Reconciliation Update; April 9, 2021

News reports earlier this week said the Senate Parliamentarian has ruled that Senate Democrats may adopt multiple rounds of budget reconciliation on a single year’s budget resolution. While the full ruling has not been made public, the reports suggest the ruling creates more procedural avenues for Senate Democrats as they look to advance priorities in a 50-50 Senate. 

What It Means

Background on Reconciliation

The Senate typically requires 60 votes to move forward on legislation. Absent those 60 votes, Senators objecting to the procedural move can hold the floor indefinitely through a filibuster. 

However, Senate rules also allow for the passage of certain fiscal matters with a simple majority through the budget reconciliation process.  Under this process, the Congress must first pass a budget resolution that provides instructions to the Congress on how much spending can increase or decrease in the provision. However, only certain policy changes can pass through the reconciliation process – the Parliamentarian must rule that the policy change is compliant with certain budget procedures, otherwise known as the so-called Byrd rule. 

Reconciliation and the Current Congress 

Congressional Democrats used the reconciliation process to clear the American Rescue Plan Act earlier this year. In doing so, Democrats used the Congressional budget resolution for FY 2021, as last year’s Congress never passed the annual budget resolution.

The prevailing wisdom on Capitol Hill was that Democrats now had two opportunities to pass legislation via the reconciliation in the current Congress – one opportunity using the FY 2022 budget resolution, and one opportunity using the FY 2023 budget resolution.  

As such, most observers anticipated that the American Jobs Plan proposed by President Biden would likely become the focal point of the FY 2022 budget reconciliation package. Some speculation was also growing that Democrats might add other health provisions to that package, including the contents of a “soft infrastructure” package we expect the Biden Administration to release later this month. 

The latest news

On Monday, Majority Leader Schumer’s office released a statement indicating that the Senate Parliamentarian ruled that Senate Democrats can amend the current budget resolution – for FY 2021 – to generate another opportunity for a reconciliation package.  

Under that scenario, Congressional Democrats will have at least one more opportunity to pass a reconciliation package using the existing budget authorities.  Previously, it was thought Democrats would have to pass a budget resolution for FY2022 before having another shot at using use reconciliation.  

We have yet to see the actual ruling and will update you as we have more details on what exactly the ruling means for both the budget process and the remainder of the congressional agenda.

Resources

CRS Report on the budget reconciliation process