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What is budget reconciliation? An explainer on the fast-track process for Covid relief


WASHINGTON — Democrats in Congress have begun to utilize an arcane process known as reconciliation to fast-track President Joe Biden’s $1.9 trillion Covid-19 relief package.

Most importantly, the measure allows them to circumvent the usual 60-vote threshold in the Senate, which would otherwise require them to get Republican support. As the U.S. economy continues to reel from the crisis, Biden and many Democrats say Americans are less concerned about process and more so about delivering relief.

“Nobody in my state knows what the hell reconciliation is. They believe that Joe Biden said, ‘If we win Georgia, we’re getting $2,000 checks.’ And we won Georgia. So we have an obligation to follow through,” Sen. Chris Murphy, D-Conn., told NBC News.

Here are some questions and answers on how the process works.

What is reconciliation?

Senate rules require that most pieces of legislation get 60 votes, which under the current Senate would mean all of the Democrats and 10 Republicans.

But “reconciliation” is a process created under the Congressional Budget Act of 1974 that allows a simple majority to pass certain types of legislation. It was set up to allow lawmakers to change policy on spending or taxes to keep the nation’s budget in line.

Isn’t that abnormal?

Not really. It has been used by Congress during the last four presidential administrations, when the same party controlled the legislative branch and the White House.

Reconciliation was used during Donald Trump’s and George W. Bush’s presidencies to cut taxes. While Barack Obama was in office, Congress used it to pass parts of the Affordable Care Act. During Bill Clinton’s administration, it was used it to raise taxes.

So Democrats can pass a bill without Republicans?

Because the current Senate is split 50-50 and the vice president, who casts the tiebreaking vote, is a Democrat, then a bill created through reconciliation could pass without any Republican support.

Then why don’t Senate leaders use it all the time?

There are limitations. The process is only permitted once per fiscal year, and it can only be used to change — or “reconcile” — laws related to taxes and spending.

So how does the process work?

The Senate and House both passed the budget resolution. Next, the Budget Committee will draft instructions to other committees to craft legislation. Those bills will be able to evade the filibuster in the Senate.

What if the bill increases the deficit?

The reconciliation rules allow bills that raise the deficit, but only for 10 years. Laws that the Congressional Budget Office determines will raise the deficit outside the 10-year window are not eligible. This is why some items passed through reconciliation, like Trump’s individual tax cuts, were made to be temporary.

Senate Appropriations Chairman Robert C. Byrd, D-W.Va., reads his opening statement during the markup of a bill on May 15, 2008.Scott J. Ferrell / CQ-Roll Call, Inc via Getty Images

What is the Byrd rule?

It’s a law named after former Sen. Robert Byrd, D-W.Va., that allows a provision to be removed from a reconciliation bill if a senator objects and it is deemed “extraneous” to the budget. It basically makes sure no unrelated provisions can be snuck into the bill. The Senate parliamentarian is tasked with deciding what is and isn’t “extraneous.”

What if it’s not exactly a new tax or spending item but affects the budget?

There are some gray areas. If there’s a dispute, the Senate parliamentarian would settle it. In theory, a majority of senators could overrule the parliamentarian, but that would be unusual.

Why do senators keep saying the phrase ‘Byrd bath’?

That’s an insider-y term for the process of cleansing the reconciliation bill of provisions that don’t comply with the Byrd rule.

Can $1,400 checks and jobless benefits pass in this process?

Yes, policies like those are clearly budgetary and shouldn’t have a problem passing through reconciliation. Those are core components of the Democratic virus relief effort.

What’s an example of a policy that can’t pass?

Regulatory measures, such as gun control or rewriting immigration rules, are likely to run afoul of the Byrd rule and therefore cannot pass under this process.

Can the minimum wage be raised in reconciliation?

There’s some dispute about this. Many budget experts believe that would be regulatory and can’t be passed under reconciliation. But some, like incoming Senate Budget Chairman Bernie Sanders, I-Vt., take a more expansive view of the process and say it can be used.



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