000 tax deduction — more generous than the $4,000 deduction in the House version.

It would also make permanent various business and other tax incentives, including expensing of investments in equipment and research and development.

Child tax credit

The Senate bill pares back the child tax credit from $2,500 in the House version to $2,200 per child. Like the House, it excludes families with no income.

The bill also establishes savings accounts for newborns, similar to the House bill.

Debt limit

The Senate package includes a $5 trillion hike to the federal debt limit, higher than the House’s $4 trillion. Congress must act before early fall to raise the debt limit or risk default.

Republican Sen. Rand Paul has made clear he won’t support a package with a debt limit increase. The inclusion of this provision means Republicans will likely lose his vote.

Phasing out of IRA tax credits

The Senate version phases out solar energy tax credits that were part of the Inflation Reduction Act at a slower rate than the House version by allowing more projects to access the credits before they end.

The Senate bill also eliminates hundreds of billions of dollars of IRA subsidies, such as immediately ending the electric vehicle tax credit and its “lease loophole,” similar to the House bill.