Tax Reform cleared a major procedural hurdle last night when the Senate passed a budget 51-49. Perhaps more important, Senate and House Republicans also reached an agreement on how to reconcile the differing House and Senate budget bills, which may eliminate the need for a conference committee. As expected, the Senate’s version of the budget contains instructions for tax reform, opening the door for Republicans to pursue tax reform with a bare majority through the budget reconciliation process.

The Senate budget resolution does provide some interesting (although not unexpected) clues as to the content of tax reform legislation.

For example, the Senate’s budget resolution allows the tax reform bill to add up to $1.5 trillion to the deficit over 10 years, which House Republicans confirmed would carry through to the final negotiated resolution. The Senate debated the fate of the state and local tax deduction, but ultimately kicked the can down the road, adopting an amendment that would allow for a reduction in the SALT deduction to “help middle class Americans” and rejecting both (i) a point of order by Senator Chuck Schumer (D-NY) that would have required Republicans to clarify intentions and (ii) an amendment by Senator Maria Cantwell (D-WA) that would have forced Republicans to vote on a flat repeal of the SALT deduction.

Senators also approved a handful of amendments to set up deficit neutral reserve funds for specific tax policy goals – for example, tax cuts for working-class families, incentives for businesses to create new jobs and enhanced tax relief for parents, which may include a modified child tax credit. However, some or all of this may be omitted in the final, reconciled budget resolution.

So, where does this leave tax reform? House Ways and Means Chairman Kevin Brady (R-TX) suggested earlier this week that we should expect to see full bill text as soon as next week. Speaker Paul Ryan (R-WI) is still publicly optimistic, saying that he expects the House to vote on the bill next month.