Reconciliation (United States Congress)
Budget reconciliation is a special parliamentary procedure of the United States Congress set up to expedite the passage of certain federal budget legislation in the Senate. The procedure overrides the Senate's filibuster rules, which may otherwise require a sixty-vote supermajority for passage. Bills described as reconciliation bills can pass the Senate by a simple majority of fifty-one votes or fifty votes plus the vice president's as the tie-breaker. The reconciliation procedure also applies to the House of Representatives, but it has minor significance there, as the rules of the House of Representatives do not have a de facto supermajority requirement. Because of greater polarization, gridlock, and filibustering in the Senate in recent years, budget reconciliation has come to play an important role in how the United States Congress legislates.
Budget reconciliation bills can deal with mandatory spending, revenue, and the federal debt limit, and the Senate can pass one bill per year affecting each subject. Congress can thus pass a maximum of three reconciliation bills per year, though in practice it has often passed a single reconciliation bill affecting both spending and revenue. Policy changes that are extraneous to the budget are limited by the Byrd rule, which also prohibits reconciliation bills from increasing the federal deficit after a ten-year period or making changes to Social Security. Reconciliation does not apply to discretionary spending, which is instead managed through the annual appropriations process.
The reconciliation process was created by the Congressional Budget Act of 1974 and was first used in 1980. Bills passed using the reconciliation process include the Consolidated Omnibus Budget Reconciliation Act of 1985, the Personal Responsibility and Work Opportunity Act of 1996, the Economic Growth and Tax Relief Reconciliation Act of 2001, the Health Care and Education Reconciliation Act of 2010, the Tax Cuts and Jobs Act of 2017, the American Rescue Plan Act of 2021, the Inflation Reduction Act of 2022, and the One Big Beautiful Bill Act.
Process
Reconciliation process
Reconciliation is an optional part of the annual congressional budgetary process. Typically, the reconciliation process begins when the president submits a budget to Congress early in the calendar year. In response, each chamber of Congress begins a parallel budget process, starting in the Senate Budget Committee and the House Budget Committee. Each budget committee proposes a budget resolution setting spending targets for the upcoming fiscal year; in order to begin the reconciliation process, each house of Congress must pass identical budget resolutions that contain reconciliation instructions. Other committees then approve bills that meet the spending targets proposed by its respective budget committees, and these individual bills are consolidated into a single omnibus bill. Each house of Congress then begins consideration of its respective omnibus bills under its respective rules of debate.The reconciliation process has a relatively minor impact in the House of Representatives, but it has important implications in the Senate. In contrast to most other legislation, senators cannot use the filibuster to indefinitely prevent consideration of a reconciliation bill, because Senate debate over reconciliation bills is limited to twenty hours. Thus, reconciliation bills only require the support of a simple majority of the Senate for passage, rather than the sixty-vote supermajority required to invoke cloture and defeat a filibuster. Senators could theoretically prevent passage of a reconciliation bill by offering an unending series of amendments in a process colloquially known as a "vote-a-rama," but, unlike the modern filibuster, senators introducing these amendments must stand up and verbally offer the amendments.
Though the reconciliation process allows a bill to bypass the filibuster in the Senate, it does not affect other basic requirements for the passage of a bill, which are laid out in the Constitution's Presentment Clause. The House and Senate still must pass an identical bill and present that bill to the president. The president can sign the bill into law or veto it, and Congress can override the president's veto with a two-thirds majority vote in both houses of Congress.
Byrd Rule
The Byrd Rule, named for Senator Robert Byrd, was adopted in 1985 and amended in 1990. The Byrd Rule defines a provision to be "extraneous"—and therefore ineligible for reconciliation—in six cases:- If it does not produce a change in outlays or revenues;
- if it produces an outlay increase or revenue decrease when the instructed committee is not in compliance with its instructions;
- If it is outside the jurisdiction of the committee that submitted the title or provision for inclusion in the reconciliation measure;
- If it produces a change in outlays or revenues which is merely incidental to the nonbudgetary components of the provision;
- If it would increase the deficit for a fiscal year beyond those covered by the reconciliation measure ; or
- if it recommends changes in Social Security.
In 2001, Senate Majority Leader Trent Lott fired Parliamentarian Robert Dove after bipartisan dissatisfaction with his rulings, and replaced him with the previous Democratic appointee, Alan Frumin.
Other restrictions
Congress can pass up to three reconciliation bills per year, with each bill addressing the major topics of reconciliation: revenue, spending, and the federal debt limit. However, if Congress passes a reconciliation bill affecting more than one of those topics, it cannot pass another reconciliation bill later in the year affecting one of the topics addressed by the previous reconciliation bill. In practice, reconciliation bills have usually been passed once per year at most.Other restrictions have also been applied to reconciliation. For example, from 2007 to 2011, Congress adopted a rule preventing reconciliation from being used to increase deficits.
History
Origins
Because of growing concerns over deficits and presidential control of the budget process, many members of Congress sought to reform the congressional budgetary process in the early 1970s. Charles Schultze, a former director of the Bureau of the Budget, suggested a new process in which Congress would exercise greater control of the budget process by setting overall spending targets. Schultze proposed that Congress create a new type of legislation, the "final budget reconciliation bill," to ensure that the various budget-related bills passed by each congressional committee collectively fell within the overall spending targets passed by Congress. Schultze's ideas were adopted by Congress with the passage of the Congressional Budget Act of 1974, which established the reconciliation process, the Congressional Budget Office, and standing budget committees in the House and Senate. Under the original design of the Budget Act, reconciliation was expected to apply to revenue and spending within a single fiscal year.Although reconciliation was originally understood to be for the purpose of either reducing deficits or increasing surpluses, the language of the 1974 act refers only to "changes" in revenue and spending amounts, not specifically to increases or decreases. Former parliamentarian of the Senate Robert Dove noted that in 1975 Senator Russell Long convinced the parliamentarian to protect a tax cut bill. That bill was vetoed by President Gerald Ford.
In the late 1970s, the process of reconciliation was largely ignored, in part because reconciliation could only be used during a brief window. In 1980, Congress amended the reconciliation process, allowing it to be used at the start of the budget process. Later that year, President Jimmy Carter signed the first budget bill passed using the reconciliation process; the bill contained about $8 billion in budget cuts.
Ronald Reagan
Reconciliation emerged as an important legislative tool during the Reagan administration. A coalition of Republicans and conservative Democrats used the reconciliation process to pass the Omnibus Budget Reconciliation Act of 1981, which contained various spending cuts. In addition to bypassing the filibuster, the reconciliation process allowed Congress to pass these spending cuts through a budget resolution and a single reconciliation bill, rather than through the traditional method of passing several bills addressing each area of spending.In the early 1980s, Congress passed reconciliation bills containing provisions that did not directly relate to the budget. For example, one reconciliation bill decreased the number of individuals on the Federal Communications Commission. In response, Senator Robert Byrd led passage of an amendment to strike "extraneous" amendments from reconciliation bills, and Congress permanently adopted the Byrd Rule in 1990. The reconciliation process remained an important tool of congressional majorities even after the passage of the Byrd Rule.
George H. W. Bush
During the presidency of George H. W. Bush, it was used to pass the Omnibus Budget Reconciliation Act of 1990, which reduced federal spending and increased federal revenue.Bill Clinton
After taking office in 1993, Democratic President Bill Clinton won passage of his proposed budget, the Omnibus Budget Reconciliation Act of 1993 through reconciliation. In 1996, he signed another major reconciliation bill, the Personal Responsibility and Work Opportunity Act of 1996. In 1997, Congress passed the Taxpayer Relief Act of 1997, a reconciliation bill that reduced taxes and increased the federal budget deficit. The tax cut bill was paired with the Balanced Budget Act of 1997, which reduced spending, and the two bills were signed into law by President Clinton.In 1999, the Congress used reconciliation to pass the Taxpayer Refund and Relief Act of 1999, which represented the first time that the reconciliation process was used to increase deficits without a companion bill that reduced spending. It was vetoed by President Clinton. A similar situation happened in 2000, when the Senate again used reconciliation to pass the Marriage Tax Relief Reconciliation Act 2000, which was also vetoed by Clinton. At the time, the use of the reconciliation procedure to pass such bills was controversial.