Amid the Trump Administration’s illegal moves to freeze Congressionally-authorized funding, shutter Congressionally-authorized agencies, and fire civil servants for political reasons, budget reconciliation looms.
Does Congressional budget reconciliation even matter right now given our unfolding Constitutional crisis?
Yes, it does. Budget reconciliation is a legislative tool with the power to fundamentally reshape federal spending for a decade if Congress and the President manage to deploy it successfully. And unlike much of what the Trump administration has sought to do so far, it is allowed by law. As a result, even as President Trump and Elon Musk continue sowing dangerous, illegal chaos, it is important to spare some energy to crawl into the weeds on budget reconciliation and understand what awaits us in the months ahead.
Who is responsible for Congressional budget reconciliation?
While both the US House and White House play critical roles in budget reconciliation, this is really all about the Senate.
Most commonly, there are two ways to move legislation through the Senate: unanimous consent or a vote of three-fifths of the Senators (60 out of 100) called a supermajority. The history and legitimacy of the supermajority requirement in the Senate are topics for another day. For our purposes, the thing to know is that requiring a supermajority vote makes enacting sweeping, partisan legislation, especially when it comes to rearranging tax and spending priorities, exceedingly difficult.
What is budget reconciliation?
Enter the Congressional Budget Act of 1974 (CBA). Passed by the 93rd Congress and signed into law by President Ford, the CBA governs all aspects of the federal budget process. Among the law’s most important provisions is a rule that if the House and Senate can agree on a budget resolution, legislation implementing the spending levels in that resolutioncan pass the Senate by a simple majority vote (51 out of 100 senators). Such legislation is called a budget reconciliation bill because it is supposed to reconcile actual spending and revenues with the new budget resolution.
Reconciliation is unworkable when the two political parties share control of the federal government. During unified control of the Executive and Legislative branches, as is the situation currently with the Republicans controlling the White House, House of Representatives, and Senate, budget reconciliation offers a rare opportunity for the party in control to reshape the federal government for years to come.
Recent examples of budget reconciliation legislation include the Republican tax cuts in 2017 (the Tax Cuts and Jobs Act), the Democratic economic stimulus plan in the wake of the COVID-19 pandemic in 2021 (the American Rescue Plan), and the Inflation Reduction Act in 2022.
Where does budget reconciliation happen?
The budget reconciliation process starts in the House and/or Senate Budget Committees. As of today, each chamber is moving its own, vastly different, budget resolution, each proposing different spending levels across the federal government.
The Senate is considering a narrower resolution that purports to increase energy production and invest in border security, with a second resolution focused on tax policy to come later. The House is resisting the two-step approach in favor of one massive package containing all of President Trump’s planned spending, including permanent extension of the 2017 tax cuts.
How will budget reconciliation happen?
Eventually, the House and Senate will have to agree on a single budget resolution or reconciliation will not be triggered (the budget resolution only requires a simple majority for passage and does not require approval by the President). The final budget will include instructions to a wide variety of Congressional committees with jurisdiction over different areas of spending.
For example, the final budget resolution could instruct the House Energy and Commerce Committee to find budget savings within its jurisdiction totaling a specific amount, or the Senate Armed Services Committee to identify provisions in its purview that would increase spending by a certain amount.
Each committee receiving instructions in the budget resolution will then write provisions to comply with its instructions. Finally, the budget committees package all the provisions in one legislative vehicle, which must pass the House and Senate and then be signed into law by the President. It remains to be seen whether the House approach (one big bill) or Senate approach (two smaller bills) will win out.
Senate rules prohibit the inclusion of “extraneous” matters in a budget reconciliation bill. This is enforced through the “Byrd rule,” named for the late Senator Robert C. Byrd. The Byrd rule says the Senate Parliamentarian is required to review budget reconciliation legislation and identify provisions unrelated to the budget. This review is called the “Byrd bath.” Provisions found to violate the Byrd rule are subject to removal from the bill. In other words, anything unrelated to the budget can’t be added to a reconciliation bill. (For a deep dive on the Byrd rule, please see this excellent report from the Congressional Research Service.)
To be clear, budget reconciliation legislation is required to be related to federal spending and revenues, but it is not required to actually save any money, and it rarely does. The current House budget resolution would specifically raise the debt ceiling by $4 trillion, which is strong evidence that the House majority expects reconciliation legislation to increase the debt, not lower it.
When will budget reconciliation start and be completed?
Great question! Who knows?
The Congressional Budget Act includes deadlines for this process, and the final budget resolution will include dates by which the committees receiving reconciliation instructions should comply, but there are no enforcement mechanisms. The Congressional Research Service summarizes the timing this way (emphasis, mine):
The record of experience with reconciliation legislation over the period since 1980 indicates considerable variation in the time needed to process such measures from the date the reconciliation instructions take effect (upon final adoption of the budget resolution) until the resultant reconciliation legislation is approved or vetoed by the President. The interval for the 24 reconciliation measures ranged from a low of 27 days (for the Omnibus Budget Reconciliation Act of 1990) to a high of 384 days (for the Tax Increase Prevention and Reconciliation Act of 2005). On average, completing the process took about five months (155 days) . . .
Assuming the House and Senate can come to agreement on a budget resolution this spring, a budget reconciliation bill could be expected in the fall.
But don’t forget that this 10-year budget reconciliation process is unfolding while annual spending legislation for the current fiscal year expires March 14. That’s right: Congress and the Administration are focused on a long-term budget plan while they cannot agree on a plan to keep the government open past next month. Ironic, eh?
Why is Congress using the budget reconciliation process?
President Trump and Congressional Republicans hope to use the budget reconciliation process to enact a partisan spending plan that could not pass the Senate under normal rules. Just how extreme that plan will be remains to be seen.
The current Senate budget resolution would pump $150 billion into the already-bloated Pentagon, and another combined $350 billion into law enforcement agencies within the Departments of Justice and Homeland Security, ostensibly to curb unauthorized migration.
Meanwhile, the Senate plan claims to defray a tiny percentage of that spending by expanding fossil fuel production from federal lands and waters. Senate Republicans have also indicated they intend to use reconciliation to repeal much of the Inflation Reduction Act’s investments in renewable energy and clean transportation, while overturning the Biden Administration’s fee on methane.
The House budget blueprint is even more destructive. It would extend the Trump tax cuts from 2017, which exploded the deficit and were severely skewed in favor of the wealthy. To mask a small percentage of the cost of such a move, the House budget plan would allow cuts to Medicaid, federal student assistance, and the Supplemental Nutrition Assistance Program (SNAP).
Both resolutions, and the reconciliation bill that will result, would redistribute trillions in taxpayer dollars to the already-wealthy, powerful, and politically connected, and away from poor and working-class families, while managing to grow the deficit and debt.
What can we do about this?
As this process unfolds, the Union of Concerned Scientists—working independently and in coalition with partners—will defend crucial spending priorities while highlighting the disastrous impacts of the current reconciliation plans. We will continue to provide policymakers who are willing to protect investments in a clean energy economy, respond to the climate crisis, protect programs vital to working families, pursue tax fairness, and right-size our defense spending with tools to engage in that defense using the best available science.
Enactment of a budget reconciliation plan is not a forgone conclusion. While the process does provide a crucial shortcut to Senate passage for the administration’s legislative priorities, it remains a heavy lift, made even harder by the historically narrow margin in the House and the tendency toward Congressional in-fighting.
Effective science advocacy can affect this outcome, and that is what we at UCS do. Please stay tuned.