Congressional Deskbook, 5th Edition, by Michael L. Koempel and Judy Schneider
§ 9.110 Reconciliation Legislation
Beginning in 1980, Congress has used reconciliation legislation to implement many of its most significant budget policies. Section 310 of the 1974 Congressional Budget Act sets forth a special procedure for the development and consideration of reconciliation legislation. Reconciliation legislation is used by Congress to bring existing revenue and spending law into conformity with the policies in a budget resolution. Reconciliation is an optional process, but Congress has used it more years than not since 1980.
The reconciliation process has two stages—the adoption of reconciliation directives in the budget resolution and the enactment of reconciliation legislation that implements changes in revenue or spending laws. Although reconciliation has been used for some time, specific procedures tend to vary from year to year.
Reconciliation is used to change the amount of revenues, budget authority, or outlays generated by existing law. In a few instances, reconciliation has been used to adjust the public-debt limit. On the spending side, the process focuses on entitlement laws; it may not be used, however, to impel changes in Social Security law. Reconciliation sometimes has been applied to discretionary authorizations, which are funded in annual appropriations acts, but this is not the usual practice.
Reconciliation Directives
Reconciliation begins with a directive in a budget resolution instructing one or more designated committees to recommend legislation changing existing law. These directives have three components: (1) they name the committee or committees directed to recommend legislation; (2) they specify the amounts of changes in revenues or outlays that are to be achieved by changes in existing law, but do not indicate how these changes are to be made, which laws are to be altered, or the programs to be affected; and (3) they usually set a deadline by which the designated committee or committees must recommend the changes in law. The directives typically cover the same fiscal years covered by the budget resolution. The dollar amounts are computed with reference to the Congressional Budget Office baseline. Thus, a change represents the amount by which revenues or spending would decrease or increase from baseline levels as a result of changes made in existing law.
Although the instructions do not mention the programs to be changed, they are based on assumptions concerning the savings or deficit reduction (or, in some cases, increases) that would result from particular changes in revenue provisions or spending programs. These program assumptions are sometimes printed in the reports on the budget resolution. Even when the assumptions are not published, committees and members usually have a good idea of the specific program changes contemplated by the reconciliation directives.
A committee has discretion to decide the legislative changes to be recommended. It is not bound by the program changes recommended or assumed by the Budget Committees in the reports accompanying the budget resolution. However, a committee is expected to recommend legislation estimated to produce the dollar changes delineated in its reconciliation directives.
When a budget resolution containing a reconciliation directive has been approved by Congress, the instruction has the status of an order by the House and Senate to designated committees to recommend legislation, usually by a date certain.
Development and Consideration of Reconciliation Measures
When more than one committee in the House and Senate is subject to reconciliation directives, the proposed legislative changes are consolidated by the Budget Committees into an omnibus bill. The 1974 Congressional Budget Act does not permit the Budget Committees to revise substantively the legislation recommended by the committees of jurisdiction. This restriction pertains even when the Budget Committees estimate that the proposed legislation will fall short of the dollar changes called for in the instructions. Sometimes, the Budget Committees–working with the leadership–develop alternatives to the committee recommendations. These alternatives may be offered as floor amendments to achieve greater compliance with the reconciliation directives.
The 1974 act requires that amendments offered to reconciliation legislation in either the House or the Senate be deficit-neutral. To meet this requirement, an amendment reducing revenues or increasing spending must offset these deficit increases by equivalent revenue increases or spending cuts. In addition, nongermane amendments may not be offered in either chamber.
During the first several years of experience with reconciliation, the legislation contained many provisions that were extraneous to the purpose of the reconciliation measures, such as reducing the deficit. The reconciliation submissions of committees included such things as provisions that had no budgetary effect, that had a budgetary effect merely incidental to a significant policy change, or that violated another committee’s jurisdiction. In 1985, the Senate adopted a rule (commonly referred to as the Byrd rule, after Senator Robert C. Byrd, D-WV) on a temporary basis as a means of curbing these practices. The Byrd rule has been extended and modified several times over the years. In 1990, the Byrd rule was incorporated into the 1974 Congressional Budget Act as section 313 and made permanent. The Senate, nonetheless, may waive the Byrd rule by unanimous consent or by a waiver motion requiring a three fifths vote of the membership. Although the House has no rule comparable to the Senate’s Byrd rule, it may use other devices to control the inclusion of extraneous matter in reconciliation legislation. In particular, the House has used special rules to make in order amendments to strike extraneous matter. (See § 8.90, Rules Committee and Special Rules.)
Senate debate on reconciliation legislation is limited to twenty hours. The Senate may continue to consider amendments, motions, and appeals after that time, but no additional debate is allowed. The House is not restricted by the 1974 act in debate on reconciliation legislation, but it typically adopts a special rule limiting general debate, amendments, and other floor procedures.
Source: § 9.110, “Reconciliation Legislation,” Congressional Deskbook, 5th Edition