Reconciliation (United States Congress)

Reconciliation is an optional part of the annual congressional budgetary process.[3] Typically, the reconciliation process begins when the president submits a budget to Congress early in the calendar year. In response, each chamber of Congress begins a parallel budget process, starting in the Senate Budget Committee and the House Budget Committee.[4] Each budget committee proposes a budget resolution setting spending targets for the upcoming fiscal year; in order to begin the reconciliation process, each house of Congress must pass identical budget resolutions that contain reconciliation instructions.[5] Other committees then approve bills that meet the spending targets proposed by their respective budget committees, and these individual bills are consolidated into a single omnibus bill. Each house of Congress then begins consideration of their respective omnibus bills under their respective rules of debate.[4]

The reconciliation process has a relatively minor impact in the House of Representatives, but it has important implications in the Senate. In contrast to most other legislation, senators cannot use the filibuster to indefinitely prevent consideration of a reconciliation bill, because Senate debate over reconciliation bills is limited to twenty hours. Thus, reconciliation bills only require the support of a simple majority of the Senate for passage, rather than the 60-vote super-majority required to invoke cloture and defeat a filibuster.[lower-alpha 1][7] Senators could theoretically prevent passage of a reconciliation bill by offering an unending series of amendments in a process known as a "Vote-a-Rama,"[lower-alpha 2] but, unlike the modern filibuster, senators introducing these amendments must stand up and verbally offer the amendments.[9]

Though the reconciliation process allows a bill to bypass the filibuster in the Senate, it does not affect other basic requirements for the passage of a bill, which are laid out in the Constitution's Presentment Clause. The House and Senate still must pass an identical bill and present that bill to the president. The president can sign the bill into law or veto it, and Congress can override the president's veto with a two-thirds majority vote in both houses of Congress.

The Byrd Rule defines any reconciliation changes to Social Security as "extraneous"—and therefore ineligible for reconciliation.

The Byrd Rule, named for Senator Robert Byrd, was adopted in 1985 and amended in 1990.[10] The Byrd Rule defines a provision to be "extraneous"—and therefore ineligible for reconciliation—in six cases:[2]

1. If it does not produce a change in outlays or revenues;
2. If it produces an outlay increase or revenue decrease when the instructed committee is not in compliance with its instructions;
3. If it is outside the jurisdiction of the committee that submitted the title or provision for inclusion in the reconciliation measure;
4. If it produces a change in outlays or revenues which is merely incidental to the non-budgetary components of the provision;
5. If it would increase the deficit for a fiscal year beyond those covered by the reconciliation measure (usually a period of ten years);[lower-alpha 3] or
6. If it recommends changes in Social Security.

The Byrd Rule does not prevent the inclusion of extraneous provisions, but relies on objecting senators to remove provisions by raising procedural objections.[12] Any senator may raise a procedural objection to a provision believed to be extraneous, which will then be ruled on by the Presiding Officer, customarily on the advice of the Senate Parliamentarian: a vote of 60 senators is required to overturn their ruling. While the Vice President (as President of the Senate) can overrule the parliamentarian, this has not been done since 1975.[13]

In 2001, Senate Majority Leader Trent Lott fired Parliamentarian Robert Dove after dissatisfaction with his rulings, and replaced him with Alan Frumin.[14]

Congress can pass up to three reconciliation bills per year, with each bill addressing the major topics of reconciliation: revenue, spending, and the federal debt limit. However, if Congress passes a reconciliation bill affecting more than one of those topics, it cannot pass another reconciliation bill later in the year affecting one of the topics addressed by the previous reconciliation bill.[2] In practice, reconciliation bills have usually been passed once per year at most.[15]

Other restrictions have also been applied to reconciliation. For example, from 2007 to 2011, Congress adopted a rule preventing reconciliation from being used to increase deficits.[16]

Due to growing concerns over deficits and presidential control of the budget process, many members of Congress sought to reform the congressional budgetary process in the early 1970s. Charles Schultze, a former Director of the Bureau of the Budget, suggested a new process in which Congress would exercise greater control of the budget process by setting overall spending targets. Schultze proposed that Congress create a new type of legislation, the "final budget reconciliation bill," to ensure that the various budget-related bills passed by each congressional committee collectively fell within the overall spending targets passed by Congress. Schultze's ideas were adopted by Congress with the passage of the Congressional Budget Act of 1974, which established the reconciliation process, the Congressional Budget Office, and standing budget committees in the House and Senate.[17] Under the original design of the Budget Act, reconciliation was expected to apply to revenue and spending within a single fiscal year.[18]

Although reconciliation was originally understood to be for the purpose of either reducing deficits or increasing surpluses, the language of the 1974 act refers only to "changes" in revenue and spending amounts, not specifically to increases or decreases. Former Parliamentarian of the Senate Robert Dove noted that in 1975 Senator Russell Long convinced the Parliamentarian to protect a tax cut bill.[19] However, that bill was vetoed by President Gerald Ford. During the late 1970s, the process of reconciliation was largely ignored, in part because reconciliation could only be used during a brief window. In 1980, Congress amended the reconciliation process, allowing it to be used at the start of the budget process. Later that year, President Jimmy Carter signed the first budget bill passed using the reconciliation process; the bill contained about $8 billion in budget cuts.[20]

Senator Robert Byrd.

Reconciliation emerged as an important legislative tool during the presidency of Ronald Reagan. A coalition of Republicans and conservative Democrats used the reconciliation process to pass the Omnibus Budget Reconciliation Act of 1981, which contained various spending cuts. In addition to bypassing the filibuster, the reconciliation process allowed Congress to pass these spending cuts through a budget resolution and a single reconciliation bill, rather than through the traditional method of passing several bills addressing each area of spending.[21] During the early 1980s, Congress passed reconciliation bills containing provisions that did not directly relate to the budget; for example, one reconciliation bill decreased the number of individuals on the Federal Communications Commission. In response, Senator Robert Byrd led passage of an amendment to strike "extraneous" amendments from reconciliation bills, and Congress permanently adopted the Byrd Rule in 1990.[22] The reconciliation process remained an important tool of congressional majorities even after the passage of the Byrd Rule.[16] During the presidency of George H. W. Bush, it was used to pass the Omnibus Budget Reconciliation Act of 1990, which reduced federal spending and increased federal revenue.[23]

After taking office in 1993, Democratic President Bill Clinton won passage of his proposed budget, the Omnibus Budget Reconciliation Act of 1993 through reconciliation. In 1996, he signed another major reconciliation bill, the Personal Responsibility and Work Opportunity Act of 1996.[16] In 1997, Congress passed the Taxpayer Relief Act of 1997, a reconciliation bill that reduced taxes and increased the federal budget deficit. The tax cut bill was paired with the Balanced Budget Act of 1997, which reduced spending, and the two bills were signed into law by President Clinton. In 1999, the Congress used reconciliation to pass the Taxpayer Refund and Relief Act 1999, which represented the first time that the reconciliation process was used to increase deficits without a companion bill that reduced spending. It was vetoed by President Clinton. A similar situation happened in 2000, when the Senate again used reconciliation to pass the Marriage Tax Relief Reconciliation Act 2000, which was also vetoed by Clinton. At the time, the use of the reconciliation procedure to pass such bills was controversial.[24]

Upon taking office in 2001, Republican President George W. Bush sought the passage of major tax cuts, but his party controlled only a narrow majority in the Senate. To avoid a filibuster, Bush and his congressional allies used reconciliation to pass the Economic Growth and Tax Relief Reconciliation Act of 2001 and the Jobs and Growth Tax Relief Reconciliation Act of 2003, two major tax cut bills that reduced federal revenues.[25] To comply with the Byrd Rule, the tax cuts contained sunset provisions, meaning that, absent further legislation, tax rates would return to their pre-2001 levels in 2011.[26] Portions of the Bush tax cuts were made permanent through the American Taxpayer Relief Act of 2012, though some of the tax cuts for high earners were not extended.[27]

Democrats won control of the presidency and increased their control over Congress in the 2008 elections, and newly-inaugurated President Barack Obama and his congressional allies focused on passing a major healthcare reform bill in the 111th Congress. The Senate passed a major healthcare bill in late 2009 without using the reconciliation process; because Democrats had a 60-seat super-majority in the Senate, they were able to defeat Republican attempts to block the bill via the filibuster. While the House continued to debate its own healthcare bill, Democrats lost their 60-seat Senate super-majority following the death of Senator Ted Kennedy.[lower-alpha 4] Following the loss of the Democratic super-majority in the Senate, House Democrats agreed to pass the Senate bill, while Senate Democrats agreed to use the reconciliation process to pass a second bill that would make various adjustments to the first bill.[29] The original Senate bill was passed by the House and signed into law by President Obama as the Patient Protection and Affordable Care Act (ACA). Subsequently, the House and Senate used reconciliation to pass the Health Care and Education Reconciliation Act of 2010, which contained several alterations to the ACA.[28] In 2016, Republicans passed a reconciliation bill to repeal parts of the ACA, but it was vetoed by President Obama.[30][31]

After gaining control of Congress and the presidency in the 2016 elections, Republicans sought to partially repeal the ACA and pass a major tax cut bill in the 115th United States Congress. As the party lacked a 60-vote super-majority in the Senate, they sought to implement both parties through separate reconciliation bills, with the healthcare bill passed using the reconciliation process for fiscal year 2017 and the tax cut bill passed using the reconciliation process for fiscal year 2018.[32] Republicans were unable to pass their healthcare bill, the American Health Care Act of 2017, because three Senate Republicans and all Senate Democrats voted against it, preventing the bill from gaining majority support in the Senate.[33] With the defeat of their healthcare bill, congressional Republicans changed their focus to a separate reconciliation bill that would cut taxes.[34] Both houses of Congress passed a tax cut bill in late 2017, though the Byrd Rule required the stripping of some provisions deemed extraneous.[35] After both houses of Congress passed an identical tax cut bill, President Trump signed the Tax Cuts and Jobs Act of 2017 into law in December 2017.[36] Because of Byrd Rule restrictions, the individual tax cuts contained in the Tax Cuts and Jobs Act of 2017 will expire in 2027 barring further legislative action.[37]