A Budget Reconciliation Primer: No Peaches & Herb

The term “reconciliation” tends to evoke feelings of rapprochement and reunion.  But unlike Peaches & Herb’s 1979 chart-topping hit, “Reunited (and it Feels So Good),” reconciliation has no romantic meaning when it pertains to the Federal budget.

In the history of the republic, budget reconciliation is a relatively recent legislative tool.  It was enacted on July 12, 1974 as a component of the Congressional Budget and Impoundment Control Act of 1974 (P.L. 93-344).  The act created the House and Senate Budget Committees, as well as the Congressional Budget Office (CBO), whose role is “to provide the Budget Committees and the Congress with objective, impartial information about budgetary and economic issues,” according to the CBO’s website.

As passed, the act provided for two concurrent budget resolutions each year.  The first concurrent resolution, reflecting the consensus of both the Senate and the House of Representatives, would be passed on or before May 15 of each year, for the fiscal year beginning October 1 of that same year, with a second concurrent resolution to be completed by September 15.  According to former Senate Parliamentarian Robert Dove, the use of the word “reconciliation” made much more sense in the context of the early origins of the practice.  It was intended to “reconcile” the results of the appropriations process (typically occurring in the spring and summer) with the second budget resolution of each fiscal year.  The reconciliation process itself (as mandated by law) was to be completed by September 25.

Moreover, the law stipulated that Congress could not adjourn until these actions were completed.

In their 2005 Public Budgeting and Finance article, scholars Roy Meyers and Philip Joyce described reconciliation as a “relatively unimportant procedural device in the original [act].”  They further observed that:  “In 1980, however, the Budget Committees experimented with reconciliation as a method of putting teeth into the budget resolution.  Just one year later, the second budget resolution was dropped and reconciliation enabled reductions in mandatory spending; it also effectively cut discretionary appropriations by reducing authorization ceilings—an approach that has not been repeated.  Once the procedure of reconciliation became more important, it became the preferred way of enacting major policy changes.”

Key to the tool’s success in achieving lofty policy objectives is the fact that it cannot be filibustered in the Senate; only a simple majority is required for passage, and the time for debate is limited.  Furthermore, with the adoption of the so-called “Byrd Rule,” any amendments must be considered germane, unlike other bills considered in the Senate.

As described on the House Rules Committee website, the Byrd Rule, established by the late Sen. Robert Byrd (D-W.Va.) when he was the Senate Majority Leader, prohibits the Senate “from considering extraneous matter as part of a reconciliation bill. … The definition … remains subject to considerable interpretation by the presiding officer (who relies on the Senate Parliamentarian).  The Byrd rule is enforced when a Senator raises a point of order during consideration of a reconciliation bill or conference report.  If the point of order is sustained, the offending title, provision or amendment is deemed stricken unless its proponent can muster a 3/5 (60) Senate majority vote to waive the rule. … The Byrd rule may be invoked only against reconciliation bills, amendments thereto, and reconciliation conference reports. …  The Byrd rule is not self-enforcing.  A point of order must be raised at the appropriate time to enforce it.”

Over the years, the process has been further amended.  In addition to dropping the second concurrent resolution for a given year, the deadline for completion of the remaining concurrent resolution has been moved up to April 15.  Reconciliation can be used for only three purposes:  to address revenues (taxes), mandatory spending (entitlements), and/or the debt limit.

In order for the policy prescriptions in budget resolutions to become law, the concurrent resolutions must include instructions for the subsequent reconciliation process.  Since the resolutions themselves are not signed into law by the president, it falls to the resulting reconciliation bill to carry forward the legislative intent of the Congress.  If the president vetoes the reconciliation bill, Congress must overturn the veto with a two-thirds vote in each Chamber.

With its streamlined procedures, budget reconciliation is often reserved for issues that would not otherwise muster a filibuster-proof (60-vote) majority in the Senate.  Given the circumstances similar to the political landscape of 2015, where Congress is controlled by one party while the president is from another, any resulting budget reconciliation (almost certain to be vetoed with insufficient votes to override) may be little more than a political messaging tool, designed to draw clear philosophical distinctions between the parties ahead of the next election.

Reconciliation has been passed by Congress 23 times, including its first use in 1980.  Twenty of those bills have become law, while three were successfully vetoed.  In 1981, the process was used to enact major spending cuts as part of President Ronald Reagan’s ambitious first-year agenda.  In the 1980s and 1990s, reconciliation was used for several deficit-reduction packages, including the Gramm-Rudman-Hollings bill and others.  It was the vehicle for welfare reform in 1996 and for tax cuts during President George W. Bush’s administration.  After Senate Democrats lost their filibuster-proof majority with the election of Scott Brown (R-Mass.), reconciliation was used in 2010 to pass the Affordable Care Act, also referred to as “Obamacare.”

In 2015, following the GOP takeover of both chambers of Congress, the use of budget reconciliation is not likely to yield any lasting “feel good” policies, as President Obama is sure to thwart any efforts to overturn his expansive agenda.  And to the Republicans’ consternation, they face extremely long odds in convincing enough Democrats to join them in any veto override.

For Peaches & Herb, “our quarrel was such a way of learnin’ so much.”   Notwithstanding the potential for legislative achievement through budget reconciliation, the quarreling factions in Washington, D.C. are nowhere near being “reunited.”