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Jack Jacobson Ken Salomon March 10, 2015

A budgetary process by which Congress is able to pass legislation in an expedited manner in order to bring mandatory entitlement spending levels in line with the current budget resolution. Reconciliation has been used to alter funding levels for such programs as student loans, Social Security, Medicare, and Medicaid and to enact tax cuts.

Born to Run

To use the reconciliation process, Congress must first include language in the annual budget resolution that instructs the appropriate committees of jurisdiction to report legislative language to the budget committees outlining their specific budgetary proposals. The budget committees then draft an omnibus reconciliation bill incorporating these legislative changes. In addition, a precedent called the "Byrd Rule" prohibits reconciliation bills from including provisions that would increase the deficit beyond 10 years of passage.

Once on the floor, the House and Senate consider the legislation under expedited rules. This is extremely important in the Senate, where the bill is limited to 20 hours of debate, cannot be filibustered, and only requires a majority vote (51). Unlike the budget resolution used to authorize it, the final reconciliation bill does require Presidential approval.

Born in the USA

Reconciliation came into being via the Congressional Budget and Impoundment Control Act of 1974 and has been utilized 23 times since its inception. It was frequently used by congressional Republicans during the Clinton and Bush administrations. Reconciliation was most recently used by Democrats in 2010 to make budgetary changes to the Senate-passed Affordable Care Act in order to avert a Republican filibuster and pass health care reform. That same reconciliation bill also expanded the Federal Direct Loan Program at the expense of the Stafford Loan Program.

Dancing in the Dark

As the Republican-controlled Congress crafts its budget for federal fiscal year 2016 (starting on October 1, 2015), there has been speculation that it will attempt to include reconciliation language that dismantles the Affordable Care Act or attempts to pass tax reform. While this would allow Republicans to circumvent a Democratic filibuster in the Senate, they would need to maintain 51 votes in a narrow majority. Moreover, the bill would still be subject to a veto from President Obama, and it may be tough to muster the needed votes to override.