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Procedural Profile: A Guide To Budget Reconciliation
01/10/2017 Budget Andrew S
keywords: Budget Reconciliation

Congressional procedures can be confusing, but a basic understanding of them makes it significantly easier to follow the workings of the Federal government. One key procedure is budget reconciliation, a powerful but rarely-used legislative measure:

Review of Reconciliation

Created in 1974 under the Congressional Budget Act and first used in 1980, reconciliation is a tool to move budget legislation through Congress. Bills submitted under reconciliation cannot be filibustered, allowing the Senate to pass legislation without a supermajority. Reconciliation also limits the number of amendments that a bill can have, speeding up the legislative process.

Because reconciliation bypasses the ordinary Congressional process, Congress can only use it for certain types of legislation. A provision is not eligible for reconciliation if it:

  • Doesn’t change the level of government revenue or spending
  • Changes spending or revenues in a way that is only incidentally related to its non-fiscal provisions
  • Will increase the deficit after the period that reconciliation bills cover, usually 5 years
  • Modifies Social Security
  • Exceeds the jurisdiction of the committee that included it

Congress can only use budget reconciliation for bills that affect revenues, spending, or the debt ceiling, and it can only use it for each of these measures once per year. If a reconciliation bill covers two of these issues at the same time, Congress cannot use it again for either of them.

Past Provisions

Because of the restrictions on its use, Congress has only used budget reconciliation 20 times in the more than 40 years since it was created. Key bills passed through reconciliation include:

  • The Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985, which provides workers with temporary health insurance after they leave their jobs.
  • The Omnibus Budget Reconciliation Act of 1990, which raised taxes. President George H.W. Bush signed this, contradicting his promise that there would be “no new taxes.”
  • The Omnibus Budget Reconciliation Act of 1993, which raised taxes and paved the way for a Federal budget surplus by the end of the 1990s.
  • The Economic Growth And Tax Relief Reconciliation Act of 2001, also known as the first of the “Bush tax cuts,” which dramatically reduced Federal taxes.
  • The Health Care And Education Reconciliation Act of 2010, which allowed the Senate to amend the Patient Protection And Affordable Care Act without facing a filibuster

At present, Republicans control both houses of Congress and the White House, but do not have enough votes in the Senate to overcome a Democratic filibuster. Congress is thus likely to continue using budget reconciliation in the coming years.

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