Q: What is the purpose of reconciliation?
A:
Budget reconciliation is a powerful fast-track process that can make changes in outlays, revenues, and/or the debt ceiling. The purpose is ultimately
to reconcile, or conform, tax and spending policies with the budget resolution. The budget resolution also provides the necessary components that allow Congress to proceed to a reconciliation bill (such as committee instructions).
Q: What are the advantages of using budget reconciliation?
A: The main advantage in using reconciliation is bypassing the Senate filibuster (thus requiring only 51 votes rather than 60 votes to begin debate on the bill and for final passage), allowing major bills to advance to the President’s desk by a simple majority vote in each chamber.
Q: Who sets the targets for reconciliation?
A: The reconciliation targets for spending, revenues, or deficits are set in the concurrent budget resolution. This resolution is produced by the House and Senate Budget Committees and must be adopted by both chambers of Congress. Once these targets are established by the budget resolution, they cannot be changed without amendment.
For this reason, the development and adoption of the budget resolution often takes a significant amount of time. It is important that the committees of jurisdiction that will receive reconciliation instructions are consulted by the House and Senate Budget Committees in developing the resolution to ensure their established targets are achievable and that the proper committees have received instructions.
Q: How specific do reconciliation instructions need to be?
A: Reconciliation instructions for changes in outlays or revenues require specificity on:
- The committee(s) being instructed in each chamber,
- The direction of the instruction (increasing or decreasing the deficit), and
- The dollar amount of the instruction (setting a ceiling or floor of the change).
In terms of the amount of the instruction, reconciliation targets can be fairly flexible to provide committees with room to adjust. For example, an instruction may be a low floor.
Reconciliation instructions pertaining to the debt limit require specificity on the number of the debt limit (rather than a suspension to a date).
Q: Why don’t I see the reconciliation policies in the budget resolution? How do I know what is going to be included?
A: The budget resolution only provides reconciliation instructions (targets) to the committees of jurisdiction, which are then charged with producing statutory language producing changes in law required to meet the instructions.
The policy provisions that make up the reconciliation proposal are not specified in the budget resolution anywhere – only the numbers are. The policy provisions are part of the legislative text that is produced
after the budget resolution and will ultimately be compiled into a larger legislative package known as the reconciliation bill. However, to write the budget resolution, the Budget Committees should have a general sense of what will be included in the next step so they can produce appropriate targets.
Q: How do I know what in my committee’s jurisdiction is eligible for reconciliation?
A: Policies that make changes in revenues (taxes) or outlays (
direct or “mandatory” spending) are eligible for reconciliation, with some exceptions like Social Security.
The Congressional Budget Office can provide the baseline of programs that are eligible for reconciliation within a committee’s jurisdiction. Committee staff should request this information.
Q: Who is a scorekeeper and why do they matter for reconciliation?
A: The Chairs of the House and Senate Budget Committees authoritatively guide their respective chambers on the fiscal impacts of all legislation. The Congressional Budget Office (CBO)
supports the work of the Budget Committees and all of Congress by providing non-partisan analysis and cost estimates. The role of the scorekeepers is to enforce the levels agreed to in the budget resolution. This is an important aspect of the reconciliation process because scoring is used to determine whether reconciliation instructions set forth in the budget resolution have been met.
Q: Who checks to ensure a reconciliation bill meets the instructions?
A: It is the job of the Budget Committees to ensure compliance with the instructions included in the concurrent budget resolution. Both the
House and
Senate Budget Committees do this once the instructed committees report their reconciliation recommendations to the Budget Committees. In the Senate, this is typically also checked as part of the Byrd Bath process.
Q: What is the Byrd Rule?
A: The Byrd Rule is comprised of six tests that apply as budget points of order in the Senate. It is intended to keep the reconciliation process focused on budgetary changes and protect the jurisdiction of Senate Committees. The Byrd Rule only applies in the Senate, and there is no equivalent in the House.
The Byrd Rule was
codified as Section 313 of the Congressional Budget Act in 1990.
Q: How does the Byrd Rule impact what can be included in a reconciliation bill and what are the six tests?
A:
The Byrd Rule sets limitations on what can be included in reconciliation. A provision violates the Byrd Rule if it:
- Does not produce a change in outlays or revenues or a change in the terms and conditions under which outlays are made or revenues are collected;
- Produces an outlay increase or revenue decrease when the instructed committee is not in compliance with its instructions;
- Is outside the jurisdiction of the committee that submitted the title or provision for inclusion in the reconciliation measure;
- Produces a change in outlays or revenues that is “merely incidental” to the non- budgetary components of the provision;
- Would increase the deficit for a fiscal year beyond the budget window covered by the reconciliation measure; or
- Recommends changes to Social Security.
The Byrd Rule is not self-enforcing. This means a Senator must proactively raise a point of order under a specific test of the Byrd Rule, directed at a specific provision.
The Byrd Rule means that many policy ideas are ineligible for inclusion in a reconciliation bill and could be stripped in the Senate. This often means that certain policies are preemptively left out when the reconciliation bill is first drafted.
Q: What is the Byrd Bath?
A: The Byrd Bath is a process through which the Senate reviews provisions of a reconciliation bill to ensure they comply with the Byrd Rule. This review is an ongoing a point-by-point discussion to adjudicate individual complaints of violations. All the text included in the reconciliation bill (even a single word) is subject to the Byrd Rule.
One of the most common challenges raised in the Byrd Bath is that a provision is “
merely incidental,” meaning the policy changes outweigh the budgetary impacts of the provision.
Q: What is the role of the Senate Parliamentarian?
A: The Senate Parliamentarian is a Senate staffer. It is their role in reconciliation to advise the Presiding Officer of the Senate on whether a provision violates the Byrd Rule. They do this largely relying on precedent but may also be required to produce novel opinions after hearing arguments from both sides.
The Senate Parliamentarian
does not ultimately determine whether to sustain a Byrd Rule point of order – the Presiding Officer does. However, it is often the case that the Presiding Officer defers to the advice of the Parliamentarian. If a point of order under the Byrd Rule has been raised, it is up to the full Senate to determine whether it is waived.
Q: When do Members of the House and their staff get to talk to the Senate Parliamentarian?
A: The Senate Parliamentarian is a Senate staffer. She will only speak directly to Senators and Senate staff.
Members of the House should coordinate with their colleagues in the Senate to try to get answers about the reconciliation process in the Senate.
Q: Where can we see the precedents on reconciliation?
A: The Senate Parliamentarian and the Senate Budget Committee keep records of precedents and rulings that pertain to the Byrd Rule and the reconciliation process. These records are not necessarily available to the public.
However, resources on reconciliation precedents are available. Two reports from the Senate Budget Committee are particularly notable:
- Byrd Rule Annotated (2005) provides background on the provisions of the Byrd Rule and certain precedents.
- The Reconciliation and Byrd Rule chapters of The Congressional Budget Process (2022) provide extensive discussions of Senate precedents, including publishing selected correspondence from the Senate Parliamentarian adjudicating Byrd Rule challenges.
Q: If something was in a previous reconciliation bill, does that mean it can be in future reconciliation legislation?
A: Not necessarily. Enforceable precedents in the Senate are only created by:
- Rulings by the Presiding Officer in response to points of order raised by a Senator;
- Votes of the Senate on the appeal of a ruling of the Presiding Officer; or
- Responses by the Presiding Officer in response to parliamentary inquiries.
Because Byrd Rule points of order are not self-enforcing and must be raised by a Senator, if a challenge is not raised against a provision, then no precedent is created.
There are many provisions of law that were enacted as a part of reconciliation bills that violate the Byrd Rule, but those points of order were waived or were simply not challenged. For example, the Byrd Rule itself was codified as a part of a reconciliation bill despite its provisions’ clear violation of the Senate’s Byrd Rule at the time.
Q: Can you do deregulation through reconciliation?
A: The precedents for deregulating in reconciliation legislation are limited. However, certain policy changes to reduce harmful and burdensome regulations that produce budgetary changes could be possible. Like with all provisions of a reconciliation bill, deregulatory provisions would be subject to the six Byrd Rule tests.
The
first test of the Byrd Rule means that any targeted rule would need to have an estimated fiscal impact (this differs from an economic impact), producing a change in outlays or revenues resulting from the policy. Changes in legislative or administrative processes through rules tend to be more difficult to address in reconciliation for this reason.
A particularly important Byrd Rule test related to changes in reconciliation is the “
merely incidental” test. Even if a provision in a reconciliation bill produces a change in outlays or revenues, the provision could still violate the Byrd Rule if the provision “is a policy change that substantially outweighs the budgetary impact of that change.” Provisions whose primary purpose is to modify behavior or overturn a court decision – regardless of budgetary effect – most likely will violate this section.
Lawmakers who want to reduce the regulatory burden on Americans should be encouraged to legislate creatively. For example, a proposal to repeal the Obamacare individual mandate that all Americans purchase government approved health insurance was
ruled as violating the merely incidental Byrd Rule test. However, a provision that reduced to $0 the penalty enforcing individual mandate was ruled in order.
Q: If getting rid of a regulation causes a change in spending, can that be used as an offset?
A: As described above, a proposal to make changes in regulatory must first satisfy all six tests of the Byrd Rule. This is rare, but changes to reduce regulatory burdens are not completely unprecedented.
If a regulatory change happens as a result of the provision in the reconciliation bill, the resulting reduction in outlays can be treated as an offset. One example of this was the
Continued Delay Of Implementation Of Prescription Drug Rebate Rule that was included in the Inflation Reduction Act.
It is important to note that CBO scores changes to finalized rules and proposed or interim rules differently; changes proposed rules are only counted at 50 percent of their final projected score.
Q: Can you cut discretionary spending in reconciliation bills?
A: In theory, discretionary funds that were
previously appropriated but are unspent and unobligated could be rescinded in reconciliation legislation. To include such a rescission in a reconciliation bill, the Appropriations Committees would have to receive reconciliation instructions in the budget resolution. The Appropriations Committees have not received reconciliation instructions since FY 1982, before the Byrd Rule was adopted. It is important to note that the rescissions of previously appropriated funds would have to produce a change in outlays, not just rescinding budget authority that was unlikely to be spent.
Preventing
future discretionary appropriations could be more difficult to include in a reconciliation bill. The
first test of the Byrd Rule is that provision, upon enactment, will produce a change in outlays or revenues. If appropriations have yet to be provided, the provision attempting to “cut” future appropriations is unlikely to actually produce a change in outlays upon enactment.
Q: Can you increase discretionary spending in reconciliation bills?
A: The American Rescue Plan Act and the Inflation Reduction Act
pushed new boundaries of including direct spending appropriations in reconciliation legislation for budget accounts and programs that have traditionally been funded by discretionary appropriations. This new spending was provided by the authorizing committees that have jurisdiction over the relevant programs and agencies.
It is worth keeping in mind that such spending provided in reconciliation bills would not be considered “discretionary.” By
definition, funding provided by a committee other than the Appropriations Committee is scored as
direct spending (sometimes called “
mandatory” spending).
Q: Can you include riders for discretionary spending (“none of the funds” language) in reconciliation bills?
A: Appropriations riders would be difficult to include in a reconciliation bill. The
first test of the Byrd Rule is that provision, upon enactment, will produce a change in outlays or revenues.
Q: Can you create discretionary spending caps in reconciliation bills?
A: No. A proposal to implement caps on discretionary spending were
ruled to violate the Byrd Rule in 1993. This was because a provision establishing a cap on future discretionary spending in a reconciliation bill does not, by itself, produce a change in outlays.
Q: Does reconciliation have to start in the House, or can both bodies move forward with reconciliation activities?
A: The reconciliation process first starts with adoption of a concurrent budget resolution. Both the House and Senate can advance their own version of the budget resolution, which includes reconciliation instructions, but they must concur on a single version to be adopted to continue with the reconciliation process.
According to
Article I, Section 7, Clause 1 of the Constitution, “All Bills for raising Revenue shall originate in the House of Representatives.” Thus, if the reconciliation bill makes changes to revenues, as with the Tax Cuts and Jobs Act, it must start in the House. Historically, the House has also asserted that the Origination Clause also requires bills spending revenues to start in the House.
However, the
House and
Senate can unofficially begin work early and simultaneously on reconciliation in order to establish a general set of shared goals and policy priorities.
Q: If a reconciliation bill is sent over from the House, what must happen for the Senate to consider it?
A: If the House sends over a reconciliation bill, each provision included must also be in compliance with the instructions to the Senate committees. If the concurrent budget resolution’s instructions to Senate committees are not also met in the bill, then it will not be treated as a reconciliation bill (and therefore be unable to access the fast-track process) in the Senate.
The Senate will also review the reconciliation bill for compliance with the Byrd Rule. If it is determined that a “preponderance” of provisions of the bill violate the Byrd Rule, it could lose privilege. However, the Senate Parliamentarian has never before advised that a House-passed reconciliation bill was ineligible for privilege.
Q: What is “vote-a-rama” and why does it happen?
A: Vote-a-rama is a Senate procedure that plays out on the Senate floor during consideration of a reconciliation bill. Senate debate time on reconciliation is limited to 20 hours under the Congressional Budget Act, and all germane amendments are in order. This can lead to dozens of amendments being offered and voted on during the vote-a-rama following the end of allowable debate time.
Often, Senators use amendments as a messaging opportunity once debate time has expired. Amendments offered during this time stack on top of each other, with the last-passed amendments prevailing. Final passage on the amended reconciliation bill follows vote-a-rama.
Q: How many years does a budget resolution cover?
A: Typically, a budget resolution covers a “budget window” of 10 years. Congress could draft a budget resolution to cover a different period of time. A budget resolution must cover at least five years.
Q: What is a reserve fund?
A: Reserve funds are written into the budget resolution as a tool for the House and Senate Budget Committee Chairmen to revise budgetary levels after adoption of the budget resolution, if certain conditions are met. They are ultimately tools to allow for flexibility in the legislative process. Often, reserve funds are intended to facilitate passage of legislation for a specific policy purpose.
A
deficit neutral reserve fund (DNRF) is a commonly used type of reserve fund that allows the levels in the budget resolution to be adjusted to facilitate passage of certain legislation, but requires those adjustments in the budget to not increase the deficit.
Q: How many reconciliation bills can a single budget resolution trigger?
A: A budget resolution can include reconciliation instructions that make changes in: (1) outlays, (2) revenues, and/or (3) the debt limit. This can be done in one, two, or even three separate reconciliation bills. However, it is often politically challenging to accomplish even a single reconciliation bill per budget resolution. Only three budget resolutions have produced multiple reconciliation bills that were signed into law.
At the same time, Congress can only use a single budget resolution’s instructions once. In other words, if a budget resolution includes instructions to make changes to outlays, the reconciliation process cannot be used multiple times for multiple reconciliation bills under that change spending.
It is possible to have multiple reconciliation bills in one
calendar year. This happened in 2017, which Congress considered Obamacare repeal and replace legislation under the FY2017 budget resolution and the Tax Cuts and Jobs Act under the FY2018 budget resolution.
Q: Can you amend a budget resolution that has already been adopted?
A: Yes.
Sec. 304 of the Budget Act provides that the House and Senate may adopt a concurrent resolution that revises (or affirms) a previously adopted budget resolution. The Senate parliamentarian has reportedly advised that a Sec. 304 revision to the budget resolution could include reconciliation instructions.
Q: How many reconciliation bills have there been?
A:
Twenty-three reconciliation bills have been enacted since 1980. Four other reconciliation bills have passed Congress, but were vetoed by the President.
