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Feb. 13, 2025Washington |  By: Jennifer Shutt - Missouri Independent

You’re hearing a lot about budget reconciliation in Congress. What does that mean?

u.s. capitol building

By Jennifer Shutt - Missouri Independent

WASHINGTON — Republicans in Congress have begun taking their first steps on the long and winding road that constitutes the budget reconciliation process.

GOP lawmakers plan to use the special legislative procedure to enact substantial changes to border security, defense, energy and tax law, as well as major spending reductions. If they succeed, there will be no Democratic votes needed.

On the way, Republicans have to jump through the many, many hoops that make up the reconciliation process and comply with its strict rules. 

Here’s a breakdown of how reconciliation works, how it differs from passing yearly spending bills that fund government operations and what obstacles Republicans are likely to run into along their journey.

What is a budget resolution in Congress?

The House and Senate must vote to approve the same budget resolution with identical reconciliation instructions to unlock the reconciliation process. This is the first step of several.

The budget resolution is a tax and spending blueprint. Congress is supposed to use it to plan out how much revenue the federal government brings in through taxes and how much money it spends across the 10-year budget window.

The budget resolution is not a bill and cannot become law. At most, if both the House and Senate agree, the budget resolution is adopted.

Important: The budget resolution doesn’t actually include any money and doesn’t fund any part of the federal government. Any changes proposed in the budget resolution must move through Congress via separate legislation and be signed into law by the president to take effect.

So Congress’ budget resolution doesn’t actually fund anything?

Correct.

So what the heck funds the government?

The dozen annual appropriations bills provide funding for most of the federal departments and agencies. That includes Agriculture, Defense, Energy, Homeland Security, Interior, Justice, NASA, State, Transportation and Housing and Urban Development.

The appropriations bills are supposed to become law by the start of the fiscal year on Oct. 1, but this year, Congress has used two stopgap spending bills to extend the deadline until March 14.

That is why, even if Congress adopts a budget resolution in the next few weeks, there could still be a partial government shutdown starting in mid-March. The money would run out.

Those dozen annual appropriations bills account for about one-third of all federal spending, with the other two-thirds coming from so-called mandatory programs, like Medicare, Medicaid and Social Security. Those programs don’t require Congress to approve their funding each year.

You can see a breakdown of where discretionary spending goes here and details about how mandatory funds are allocated here, courtesy of easy-to-understand images from the nonpartisan Congressional Budget Office.

Why does Congress have a budget process and a separate spending process? That seems … confusing.

The budget resolution is supposed to provide an opportunity for Congress to step back and plan what the federal government’s tax and spending laws should look like during the next decade.

It’s meant to be a big-picture approach to revenue, discretionary spending, mandatory funding, the deficit and the debt.

After debating and agreeing to a budget resolution, Congress is then meant to get to work on the bills that would actually implement that vision.

The reconciliation process is intended to make it a bit easier for Congress to pass bills that change tax, spending, or debt to bring federal law closer to the vision detailed in the budget resolution.

What about the dozen annual appropriations bills, then?

They are intended to create a yearly debate within Congress about how much to allocate to the departments and agencies that receive discretionary spending.

So where does budget reconciliation fit into all this?

The process allows Congress to make changes to taxes, spending and debt in order to reconcile current law with what lawmakers planned out in the budget resolution.

Democrats and Republicans, however, tend to use it when they hold unified control of government to pass legislation they don’t want to negotiate with the other political party.

The process comes with strict restrictions in the Senate that are overseen by the parliamentarian and known as the Byrd rule, which is actually a law.

Okay, fine, what’s the Byrd rule?

West Virginia Sen. Robert C. Byrd proposed the original version of the Byrd rule in 1985. The elements changed a few times before lawmakers voted in 1990 to make it part of the 1974 Budget Act.

It prevents the Senate from adding any provisions to a reconciliation package that:

Why use budget reconciliation, instead of just passing a bill, if there are so many restrictions?

While the House can pass bills with a simple majority vote, the Senate has the legislative filibuster, which requires at least 60 lawmakers vote to limit debate on a bill before they can move onto the final passage vote.

It’s extremely rare for either party to hold a supermajority of 60 or more seats in the Senate. So when either Democrats or Republicans hold the House, Senate and White House, they tend to use reconciliation to try to pass major initiatives.

What are the steps to budget reconciliation?

The House and Senate must vote to adopt a budget resolution with reconciliation instructions.

The committees that received reconciliation instructions draft their portions of the package, hold markups in their committees and then vote to approve their parts of the bill.

The Budget Committee holds a markup where it combines all of the bills into one large reconciliation package.

The legislation goes to the floor for debate and a vote.

The package then goes to the other chamber, where lawmakers can approve it as is, or make changes. If changes are made through amendments, the bill then has to go back across the Capitol.

Both chambers must vote to approve the final version of the bill before it goes to the president for their signature.

What is a vote-a-rama?

The Senate holds an all-night, marathon amendment voting session on the budget resolution and then on the reconciliation package itself. The House does not use this approach.

The endeavor gives the majority party, right now Republicans, the chance to make changes to the budget resolution or the reconciliation package that they think would make it better.

The minority party, currently Democratic, typically tries to challenge senators from the other side of the aisle with difficult votes on policy areas they’d rather not vote on.

How often does Congress pass bills through reconciliation?

Typically, any time one political party holds unified control of government, they at least try to use reconciliation to make good on campaign promises.

Democrats passed two big, important packages through reconciliation during the beginning of the Biden administration — a $1.9 trillion coronavirus relief bill and their signature climate change, health care and tax package, known as the Inflation Reduction Act, or IRA.

During President Donald Trump’s first term in office, Republicans tried for months to repeal the 2010 health care law known as the Affordable Care Act, or Obamacare, via the reconciliation process, but were unsuccessful.

The GOP was able to use budget reconciliation to pass the 2017 tax law, referred to as the Tax Cuts and Jobs Act, that they hope to renew this year.

Congress has sent the president a total of 27 reconciliation packages since 1980, with 23 of those becoming law. The other four were vetoed, according to a report from the nonpartisan Congressional Research Service.