By: Akanksha A. Panicker
The journey for a bill to become law is difficult and arduous. Between endless debates and regulations, it can seem impossible to enact a law quickly. However, with majorities in the House and Senate, leaders may well use a special legislative process called ‘reconciliation to advance high-priority fiscal legislation quickly. In the Senate, reconciliation bills are among the very few instances of legislation not being subject to filibuster. Additionally, the scope of amendments is also limited, which renders this process a real advantage for enacting controversial budget and tax measures.
Reconciliation legislation on expenditures, taxes, and the federal debt ceiling should be enacted, and the Senate can pass one bill each year on each issue. Congress will therefore approve a limit of three reconciliation bills each year, but in reality, a single reconciliation bill involving both expenditure and revenue can sometimes be enacted. Extraneous policy amendments are prohibited by the ‘Byrd Rule,’ which often forbids reconciliation legislation from raising the federal debt or deficit after ten years or incorporating adjustments to Social Security.
The Senate Parliamentarian is the in-house rules specialist. In April 2021, it was decided that the Senate would approve multiple budget reconciliation bills in 2021: one for the fiscal year 2021 and one for the fiscal year 2022. Furthermore, the Senate could approve new budget reconciliation measures by referring to them as an updated budget resolution with budget reconciliation guidance included.
The reconciliation process was created by the Congressional Budget Act of 1974 and was first used in 1980.
[1.0] THE RECONCILIATION FRAMEWORK IN CONGRESS
Reconciliation is a legislative mechanism used by the United States Congress as a parliamentary procedure to speed up budgetary bills through the United States Senate. The Senate filibuster ultimately takes a sixty-vote supermajority for the approval of any bills in the Senate. Still, reconciliation includes a mechanism to prohibit filibuster usage and, in doing so, encourage the Senate to enact a bill through simple majority support. The reconciliation process remains in the United States House of Representatives; however, due to the lack of a supermajority threshold for House bills, reconciliation has had less of an effect on that political body.
Reconciliation is an alternative component of the yearly spending mechanism of Congress. The reconciliation phase usually starts as the president submits a proposal to Congress sometime early in the fiscal year. As a result, each chamber of Congress initiates a concurrent budget mechanism, beginning with the Senate Budget Committee and the House Budget Committee. Every budget committee recommends a budget resolution that establishes funding priorities for the coming fiscal year; to trigger the reconciliation phase, each house of Congress may adopt similar budget resolutions that provide reconciliation guidance. Such committees then pass bills that exceed the funding goals set by their own budget committees, and all separate bills are merged into a single omnibus bill. Thus, through their respective discussion rules, each house of Congress starts debating their corresponding omnibus bills.
The reconciliation mechanism has a limited effect in the House of Representatives, but it has far-reaching consequences in the Senate. Senators could not indeed use the filibuster to block approval of a reconciliation bill endlessly, unlike under most laws, since Senate discussion on reconciliation measures is restricted to twenty hours. As a result, reconciliation measures need just a mere simple majority of Senate votes to succeed, rather than the sixty-vote supermajority needed to trigger cloture to overcome a filibuster. Senators could potentially block the approval of a reconciliation bill by proposing an unrelenting list of changes through a procedure regarded as a ‘Vote-a-Rama,’ however, unlike the current filibuster, senators presenting these amendments would have to get up and deliver the amendments orally.
Although this reconciliation framework requires a bill to circumvent the filibuster in the Senate, it has little effect on the other fundamental provisions for proposal adoption outlined in the Constitution’s Presentment Clause. The House and Senate would still approve an identical bill and send it to the president. The president may sign or veto the measure, and Congress can overturn the president’s veto by a two-thirds majority vote of both chambers.
[2.0] THE BYRD RULE AS A RESTRICTION
The Byrd Rule, named after Senator Robert Byrd, was implemented in 1985 and revised in 1990. The Byrd Rule grants senators the opportunity to object to any amendment that does not affect the amount of expenditure or revenues or anything under which the change of spending or revenues is ‘merely incidental,’ to prohibit ‘extraneous’ laws from benefiting from the expedited reconciliation phase.
The Byrd Rule distinguishes a clause as ‘extraneous,’ and therefore unavailable for reconciliation, in the following six cases when it [A.] may not result in a change in outlays or revenues; [B.] results in an upward movement of outlays or a decline in revenues while the instructed committee is not following the directives, [C.] it is beyond the jurisdiction of the committee that sent the title or provision for implementation in the reconciliation measure; [D.] it results in a change in outlays or revenues that is only incidental; [E.] it would increase the deficit for a fiscal year beyond those covered by the reconciliation measure (usually a period of ten years); or [F.] it recommends changes in Social Security.
The Byrd Rule would not ignore the insertion of extraneous clauses and objected to senators to delete provisions through formal opposition. Any senator can present a procedural objection to an extraneous clause, which the Presiding Officer would then rule on, usually on the recommendation of the Senate Parliamentarian: a majority of sixty senators is necessary to reverse their ruling. Although the Vice President (as President of the Senate) has the authority to overrule the parliamentarian, this has not occurred since 1975.
The Byrd Rule binds only if a senator specifically raises a ‘point of order.’ If one does, it takes the consent of sixty senators to overturn a point of order. Items removed from a reconciliation bill following this rule are dubbed as ‘Byrd droppings’ in a tongue-in-cheek instance of Congressional humor and often are dropped before a bill comes to the floor. The process of deleting those provisions is similarly known as a ‘Byrd bath.’
Congress has the authority to approve three reconciliation measures annually, with every bill tackling the three main aspects of reconciliation: taxes, expenditures, and the federal debt ceiling. However, once Congress passes a reconciliation bill that addresses more than one of those issues, it cannot pass another reconciliation bill later in the year that addresses one of the prior reconciliation bill’s topics of revenue, spending, or debt. In fact, reconciliation measures are normally passed just once a year.
[3.0] HOW RECONCILIATION WOULD WORK
Reconciliation is basically a means for Congress to pass bills on taxation, budgets, and the debt ceiling by just a simple majority in the Senate (fifty-one votes, or fifty if the vice president breaks a tie) while eliminating the possibility of a filibuster, which takes sixty votes to defeat.
The budget reconciliation mechanism is a discretionary apparatus under the Congressional Budget Act of 1974 that works in conjunction with the periodic budget resolution system. The primary goal of the reconciliation phase is to strengthen Congress’ power to amend existing legislation aiming to retain tax and expenditure amounts in line with the budget resolution’s initiatives. As a result, for a significant majority of the budget, reconciliation could be the most powerful budget control mechanism open to Congress.
Reconciliation is a dual-stage configuration in which directives are contained in the budget agreement, authorizing the relevant committees to produce legislation implementing the intended fiscal results. The resulting legislation (usually inserted into an omnibus spending bill) is debated in the House and Senate under augmented protocols for expedition.
[3.1] THE DUAL STEP MEASURES FOR RECONCILIATION
The Congressional Budget and Impoundment Control Act requires the House and Senate to pass a minimum of one budget bill annually. The budget proposal is in the format of a concurrent resolution and is therefore not submitted to the President for approval or veto. It acts as a general legislative declaration on effective income, expenditures, and debt strategies and a reference to subsequent review of legislation incorporating those policies at the organizational and programmatic levels. Budget settlement policies are applied using several methods, including points of control. The 1974 act established the House and Senate Budget Committees, which have sole authority over budget proposals and are responsible for overseeing their implementation.
The House and Senate Budget Committees depend on baseline budget estimates compiled by the Congressional Budget Office in preparing a budget resolution. A budget resolution normally reflects several predictions about policy activity that are likely to occur throughout a session that could allow revenue and expenditure levels to vary from baseline rates. However, by permanent legislation, the majority of taxes and direct investment happens immediately next year. As a result, if the committees with authority over revenue and direct spending services do not report legislation amending current law to carry out the budget resolution policies, income and direct expenditures for these activities will possibly remain unaffected.
The budget reconciliation protocol is an optional procedure that works in tandem with the budget resolution procedure. The primary goal of the reconciliation phase is to strengthen Congress’ power to amend existing legislation to keep tax and expenditure amounts in line with the budget resolution’s policies. As a result, with a considerable majority of the budget, compromise is likely the most powerful budget control mechanism open to Congress.
The method of reconciliation is multi-staged. Initially, the budget agreement includes reconciliation directives that guide the relevant committees to produce legislation that achieves the required budgetary results. The instructed committees send their policy proposals to their corresponding Budget Committees by the timeline specified in the budget resolution. The Committees further merge them without major changes into an omnibus budget reconciliation package.
The second phase is for the House and Senate to examine the resulting reconciliation bills under expedited procedures. The Senate’s discussion on every reconciliation bill is restricted to twenty hours (and ten hours on a conference report), and changes should be salient. During the review of reconciliation proposals in the House, the House Rules Committee usually limits discussion and the offering of amendments.
When only one committee is briefed, the procedure requires the committee to present the reconciliation legislation effectively to its parent chamber, without the Budget Committee. In certain years, budget proposals contained reconciliation guidelines that enabled the House and Senate to discuss multiple reconciliation bills. The procedure is completed until the reconciliation provisions requested in the budget agreement are signed or vetoed by the President. In the aftermath of a veto, Congress may establish another reconciliation bill only after passing another budget resolution comprising reconciliation guidelines.
Most recently, President Joe Biden proposed the American Rescue Plan, a USD 1.9 trillion economic stimulus bill, to hasten the United States’ rebound from the economic and health consequences of the COVID-19 pandemic and the ensuing downturn. It was intended to be one of the first bills introduced in the 117th Congress. The package, which was first proposed on January 14, 2021, drew on several of the provisions used in the CARES Act from March 2020 and the Consolidated Appropriations Act, 2021. According to the Byrd Law, the United States Senate Parliamentarian decided on February 21st that a clause of the American Rescue Plan asking for a USD 15 minimum wage raise should not be included under Reconciliation. On March 11th, 2021, the bill was signed into law.
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1. Bills passed using the reconciliation process include the Consolidated Omnibus Budget Reconciliation Act of 1985, the Personal Responsibility and Work Opportunity Act of 1996, the Economic Growth and Tax Relief Reconciliation Act of 2001, the Health Care and Education Reconciliation Act of 2010, the Tax Cuts and Jobs Act of 2017 and the American Rescue Plan Act of 2021.
2. The Congressional Budget and Impoundment Control Act of 1974 (Pub.L. 93–344, 88 Stat. 297, 2 U.S.C. §§ 601–688) is a United States federal law that governs the role of the Congress in the United States budget process.
3. What’s in a Vote-a-Rama? The New York Times, https://www.nytimes.com/2021/03/05/us/politics/vote-a rama.html (last visited Apr 17, 2021)
4. ‘Vote-aromas (1977 to Present) U.S. Senate: ‘Vote-aromas (1977 to Present), https://www.senate.gov/legislative/Votearama1977present.htm (last visited Apr 17, 2021)
5. The Presentment Clause, which is contained in Article I, Section 7, Clauses 2 and 3 of the Constitution, provides:
‘Every Bill which shall have passed the House of Representatives and the Senate, shall, before it becomes a law, be presented to the President of the United States: If he approves he shall sign it, but if not he shall return it, with his Objections to that House in which it shall have originated, who shall enter the Objections at large on their Journal, and proceed to reconsider it. If after such Reconsideration two-thirds of that House shall agree to pass the Bill, it shall be sent, together with the Objections, to the other House, by which it shall likewise be reconsidered, and if approved by two-thirds of that House, it shall become a Law. But in all such cases, the Votes of both Houses shall be determined by Yeas and Nays, and the Names of the Persons voting for and against the Bill shall be entered on the Journal of each House, respectively. If the President does not return any Bill within ten Days (Sundays excepted) after it shall have been presented to him, the Same shall be a Law, in like manner as if he had signed it, unless the Congress by their Adjournment prevent its Return, in which case it shall not be a Law. Every Order, Resolution, or Vote to which the Concurrence of the Senate and House of Representatives may be necessary (except on a question of Adjournment) shall be presented to the President of the United States; and before the Same shall take Effect, shall be approved by him, or being disapproved by him, shall be repassed by two-thirds of the Senate and House of Representatives, according to the Rules and Limitations prescribed in the case of a Bill.’
6. Section 313 of the Congressional Budget and Impoundment Control Act of 1974 Pub.L. 93–344
7.Byrd Brains GovExec.com, https://web.archive.org/web/20120119095000/http://www.govexec.com/dailyfed/0405/041805ol.htm (last visited Apr 17, 2021)
8. What Is ‘Reconciliation’? Democrats Face Hurdles To Use It For COVID Relief NPR, https://www.npr.org/2021/02/02/962812082/what-is-reconciliation-democrats-face-hurdles-to-use-it-for-covid-relief (last visited Apr 17, 2021)
9. The United States Senate voted 50–49 to open debate on the resolution, which would allow Democrats to pass the relief package without support from Republicans through the process of reconciliation. The House voted 218–212 to approve the budget resolution. On February 4, a vote-a-Rama session began. The Senate introduced amendments to the relief package, including an amendment in a 90–10 vote that would provide direct relief to the restaurant industry. Vice President Kamala Harris cast a tie-breaking vote as President of the Senate for final Senate passage of the reconciliation bill, sending it to the House approval of the change
10. Coronavirus Aid, Relief, and Economic Security Act, Pub.L. 116–136
11. Consolidated Appropriations Act, 2021 H.R. 133. December.