What Does Climate Action Have to Do with Budget Reconciliation? In 2021, Everything.

August 29, 2021
Cameron Smith/Unsplash
Jonna Hamilton
Director of Policy, Clean Transportation Program

As has been true for several years now, Congress is not passing much legislation through so-called “regular order,” which requires 60 votes to move a bill in the Senate. Even though they did manage to pass the bipartisan Infrastructure and Investment Act through the Senate earlier this month, we need to do a lot more to make real progress addressing the climate crisis. There is A LOT of talk about using the process of budget reconciliation to pass legislation in the Senate. If you have been wondering what reconciliation is and why it provides the only path forward right now for serious congressional action on climate change, this is the blog for you.

There is no doubt that we are in a climate crisis. The western US is experiencing catastrophic wildfire seasons, the Gulf and East Coast are seeing more rapidly intensifying, stronger, wetter and more destructive tropical storms, record-breaking rainfall and flooding is taking  a devastating toll in the Southeast and the Midwest, and we keep breaking the monthly and annual temperature records. To have a fighting chance of limiting global average temperature rise as close to 1.5 degrees Celsius above pre-industrial levels, as we have agreed in the Paris Climate agreement, we need to ACT NOW. There is no time to wait.

People around the country are suffering from worsening climate impacts, and powerful, effective solutions—investments in clean electricity, clean transportation, and climate resilience—are within our reach. Yet a closely divided and increasingly partisan Congress has not seen fit to move forward major climate legislation through regular order.

Why budget reconciliation is the best (and only) path forward now

First, a reminder that the Democrats and Republicans each currently have 50 seats in the Senate. If there is a 50/50 tie, the Vice President casts the deciding vote. But almost nothing happens in the Senate with just a simple majority anymore.  We have seen the use of the  filibuster rise and rise since 2007, effectively requiring 60 votes to do anything.*

In the mid-’70s, Congress was upset about the filibuster being used too often (déjà vu?) and passed the Congressional Budget Act of 1974 which included rules for a process known as budget reconciliation where the budget resolution could be used to direct additional spending on items of interest, and still only require a simple majority to pass. It has been successfully used 22 times, most recently earlier this year for the American Rescue Plan Act of 2021, a bill aimed at providing urgently-needed COVID and economic relief.

The budget resolution is passed annually (at least it’s supposed to be) and is a VERY topline accounting of the money that the federal government can spend. It does not direct spending itself, but rather gives pots of money to the congressional appropriations subcommittees to fill out the nitty gritty of what federal agencies get how much money and what they can use it for. Crucially, the budget resolution needs only 51 votes to pass in the Senate. Instructions for a budget reconciliation process can be included in the budget resolution.  A budget reconciliation bill is then written to direct spending. There are rules, though, lots of them.

Reconciliation – what’s in and what’s out?

Getting policy done through reconciliation is tricky.  Because the reconciliation process takes place on a budget bill, all of the provisions that are put into the reconciliation bill must spend or save large amounts of government money. Just a little bit of money? Nope, can’t do it. Just want to direct the agencies to do something (a report, a study, a plan)? Nope, it has to spend/save money. Want to do something that brings together lots of departments or agencies to work on something together? Nope, all provisions need to be strictly in the jurisdiction of ONE committee. Want to spend or save money outside the 10 year “budget window”? No way – everything has to be budget neutral by the end of 10 years. It’s a lot of rules and it can be difficult to put in place programs that are great policy within this process. But still, it’s worth it if the world is literally on fire and it’s the only way you can direct serious resources to combat climate change. And if we want our country to do its part to help limit the global temperature rise, this is our moment to go big and make things happen. We can use this process to give a lot more money to existing programs that are set up to address climate change, and you can do almost anything on taxes – the Republicans used this process to cut taxes several times – the asks now are about how to use the tax code to promote technologies that reduce emissions, like renewable energy and clean transportation.

Ok, but how does reconciliation actually work?

First, the Senators agree on a topline number that they want to spend.  In the current iteration, Senators in the majority and the White House have agreed on $3.5 trillion that will partially implement President Biden’s American Jobs Plan and American Families Plan.  The reconciliation process will be used to address many pressing needs in our nation—including healthcare, childcare, jobs, education, environmental justice, and climate change.  It’s a lot of money and if Congress writes and passes a good reconciliation bill, it will help a lot of people as well as addressing climate change.

Second, the House and Senate authorizing committees (the committees that generally write the laws, but don’t generally hold the purse strings – those that actually determine spending are the appropriations committee) tell the Budget Committee how much money they want to spend on programs and provisions that are in their jurisdiction that align with the goals that have been agreed on with the topline number.

Third, the Budget Committee wrestles with those numbers and tells the committees how much money they are going to get (never as much as they ask for) and writes a budget resolution that dictates the amount that each committee will get.

Fourth, the Senate and House pass the budget resolution (which sets up the regular government funding process for that Fiscal Year in addition to setting up reconciliation).

Fifth, the Senate and House write budget reconciliation bills that adhere to the dollar amounts included in the budget resolution. (Hopefully those bills are in alignment, but if there are conflicts, see step 7 about negotiations.)

Sixth, the Senate parliamentarian** reads the Senate bill line by line to make sure that all the provisions meet the reconciliation criteria – which are commonly known as the Byrd Rule.  If a provision doesn’t pass muster, it gets lost in the “Byrd Bath”. 

What’s a “Byrd Bath”, you may be asking yourself.  Well, back in the ’80s Senator Robert C. Byrd (D-WV) was worried that reconciliation was being used to do more legislating than it was supposed to and wrote the criteria for budget reconciliation more robust.  The DC shorthand for wondering whether something will be eligible for reconciliation is musing whether it will make it through the “Byrd Bath”. 

Staff will try to rewrite a provision many times to keep it in, but sometimes the ruling of the parliamentarian can’t be overcome and that thing can’t get done through reconciliation (an example is the minimum wage hike that Democrats weren’t successful in including in the American Rescue Plan earlier this year).

Seventh, the House and Senate vote on the budget reconciliation bills.  If they are different, they need to resolve the differences between them.  In doing so, they need to make sure that no committee goes over their budget allocation. They can either do a formal conference (where staff and Members sit in a (zoom?) room and negotiate areas of disagreement), or “ping pong” different versions of the bills back and forth until an agreement is reached.

Eighth, the House and Senate pass the same version of the reconciliation bill, the President signs it and then it is law.

This sounds complicated, remind me why we’re doing this again?

Budget reconciliation is certainly not the main way that we would like to see policy made, but it’s the option we have right now to spend money in a way that advances policy that a slim majority in the Senate can actually get through under the Senate’s current rules. 

On the climate front, it’s clear we need to act now. The most recent IPCC report is horrifying and we have about a decade to get ourselves on the right path to limit overall global temperature rise to 1.5 deg C or we are going to be in a world of hurt – every 0.5 degree rise in global temperature will lead to more frequent and intense storms, heatwaves, agricultural droughts, intensification of heavy precipitation events,…the list goes on and on. The US can and must do its part, including enacting policies to deliver on the emissions reduction commitment of 50-52% below 2005 levels by 2030 that President Biden made earlier this year. Unfortunately, combatting climate change is nearly impossible to do legislatively due to years of disinformation campaigns and special interest dollars.  So, we need to use all of the options available to us – budget reconciliation can do a lot to move the needle, especially when done in concert with stringent regulations that we hope the Biden administration will put in place. 

What’s happening now?

The Senate finished up with their bipartisan infrastructure bill (I have thoughts) and turned immediately to the budget resolution. The Senate pulled an all-nighter on Tuesday Aug 10 and passed it in the wee hours of Wednesday morning. The House came back to DC this week to pass the budget resolution – it wasn’t easy and took two tries, indicating that this process is not going to be smooth sailing.  The Senate also will have challenges – Senator Sinema (D-AZ) agreed to vote for the budget resolution, but has noted that she isn’t comfortable with the topline number and Senator Manchin (D-WV) has also expressed some concerns with budget resolution.  Unfortunately, this is not a slam dunk.

Assuming the budget resolution moves forward, in September, we will see the House and Senate committees write the actual details of the reconciliation bill. The House has announced that they are having committee mark ups (committee business meetings where they offer amendments and literally “mark up” the base text) in September. The deal that Speaker Pelosi struck with the moderate Democrats around passage of the budget resolution promised that the Infrastructure bill will be passed by the House by September 27, which also sets the clock for the budget reconciliation bill since the White House and Congressional majority leadership have said they are going to move together.

What we want to see in a climate reconciliation package, and how you can help

As you might expect, we have lots of ideas – on the zero-emission transportation policies that must be included, on climate resilience and adaptation, on how to structure a Clean Electricity Payment Program to dramatically reduce the carbon intensity of electricity production.  We are working with partner organizations and ensuring that Congress hears our ideas as they structure their bills.

Despite how obvious it must seem that Congress should act on climate, this is not going to be easy. We need to keep the pressure up to make sure that Congress takes this opportunity seriously and does everything they can to move forward with this spending plan as quickly as possible to make a real effort to stave off the worst effects of the climate crisis. We can make serious progress on clean electricity, clean transportation, limiting the impacts of extreme heat in places like Arizona, investing in a fair transition for coal workers and coal-dependent communities, and advancing climate justice for disadvantaged communities, if Congress takes on the mantle of climate leadership now.

How can you help?  Simple – call your legislators today to tell them that we need bold climate action in a reconciliation bill and ask them to stand up for science and do what is needed to act on climate.

* Yes, yes, there are some things that aren’t subject to the filibuster anymore. Senator Reid changed the Senate rules in 2013 to allow non-Supreme Court (SCOTUS) Judicial nominees and Agency nominees to get through with a simple majority vote and Senator McConnell changed the rules on SCOTUS nominations to get Justice Gorsuch confirmed in 2017.

** The Senate parliamentarian, Elizabeth MacDonough, is a staff member of the Senate who knows all of the rules and procedures of the Senate and advises all members of the Senate (and their staff) on them.  She is one of the people you always see on the floor of the Senate when you watch CSpan, sitting below the Presiding officer.  The Senate procedure rulebook is enormous and the parliamentarian (and her small staff) know all of them and offer interpretations to Members and their staff when asked.  There is also a House parliamentarian who plays an important role in House procedure, but is not key in the reconciliation process.