Budget Reconciliation Legislation: Development and Consideration

Budget Reconciliation Legislation:
Development and Consideration
Bill Heniff Jr.
Analyst on the Congress and Legislative Process
Government and Finance Division
Budget reconciliation is an optional two-step process, provided by the Congressional
Budget Act of 1974 (Titles I-IX of P.L. 93-344, 2 U.S.C. 601-688), as amended, that
Congress may use to assure compliance with the direct spending, revenue, and the debt-
limit levels set forth in a budget resolution agreed to by Congress.1 First, Congress
includes reconciliation instructions in a budget resolution directing one or more
committees to recommend changes in statute to achieve the levels of direct spending,
revenues, and the debt limit agreed to in the budget resolution. Second, the legislative
language recommended by committees is packaged “without any substantive revision”
into one or more reconciliation bills, as set forth in the budget resolution, by the House
and Senate Budget Committees. In some instances, a committee may be required to
report its legislative recommendations directly to its house. Once reported, reconciliation
legislation is considered under special procedures on the House and Senate floor. For
more information on the budget process, see the CRS Guides to Congressional Processes
at [http://www.crs.gov/products/guides/guidehome.shtml].
Development of Reconciliation Legislation
The reconciliation process begins with the inclusion in a budget resolution of
directives to one or more committees, in each chamber, to change spending and revenue
laws. The directives typically indicate the committee(s) instructed to recommend changes
and a date by which each committee must report reconciliation legislation or submit
legislative recommendations to its respective Budget Committee. Reconciliation
directives may also specify the amount by which the statutory limit on the public debt is
to be changed and instruct the House Ways and Means Committee and the Senate Finance
Committee to recommend such a change.
The dollar amounts in reconciliation directives are based on assumptions about
existing policies and the budgetary impact of certain policy changes. In some instances,
the assumed changes in existing laws are printed in the committee or conference report
accompanying a budget resolution. Committees, however, are not bound by these
assumptions or suggestions.

1 For further information on the reconciliation process, see CRS Report RL33030, The Budget
Reconciliation Process: House and Senate Procedures, by Robert Keith and Bill Heniff Jr.

If only one committee is required to recommend legislative changes, the committee
reports its recommended legislation directly to its chamber. If more than one committee
is directed to report legislative changes, which has often been the case, those
recommendations are submitted to the Budget Committees. The House and Senate
Budget Committees are responsible for assembling the committee recommendations into
one or more omnibus bills. The Budget Act does not allow the Budget Committees to
make any substantive changes to these recommendations, even when they do not comply
with the reconciliation instructions. Any lack of compliance, however, may be addressed
during floor action, usually by an amendment offered to achieve compliance.
Consideration of Reconciliation Legislation
Once reported, consideration of reconciliation legislation is governed by special
procedures established in the Budget Act. These procedures serve to limit what may be
included in reconciliation legislation, to prohibit certain amendments, and to encourage
its completion in a timely fashion.
First, Section 310(g) of the Budget Act prohibits the consideration of any
reconciliation legislation, or any amendment to a reconciliation bill, recommending
changes to the Social Security program. In the Senate, Section 313 of the Budget Act,
commonly referred to as the Byrd rule, prohibits extraneous matter in a budget
reconciliation bill. Under the Byrd rule, extraneous matters include, among others, those
that would have no direct budgetary effect, that would increase spending or decrease
revenue when a committee is not in compliance with its reconciliation instructions, or that
would increase the deficit (or reduce the surplus) for a fiscal year beyond those covered
by the reconciliation legislation.
In both the House and Senate, the Budget Act prohibits nongermane amendments to
a reconciliation bill. In addition, Section 310(d) of the Budget Act bars the consideration
of any amendment to a reconciliation bill that would increase the deficit. Generally, an
amendment that would increase spending above the level set forth in the bill must be
offset by an equivalent amount of spending reductions, revenue increases, or a
combination of both. Section 310(d)(2) of the Budget Act, however, provides that in the
Senate an amendment to strike out a provision in the bill is always in order.
During floor action on reconciliation legislation, the Senate and House follow
different procedures and practices. In the Senate, debate on a budget reconciliation bill,
and on all amendments, debatable motions, and appeals, is limited to not more than 20
hours. After the 20 hours of debate has been reached, consideration of amendments,
motions, and appeals may continue, but without debate. The Senate often will consider
a substantial number of amendments in this situation. The Budget Act does not provide
any debate limitations on a reconciliation bill in the House. The House, however,
regularly adopts a special rule establishing the time allotted for debate and what
amendments will be in order. The House special rule typically has allowed for
consideration of only a few major amendments.