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Explainer: What is the Senate’s ‘budget reconciliation’ process?

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Now that the U.S. House of Representatives has passed President Joe Biden’s ambitious $1.75 trillion social policy and climate bill, the action moves to the Senate, where its fate is unclear.

Biden’s Democrats, who hold the thinnest-possible Senate majority, do not expect any Republican support for the sprawling initiative, leaving them to turn to a maneuver known as “budget reconciliation” for a second time this year.

    WHAT IS RECONCILIATION?

The reconciliation procedure enables the 100-member Senate to pass measures with a simple majority vote, instead of the 60 votes required by Senate rules to stop debates known as “filibusters.” That means Democrats, who currently control 50 Senate seats, do not have to try to get at least 10 Republicans to vote with them. Democratic Vice President Kamala Harris can break a tie, giving the party a majority.

    WHEN AND WHY WAS RECONCILIATION CREATED?

Reconciliation came into being as part of the Congressional Budget Act of 1974. It was designed to enable lawmakers to adjust spending or revenues to comply with a budget blueprint without supermajority support.

The law was one of several Congress passed in the 1970s establishing exceptions to the 60-vote filibuster rule. Others included fast-track procedures for Congress to approve trade agreements, or to limit the president’s ability to commit troops overseas.

    HOW HAS RECONCILIATION BEEN USED?

Reconciliation has become a favored route to enable a president to pass trademark legislation. It has been used over 20 times since 1980.

Then-President Bill Clinton, a Democrat, used reconciliation to raise taxes. Republicans George W. Bush and Donald Trump used it to cut them. Barack Obama, a Democrat, used it to help create the Affordable Care Act, better known as Obamacare.

Biden has already used reconciliation to pass a $1.9 trillion COVID-19 aid package. He did not need it to push through another part of his agenda, a $1 trillion infrastructure bill, because 19 Republicans in the Senate and 13 in the House supported that measure.

Majority parties cannot use the process all the time. Legislation has to have a direct budgetary impact to qualify. Reconciliation generally has not been employed more than once a year.

Biden’s Democrats can use reconciliation again this calendar year because their previous use was connected to the fiscal 2021 budget. Now they are switching to the fiscal 2022 budget.

    HOW DOES RECONCILIATION WORK?

First, the House and Senate pass budget resolutions with “reconciliation instructions” for committees. That happened in August.

The program initially called for $3.5 trillion worth of environmental and social programs promised by Biden, such as clean energy requirements for utilities, free community college, extending the child tax credit and paid family and medical leave.

The plan was whittled down after objections to the cost from centrist Democrats. Many proposals were assigned shorter periods, while some ideas like the community college spending were tossed out altogether. The measure would be financed by higher taxes on the wealthy and corporations as well as increased tax enforcement measures.

In the Senate, it is the parliamentarian’s job to identify items that should be stripped out of reconciliation bills because they look more like regulatory initiatives than fiscal matters. That happened in February when the parliamentarian ruled that a $15-an-hour federal minimum wage should not be included in the COVID-19 aid reconciliation bill.

The parliamentarian has been reviewing the 2,000-plus-page “Build Back Better” bill, and lawmakers say she has already nixed two immigration proposals that were in previous versions. Supporters hope she will approve new wording on immigration that is in the bill now.

Generally the parliamentarian’s rulings are respected by the majority. Senators would need 60 votes to overturn them.

Before the final Senate vote, there is a session called the “vote-a-rama” in which amendments can be offered until the parties agree to stop.

    PARTY UNITY REQUIRED AT THE FINISH LINE

In the end, Senate Democrats must stick together to pass the reconciliation bill, since no Republican support is expected. Democrats currently need all their members to pass the measure, but at least two moderate Senate Democrats have repeatedly expressed concerns about the “Build Back Better” plan, leaving its fate in doubt.

Senator Joe Manchin has not committed to voting for the program, and urged lawmakers to slow their rush to pass it. The West Virginia Democrat opposes the paid family leave provisions and has objected to some environmental measures such as tax incentives for electric vehicles.

Senator Kyrsten Sinema’s opposition to the initial $3.5 trillion price tag was one reason it was slashed. But like Manchin, she has still not promised publicly to back the bill.

(Reporting by Susan Cornwell; Editing by Scott Malone, Peter Cooney and Jonathan Oatis)

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SourceReuters

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