With [slim] majorities in the House and Senate, Democratic leaders may well use a special legislative process called “reconciliation” to quickly advance high-priority fiscal legislation. Created by the Congressional Budget Act of 1974, reconciliation allows for expedited consideration of certain tax, spending, and debt limit legislation. In the Senate, reconciliation bills aren’t subject to filibuster and the scope of amendments is limited, giving this process real advantages for enacting controversial budget and tax measures. This paper addresses some frequently asked questions about reconciliation.
How Often Have Policymakers Used Reconciliation?
*Policymakers have enacted 21 budget reconciliation bills since 1980, the first year they employed the process; Congress approved four other measures but the President vetoed them.[1] Policymakers used reconciliation to enact major spending cuts during President Reagan’s first year in office, several deficit-reduction packages during the 1980s and 1990s, welfare reform in 1996, and the large Bush tax cuts in 2001 and 2003. More recently, reconciliation was used in 2010 to amend the Affordable Care Act and modify the federal student loan program,[2] and in 2017 to enact large tax cuts. Republican majorities also twice attempted to use the reconciliation process to repeal key elements of the Affordable Care Act; President Obama vetoed the first attempt, in 2016, and the second attempt, in 2017, failed to pass in the Senate.
What Kinds of Changes Can a Reconciliation Bill Include?
The Congressional Budget Act permits using reconciliation for legislation that changes spending, revenues, and the federal debt limit. On the spending side, reconciliation can be used to address “mandatory” or entitlement spending[...]. Mandatory spending is determined by rules set in ongoing authorizing laws, so changing spending usually requires amending those laws.
How Many Reconciliation Bills May Congress Consider Each Year?
Under Senate interpretations of the Congressional Budget Act, the Senate can consider the three basic subjects of reconciliation — spending, revenues, and the debt limit — in a single bill or multiple bills, but a budget resolution can generate no more than one bill addressing each of those subjects.
In 2017, however, Congress was able to take up an additional reconciliation bill by passing two budget resolutions: one for fiscal year 2017 (the fiscal year already underway, for which a budget resolution had not yet been adopted) and then another for fiscal year 2018 (the fiscal year that would begin on October 1, 2017). [...]
There will be an opportunity to repeat this process in 2021, since no fiscal year 2021 budget resolution was adopted in calendar year 2020.
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