A $1.5 trillion question: What is budget reconciliation? Here's an explainer

Kelsey Snell in 2018.

A copy of the Tax Cuts and Jobs Act conference report sits at the U.S. Capitol on Dec. 18, 2017. The legislation was passed using the budget reconciliation process. Chip Somodevilla/Getty Images hide caption

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A copy of the Tax Cuts and Jobs Act conference report sits at the U.S. Capitol on Dec. 18, 2017. The legislation was passed using the budget reconciliation process.

Chip Somodevilla/Getty Images

This story is part of "The Basics" from The NPR Politics Podcast, where we regularly explain a key idea behind the news we talk about on our show. Subscribe to The NPR Politics Podcast here.

Democratic lawmakers appear close to finalizing a trillion-plus dollar economic plan that, if passed, would make sizable federal investments in healthcare, immigration and climate change programs.

Unlike the infrastructure deal that passed the Senate with the support of 19 Republicans, this plan is almost certain to pass without any Republican support.

That is despite the fact that Democrats have just 50 votes in the Senate, too small a majority to overcome the 60-vote threshold that has become all but required to advance legislation through the chamber.

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To overcome that hurdle, they plan to use an arcane process known as budget reconciliation. It allows them to skirt Republican opposition and approve a bill with a simple majority vote — with Vice President Harris there to break the tie.

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But the reconciliation process is complicated — and it has taken months to hammer out a deal that meets its complex requirements and has the support of every Senate Democrat.

What is budget reconciliation?

For a bill to become law, it of course needs to pass both chambers of Congress: the House of Representatives and the Senate.

In general, in the House of Representatives, a bill passes when at least 218 members support it — half of the 435 total representatives, plus one. If there are vacancies or absences, a bill passes if it gets support from a majority of the members who vote.

In the Senate, though, things are more complicated: Long-standing rules require that most legislation should be supported by more than half of senators, at least 60 out of 100.

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Because it is uncommon for one party to win 60 seats or more, senators often need to choose between:

  1. not acting when the two parties disagree or
  2. writing a bill that both parties can support.

Sometimes, though, the party in power can use special rules to pass a small number of budget bills in the Senate each term with just 50 votes. That is reconciliation. (In a Senate divided 50-50 between the parties, the vice president breaks the tie.)

As you might guess, budget reconciliation was meant to help Congress pass budget bills. Now, though, it is used to pass all sorts of things.

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Democrats used reconciliation to pass some health care changes in 2010, and Republicans used it to pass tax cuts in 2017, as well as in their failed attempt to repeal the Affordable Care Act during Donald Trump's presidency. It was also used to pass a COVID-19 relief package early in Biden's administration.

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Why doesn't Congress use budget reconciliation to pass every bill?

It makes sense to ask why a party with a majority in the Senate, but fewer than 60 members total, wouldn't use this special tool to pass every piece of legislation that it hopes to.

But budget reconciliation isn't as simple as just adding policies to a bill and putting it up for a vote. Reconciliation can usually be used just once each year. There are also special rules for what counts as a budget item and what doesn't.

What are the rules for what can be passed with budget reconciliation?

The process is set by a budget rule, known as the "Byrd rule," that's named for its chief author, former Sen. Robert Byrd, D-W.Va.

The rule says that reconciliation can be used only for things that change spending (the money the federal government pays out) or revenue (the money the federal government takes in).

The list of Byrd-rule breakers includes measures:

If that sounds complicated to you, it is! And senators often have provisions that they care about stripped from the bill for breaking one or more of the rules.