The Senate is now considering a climate, health-care and tax measure with $433 billion in new spending. With no Republican support, Democrats have turned to a procedural process known as “reconciliation” — a budget tool that avoids a potential filibuster.
Reconciliation has cleared the way for congressional measures nearly two dozen times since it was first used in 1980. But the Congressional Budget Act (CBA) of 1974 that created reconciliation comes with some tricky rules. Here’s what you need to know about the process and potential pitfalls ahead.
What the heck is reconciliation?
Congressional Democrats enacted the Congressional Budget Act over President Richard M. Nixon’s veto in 1974. That law gave Congress new power in federal budgeting, including the ability to map out a budget blueprint and to change federal laws to ensure Congress can meet its revenue and spending goals.
The law originally directed Congress to write two budget resolutions over the course of a fiscal year. The first resolution would propose an annual budget blueprint, which the second would refine. Budget resolutions set broad parameters for the annual federal budget, but they do not have the force of law. Instead, the CBA authorized an optional “reconciliation” bill that would make the actual changes in law to bring federal revenue and outlays in line with the second budget blueprint. For example, if the budget blueprint called for more Medicaid spending to provide health care for the poor, lawmakers might use the reconciliation bill to revamp the federal tax code to help pay for the increased health-care spending.
Congress rewrote the budget law in 1985 to eliminate those second budget resolutions. But reconciliation remained on the books for changing federal laws to meet congressional budget goals. Lawmakers originally viewed reconciliation as a tool for reducing federal deficits, but Congress over the years has stretched it in ways that often increase the deficit. For example, the GOP-led Congress in 2017 exploited reconciliation to cut corporate taxes, estimated to cost the government nearly $2 trillion in revenue. And in 2021 Democrats adopted the nearly $2 trillion economic stimulus plan through reconciliation. This time, to secure Sen. Joe Manchin III (D-W.Va.)’s vote, the measure would actually reduce the deficit — by raising taxes on corporations, going after tax cheats and revamping how Medicare pays for prescription drugs.
Why can’t reconciliation be filibustered?
Most legislative measures in the Senate require a 60-vote supermajority to cut off debate and advance to a vote. When a Senate majority fails to get 60 votes to end debate, we typically say that a measure has been filibustered. But senators can’t filibuster reconciliation measures because the CBA limits debate to 20 hours, evenly divided between the parties.
The limit, however, doesn’t include time spent considering amendments. That means that after debate time expires, senators typically engage in a “vote-a-rama” — often voting on amendments into the wee hours of the night and ending only with the consent of all 100 senators. The Senate then moves to a final simple majority vote on the measure.
What lies ahead?
Both the House and Senate last year — with only Democratic votes — adopted the budget resolution that set the parameters for a reconciliation bill. House Democrats moved first, passing a $2.2 trillion reconciliation bill last November dubbed “Build Back Better.” But Manchin torpedoed the bill last December — leading to on and off negotiations this year to pare back the reconciliation measure to his and the likings of Sen. Kyrsten Sinema (D-Ariz.), another potential holdout. With the Senate evenly split 50-50, Democrats could not afford any defections.
To the shock of even Washington insiders, Democrats finally coalesced last month around that revamped bill — renamed the Inflation Reduction Act. Democrats have planned an initial vote to call up the measure Saturday, with Vice President Harris standing by should her vote be needed to break a tie. If all goes according to plan, the Senate then conducts up to 20 hours of debate, moves into the vote-a-rama, and heads to final passage votes by Monday at the latest. Observers expect the House would then pass the measure by week’s end, over the objections of every Republican. House leaders wouldn’t have to worry about a vote-a-rama, since House rules empower a majority to preclude amendments if they wish.
So what’s the catch?
Already by the 1980s, Sen. Robert Byrd (D-W.Va.) and others believed that majority parties were abusing reconciliation’s filibuster ban to cram it with provisions unrelated to reducing federal deficits. Thus was born the CBA’s Byrd Rule to prohibit what the law calls “extraneous” matter — typically policy changes that do not have a direct and substantial impact on the federal budget.
The Byrd Rule sets a six-pronged test of what counts as “extraneous.” But applying the law can be tricky — not least because one of the prongs is vaguely worded, leading senators to rely on the chamber’s nonpartisan parliamentarian to advise on whether a provision complies.
Before a reconciliation bill goes to the Senate floor, supporters and challengers of a provision typically try out their arguments for the parliamentarian, who gives the bill a “Byrd bath” to scrub provisions she advises violate the Byrd Rule. And once a reconciliation is on the floor, the presiding officer historically relies on the parliamentarian’s advice to determine Byrd rule violations in parts of the bill or newly proposed amendments. Senators can challenge a ruling, but it takes 60 votes to waive the Byrd rule or to overturn a ruling.
The Byrd bath has already been underway for several weeks to ensure that key parts of the bill comply with the Byrd Rule, and the parliamentarian has now blessed key climate and prescription drug plans, dinging just one part of the drug pricing proposals.
Once the bill makes it to the floor, Republicans may offer challenging amendments, in an effort to strip core provisions and force Democrats to cast votes that might be used against them in midterm campaigns. But the Byrd Rule could trip up amendments, and Republicans would be unlikely to muster the necessary 60 votes to waive the rule. Progressive Democrats could also try to beef up the bill, but they are unlikely to succeed.
Finally, even if the GOP manages to secure amendments, Democrats would have the chance to wipe out any changes with a final “substitute” known as a “wraparound” amendment. But Manchin has vowed never to vote for such do-overs again, so everything depends on keeping all 50 Democratic senators on the same page.