An Insider’s Guide of Things to Watch During the Reconciliation Process
I’ve survived two separate budget reconciliation processes which, in this town, makes me something of an expert.
As a long-time staffer for the Senate Energy and Natural Resources Committee (ENR), I worked on legislation to meet the committee’s reconciliation instructions in 2005 and again in 2017. While the first attempt managed to pass the Senate, it ultimately died in conference negotiations with the House of Representatives. But over a decade later, I successfully shepherded the enactment of ENR’s reconciliation language into law as part of the Tax Cuts and Jobs Act (P.L. 115-97).
Here’s what I’ve learned about reconciliation along the way
First, the siren call of reconciliation can be irresistible. The 60-vote threshold needed to avoid a Senate filibuster is quite the hurdle – which is why Congress established the budget reconciliation process to begin with. Reconciliation was intended to fast-track, via a simple majority vote, revenue and spending measures to align with the annual budget resolution. But, as foreseen by then-Senator Robert C. Byrd (D-WV), majority parties have been unable to resist the lure of undertaking major policy changes through the use of this filibuster-circumventing maneuver.
By nature, reconciliation is a partisan exercise – it really only works under single party rule. The so-called ‘Byrd Rule’ was approved by the Senate to prevent the majority party from ramming through non-budgetary legislation that could not otherwise advance under regular order. The Byrd Rule’s prohibition on extraneous policy language outlines six possible violations, including having no budgetary impact; having a ‘merely incidental’ budget impact; or being outside the reporting committee’s jurisdiction.
Of course, the Democrats now control the White House and both Congressional chambers – a trifecta that unlocks the reconciliation tool. Time may be short though since, if history is any indication, the pendulum could easily swing the Republicans’ way in the midterm elections. Given the political reality, and their successful use of reconciliation to muscle through President Biden’s $1.9 trillion coronavirus stimulus bill in March, it’s no wonder Congressional Democratic leaders are eyeing the use of the budget process once again. Without it, many fear the President’s entire Build Back Better agenda is at risk.
Second, while reconciliation is by its nature partisan, it’s not easy or quick. The only expedited part is the Senate’s floor consideration, with debate limited to 20 hours on the bill and 10 hours on the conference report. But actually getting to the floor is a multi-step slog that can take months. In a nutshell:
Congress must first pass a budget resolution that instructs specific committees to produce legislation to either increase or reduce the deficit. It’s worth noting that Congress has already passed the FY21 budget resolution which was used for the first reconciliation measure. The Senate Parliamentarian has ruled the budget resolution can be used for a second reconciliation round – but it still needs to be amended to provide new committee instructions.
Committees then markup their reconciliation text in open business meetings and report it to the Budget Committees;
The Budget Committees then convene open business meetings to compile the disparate committee-approved pieces and report the combined legislation to the chamber floors;
The House and Senate then debate and pass their respective reconciliation bills;
The chambers next convene a conference committee to reach agreement on the legislative text;
Both the House and Senate then pass identical versions of the resulting conference report; and
The measure is sent to the President for a signature.
Behind the scenes, committee staff spend countless hours drafting language, vetting text with the Budget Committees and the Parliamentarian’s Office, and working with the Congressional Budget Office (CBO), as well as jurisdictional federal agencies, to produce the CBO score required to prove the committee has met its reconciliation instruction. If it sounds like a lot, it is. Although some steps were cut from this process back in March – namely that the Senate bypassed its committees and worked off the House-passed bill – the upper chamber plans to play this time around and produce its own legislation.
We’ve heard plenty of confident pronouncements that the next reconciliation measure can be wrapped up by the 4th of July, but with the Senate’s 50-50 split, there’s no room for error. It’s really hard to see it getting done before Thanksgiving, and even that seems optimistic.
Sen Lisa Murkowski huddles with members of her energy committee staff, including Lot Sixteen's Kellie Donnelly [right] and Colin Hayes [middle], In July 2015 following a marathon markup for a comprehensive energy bill
Third, the Parliamentarian has a tough job. There’s been a ton of vitriol thrown at the Senate Parliamentarian which, as a former staffer, I find unfair and infuriating. The Parliamentarian’s Office is non-partisan by design and necessity. Elizabeth MacDonough was appointed by then-Democratic Senate Majority Leader Harry Reid (D-NV) and has now served under leaders from both parties. She doesn’t make the rules she’s tasked with interpreting. And it’s not her job to secure a reconciliation glide path for either side’s proffered policy.
In 2017, I spent a lot of time with MacDonough and her team during the reconciliation process. We were also Stennis Congressional Fellows together in the 110th Congress. She is whip-smart, tough, and fair. Appearing before the Parliamentarian’s Office for the hilariously named ‘Byrd-bath’ – where legislative text is probed for possible Byrd Rule violations – is not unlike appearing before an appellate court. Staffers are asked to submit detailed, written memos, including source references, in advance of meetings. Those invited to present their oral arguments to the Parliamentarian’s internal team must be prepared to face a hot bench and answer pointed questions. Initial legislative attempts rarely pass muster so the entire Byrd-bath review begins anew with revised text. Later in the process, prior to floor consideration, the Byrd-bath process includes arguments from the opposing side, and the audience expands to include bipartisan Leadership and Budget Committee staff. The vetting continues until the Parliamentarian rules you have a Byrd Rule-compliant piece of legislation or you run out of time.
Fourth, the centerpiece of Biden’s climate goals may not survive. Many view the Clean Energy Standard (CES) as integral to achieving President Biden’s climate goals, and see reconciliation as the only means of securing it. I think that’s right. The CES policy has been under consideration by Congress in some form or another (e.g., renewable portfolio standard, renewable energy standard) since at least the 1990s. It has never had, nor does it now, the 60 votes needed to pass by regular order in the Senate. The allure of reconciliation’s 51-vote threshold beckons.
But the challenge for the CES is that the ‘Byrd-bath’ could easily become a ‘blood bath.’ Component pieces of the new federal program, like an Alternative Compliance Payment or perhaps a well-crafted credit trading program (with a federal budgetary hook) could likely be allowed. Purely policy initiatives, like protecting existing state CES programs, providing technical assistance, or offering workforce training, will not. The resulting Frankenstein reconciliation monster will not resemble the robust and nuanced CES program sought by the majority. And even that may not find enough support in the Senate.
The first real glimpse into the process will be to see which committees receive reporting instructions. There’s already talk that Senate Finance, and not ENR or even the Environment and Public Works Committee, will be directed to produce CES text for reconciliation purposes – specifically to meet the Byrd-Rule requirements.
Byrd-Rule watchers like me will be keeping our binoculars handy in the weeks and months to come as the process unfolds.
