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An Explanation of Reconcilation


President Clinton signing the Personal Responsibility and Work Opportunity Reconciliation Act into law in 1996 - one of 25 bills Congress has enacted using reconciliation over the last 47 years.

Right now, Democrats on various U.S. House and Senate committees are busy putting together their respective pieces of another COVID-19 spending relief package. The price tag for the legislation will be around $1.9 trillion – the amount President Joe Biden outlined when he took office last month.


With virtually no Republican support for a pandemic relief package with a price tag that high, a bill of this size would normally not pass a Senate evenly split between the two parties (but with Vice President Kamala Harris casting tie-breaking votes). It is simply far too generous for Republicans’ appetites, and, as it currently is being written, does not include policies the GOP favors, like liability protections for businesses, schools, and health care providers.


Under normal Senate procedure, the bill as currently contemplated would fall victim to the legislative filibuster, as Democrats wouldn’t be able to muster the 60 votes required to bring the measure to a vote on the Senate floor.


That’s precisely why Democrats have turned to a somewhat obscure mechanism – budget reconciliation – to get the bill through both chambers of Congress and, ultimately, to President Biden’s desk. As the U.S. House Committee on the Budget bluntly explains on its website, “Reconciliation is a tool – a special process – that makes legislation easier to pass in the Senate.”


Before getting to a full explanation of what budget reconciliation is, a distinction: budget reconciliation and the budget resolution are different. The House and Senate each passed a budget resolution last week. That document outlines spending for the next fiscal year, but it does not have the force of law because it is not signed by the president. It merely sets parameters. But while it’s an outline, it also can include some pretty forceful guidelines or edicts.


That outline can – but does not have to – include budget reconciliation rules. According to the Congressional Research Service, the legislative branch’s nonpartisan research arm, these rules are meant to “bring existing spending, revenue, and debt limit laws into compliance with current fiscal priorities established in the annual budget resolution.”


More importantly, as National Public Radio has explained, budget reconciliation allows “the party in control of Congress to pass most big-dollar legislation with a simple 51-vote majority in the Senate.” Zach Moller, a former staff member for the U.S. Senate Budget Committee, told NPR’s listeners to think of budget reconciliation as a “way to change spending and revenue that does not have to deal with the partisan gridlock.” Moller also said budget reconciliation is like “express lanes on the highway. It's a way to get you where you want to go, sometimes faster, oftentimes with less congestion.”


Budget reconciliation dates back to the post-Watergate era when lawmakers were growing increasingly worried about the size of the federal budget deficit. As Slate explained, Congress created reconciliation in 1974 as part of the Congressional Budget Act of 1974, but, at that point, the rules were merely meant to be “a minor tool to smooth out kinks in the annual budget process.”


“Soon,” however, “crafty senators soon realized they could use [budget reconciliation to] speed their bills past the chamber’s many procedural hurdles, even though that had never been the intention behind it.”


According to the National Council of State Legislatures, reconciliation “smooths” the Senate’s cumbersome policymaking process by limiting Senate debate on the reconciliation bill to 20 hours. In other words: the time limit means there is no way to filibuster the legislation since senators cannot simply talk forever, as they can for virtually any other legislation up for debate in the Senate.


Reconciliation also limits debate on amendments that lawmakers offer to the bill. It does not limit the number of amendments – just the time senators have to debate them. The result of that rule is a series of rapid-fire amendment votes often referred to as a “vote-a-rama.”


There are several actions that have to happen, however, before budget reconciliation legislation ever gets to the House and Senate floors.


There are roughly six steps to the reconciliation process: 1) Adoption of the budget resolution; 2) Committee work on legislation that responds to directives in the budget resolution; 3) House and Senate Budget Committees assemble the committees’ bills together in one piece of legislation; 4) Each chamber’s respective bill is debated and voted on by the House and Senate; 5) Differences in the House and Senate bills are negotiated by a conference committee; and 6) The final bill is voted on by the House and Senate and signed into law or vetoed by the president.


As noted in the introduction, lawmakers this week began the second stage of the process. Democrats are hoping to complete each of these steps and pass the $1.9 trillion COVID relief bill into law no later than mid-March to avoid the expiration of enhanced unemployment benefits. It’s an aggressive timeline, at least by congressional standards.


The process of budget reconciliation has been altered over the last 47 years.


Adopted in 1985 and enacted into law in 1990, the Byrd rule, named for former West Virginia Sen. Robert Byrd (D), “prohibits senators from including provisions in reconciliation bills that are unrelated to deficit reduction goals.” According to the Congressional Research Service, the rule was adopted “in response to concerns that committees were including recommendations in their reconciliation submissions that were extraneous to achieving the budgetary goals established in the budget resolution.”


In other words, Sen. Byrd was worried about how extensively his colleagues were using reconciliation rules as an end-run around the Senate’s typical process for considering legislation.


According to the nonpartisan organization Center Forward, the Byrd rule also was meant to prevent “reconciliation bills from increasing the deficit beyond the years covered by the budget resolution, making any changes to Social Security, or enacting policies that only incidentally affect the budget.” The Byrd rule is why, for example, the 2001 tax cuts passed under reconciliation rules and signed into law by President George W. Bush had a 10-year expiration date. Without that mechanism, the tax cuts would have increased “the deficit beyond the budget resolution’s time horizon.”


Sen. Byrd’s efforts to limit use of the reconciliation probably have constrained the use of the process – somewhat.


Budget reconciliation has been used 25 times over the last 47 years to move legislation through Congress, with a fairly successful track record. Twenty-one bills that were passed by Congress were signed into law and only four were vetoed. President Bill Clinton vetoed Republicans’ Balanced Budget Act in 1996 and GOP-led tax cut bills in both 1999 and 2000. In 2016, President Barack Obama vetoed reconciliation legislation passed by the Republican Congress that would have repealed parts of the Affordable Care Act.


Budget reconciliation was first used successfully in December 1980, one month after President Jimmy Carter lost his reelection bid, to enact an $8.3 billion deficit reduction bill.


President Carter’s successor, President Ronald Reagan, did not wait long to use the tool. In August 1981, he signed reconciliation legislation that aimed to reduce the deficit by $130.6 billion over three years by cutting spending for health and health programs, food stamps, dairy price supports, and student loans.


President Bill Clinton’s welfare reform package made it through Congress by using budget reconciliation rules and, as noted above, Republicans used budget reconciliation to pass major tax cuts in 2001. The party used budget reconciliation again in 2003 and 2006 to pass revenue reductions. Republicans and President Donald Trump also used reconciliation rules to get the 2017 corporate and individual tax cuts through Congress and signed into law.


Additionally, as Vox explained, “Reconciliation was critical to the Affordable Care Act’s passage.” Back in 2009, the Democrat-controlled House and Senate had passed separate bills for health care reform, “but not yet come up with a final compromise when Republicans won a special Senate election in Massachusetts to replace the late Ted Kennedy.” With that election result, “Democrats lost a 60-vote supermajority, and suddenly it looked impossible to finish health care reform through regular order.” So, “to get their plan to President Obama’s desk, House Speaker Nancy Pelosi passed the Senate version of health care reform (the ACA), and Congress then used a reconciliation bill to make some technical changes to the plan, which otherwise would have been made in the conference negotiations between the House and Senate.”


If the budget reconciliation makes life easier in the Senate, why doesn’t the party in power use it more?


Call it the ghost of Sen. Byrd.


The senator was a staunch guardian of Senate rules. Indeed, when Democrats considered eliminating the legislative filibuster in 2010, Sen. Byrd wrote a letter to his colleagues. He said, “I am sympathetic to frustrations about the Senate's rules, but those frustrations are nothing new … I believe that efforts to change or reinterpret the rules in order to facilitate expeditious action by a simple majority, while popular, are grossly misguided.”


Vox reporter Dylan Scott said the reason lawmakers do not use reconciliation more is that they are “very skittish about getting rid of the filibuster … and having reconciliation allows them to avoid it. They can pass some policies with a simple majority without opening the door for any and all bills to be subject to a mere 50-vote threshold.”


With some Democrats clamoring for a more active legislative session under the new administration, however, we will have to see if that institutionalism persists.

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