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The Ticking Budget Reconciliation Clock

Like Cinderella, Democrats in Congress are working against a ticking clock to enact a reconciliation package before they turn into pumpkins.

Late last week, after another scorching consumer inflation report, Sen. Joe Manchin (D-W.Va.) said no — again — to voting for the Biden administration’s Build Back Better plan. The senator had been in talks with the White House and Senate Majority Leader Charles Schumer (D-N.Y.) for months on a slimmed down plan, but on Friday said he would not vote for any package that raised taxes on corporations, small businesses, and American families, or that provided significant new funding to address climate change.

Instead, the senator indicated that he only will support extending Affordable Care Act subsidies and efforts to rein in the price of prescription drugs.

At least for now. The senator did indicate he might be open to more spending after he sees the next inflation report, which will be out in August.

That statement means a vote on a broader Build Back Better package is off the table before lawmakers leave for their month-long summer break in a couple weeks. But what about after? Could Democrats get more done after the August recess?

Sure — but Congress’ budget reconciliation rules are going to make that task very hard. This week, let’s remind ourselves what budget reconciliation actually looks like.

What Is Budget Reconciliation?

As the House Committee on the Budget explains, budget reconciliation is a special process “that makes legislation easier to pass in the Senate.” Specifically, the process allows legislation to pass in the upper chamber of Congress with a simple majority of votes instead of the 60 needed to overcome a filibuster for non-reconciliation bills.

The reconciliation process requires that reconciliation rules must be written into the annual congressional budget resolution. The budget resolution, as readers may remember, is an outline of future federal spending. It does not have the force of law and does not need to be signed by the president. It also cannot be filibustered; lawmakers only need 50 Senate votes for it to pass that chamber and a majority in the House.

“If the budget calls for reconciliation, it tells certain committees to change spending, revenues, deficits, or the debt limit by specific amounts. Each committee writes a bill to achieve its target, and if more than one committee is told to act, the Budget Committee puts the bills together into one big bill,” explains the House Budget Committee. “That bill has special status in the Senate. Like the budget, it cannot be filibustered, and only needs a simple majority to pass.”

Nearly one year ago, Democrats approved a budget resolution that outlined up to $3.5 trillion in new spending on housing, education, child and dependent care, climate change action, and health care. Those budget reconciliation rules also allowed for a deficit increase of up to $1.75 trillion and new or increased taxes to pay for the rest of the $3.5 trillion in new spending.

In other words, the budget resolution approved by Congress last August provided the contours for the original version of the Build Back Better Act, and the rules that would allow Democrats to approve that plan with a bare majority vote in the Senate.

If that explanation makes getting the Build Back Better Act enacted sound easy, think again. As the last several months have shown, one senator — or perhaps two since no one yet knows how Sen. Kyrsten Sinema (D-Ariz.) would vote on a slimmer-down version of Build Back Better — still can stall progress on a budget reconciliation. Getting to 50 votes in a narrowly divided Senate remains a tough task.

But let’s say Sen. Sinema supports Build Back Better and Sen. Manchin comes on board in September. Then getting legislation to President Joe Biden’s desk it will be easy … right?


Senate Budget Reconciliation Floor Debate Could Take Days

While Senate rules limit debate on a reconciliation bill to 20 hours, those 20 hours, as we will soon describe, can stretch across days or even weeks as an unlimited number of amendments may be considered and voted on, and procedural motions are permissible. The next consumer inflation reports come out on August 10 (for July) and September 13 (for August). Presumably, Sen. Manchin, Senate Majority Leader Schumer, and the White House will be in close touch before then, negotiating what could be in another bill, but they are working against a clock.

Budget reconciliation rules expire at the end of the day on September 30, along with the federal government’s fiscal year. After that, the glass slipper that is the budget reconciliation disappears. Majority Leader Schumer would again need 60 votes to pass the Build Back Better plan.

The Senate returns from August recess on September 6. At best, that gives them 19 working days until the stroke of midnight on September 30.

As if the ticking clock is not enough, there also is something called the Byrd rule. As the House Budget Committee explains, this rule, named for the late Sen. Robert Byrd (D-W.Va.), is meant to prevent “the use of reconciliation to move a legislative agenda unrelated to spending or taxes.” Specifically, the rule defines “extraneous” as measures:

  • With no budgetary effect (i.e., no change in outlays or revenues);

  • That worsen the deficit when a committee has not achieved its reconciliation target;

  • That are outside the jurisdiction of the committee that submitted the title or provision;

  • That produce a budgetary effect that is merely incidental to the non-budgetary policy change;

  • That increase deficits for any fiscal year outside the reconciliation window; and

  • That recommend changes in Social Security.

Any senator can raise a point of order questioning whether a provision is “extraneous.” If a senator does so, the Senate parliamentarian decides whether there is a Byrd rule violation. Byrd rule points of order can be waived if 60 senators agree to do so.

If Build Back Better makes it to the Senate floor, we can expect Republican senators to try to delay progress past September 30 by raising and forcing painstakingly long votes on points of order.

According to Politico yesterday, Republicans already are preparing Byrd-rule related points of order to slow do the health care portion of the Build Back Better that Sen. Manchin has agreed to, and that senators are supposed to vote on before the August recess. “We’re going to fight as hard as we possibly can, and we’re going to challenge as much as we believe is properly challengeable,” said Sen. Mike Crapo (R-Idaho). Sen. Crapo is the ranking member on the Senate Finance Committee, which oversees health care policymaking.

The fight will only grow stronger if Democrats try to add tax increases back into the mix in September.

And Then There Is The House …

The U.S. House already has adopted its version of the Build Back Better plan. If the Senate approves the health care measures, the House would have to produce an identical bill in order to get it to President Biden’s desk right away. If not, lawmakers will then have to form a conference committee to hash out differences.

The same would be true in September if Sen. Machin were to agree to a broader spending and tax package: both the House and Senate will have to pass the same piece of legislation or convene a conference committee.

There is one other option. As the Center for Budget and Policy Priorities (CBPP) explains, “It’s also possible that the Senate could pass a version that it pre-negotiated with the House. Both bodies then take an up-or-down vote on the final, compromise version. If they approve it, the bill goes to the president for signature.”

House Democrats already are unhappy with Sen. Machin. The party’s progressive wing is standing firm in their demands for a much broader legislative package. And there are other complications. For example: a not-insignificant coalition that is demanding that a Build Back Better plan include relief from state and local taxes for residents in high-tax states like New York and New Jersey. A senator from West Virginia who is concerned with government spending levels might not look kindly on that expensive provision.

For a larger Build Back Better plan to make it into law, some good, old negotiation is going to have to happen … and fast. Until then, we expect a small reconciliation bill that addresses only drug pricing and Affordable Care Act tax credits to advance in Congress before the August recess.

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