Tax reform was one of President Trump's key campaign promises, and he's made it clear that it continues to be a high priority for him. However, aside from a few tax-related provisions in the healthcare reform bills, nothing much has happened legislatively regarding tax reform. The delay stems chiefly from the nature of the budget reconciliation process.

Budget reconciliation

The GOP is determined to pass healthcare reform this year, and in order to do so, it invoked the reconciliation process from the Congressional Budget Act of 1974. The reconciliation process allows bills to pass much more speedily through the Senate, because it limits debate to 20 hours and thereby blocks the option of a Democratic filibuster. Without the reconciliation process, the GOP would need 60 votes to block a filibuster -- and given the party's narrow majority in the Senate, it would almost certainly not be able to muster that many votes.

Taxes spelled out in blocks

Image source: Getty images.

Reconciliation drawbacks

While the reconciliation process does allow budget-related bills to zip through the Senate much more speedily than the average bill, it has some important limitations. The one that's causing delays for tax reform is that Congress can only consider three items per fiscal year under budget reconciliation. Tax reform and healthcare reform overlap this requirement, so the GOP's plan is to pass the healthcare reform bill, pass the 2018 budget, and then introduce tax reform as a budget reconciliation bill for the new budget. Thus, they can't even get started on tax reform until healthcare reform is complete.

The outlook on healthcare reform

The plan to get both healthcare reform and tax reform through Congress this year depended on a speedy passage of the healthcare reform law. Indeed, the Trump administration intended to get the 2018 budget passed in May or June so that it could begin working on tax reform immediately thereafter.

However, healthcare reform has been much more controversial than the GOP originally expected, resulting in a good deal of internal party debate and compromise to come up with a version that can muster enough votes to pass. And because the House version of healthcare reform includes significant differences from the version currently being debated in the Senate, Congress will need to reconcile the two bills in order to turn healthcare reform into law -- a process that will no doubt require yet more debate and turmoil. As a result, the original timeline for tax reform has been blown out of the water.

Tax reform in 2017?

At this point, with so much yet to do before tax reform can even be introduced in Congress, it seems unlikely that anything legislative will happen this year. However, Gary Cohn, the director of the National Economic Council, recently declared on MSNBC that Congress would begin discussing tax reform after its return from the August recess whether or not the healthcare reform bill has passed at that point. It's clear that whatever happens with healthcare, tax reform continues to be a major priority for President Trump and the GOP.

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