Reconciliation

The annual budget resolution adopted by Congress may include special "reconciliation" instructions. The original purpose of the reconciliation process as enacted in the Congressional Budget and Impoundment Control Act of 1974 was to allow Congress at the end of a fiscal year to expeditiously enact legislation that would make minor adjustments to both spending and revenue levels. Historically, however, Congressional majorities have used the reconciliation process to pass large-scale spending and revenue policies, mainly because reconciliation allows Congress to expedite legislation under a more limited (i.e. filibuster-proof) set of procedural rules.

If Congress chooses to use the reconciliation process, a special set of procedures are followed. First, Congress passes reconciliation instructions in the annual budget resolution, which requires only a simple majority vote and is granted only a limited time for debate. Reconciliation instructions require committees in Congress to draft legislation that would change federal mandatory spending or revenue policies by a specified amount – although the instructions do not necessarily include actual changes to federal laws and programs.

Congressional committees that receive reconciliation instructions must submit their reported policies back to the House and Senate Budget Committees by a date specified in the budget resolution. The Budget Committee then takes all the committee reports and combines them into one omnibus reconciliation bill, after which they may be considered by the full House and Senate. Like the budget resolution itself, the reconciliation bill requires only a simple majority vote to pass and debate is limited to a specified amount of time. After both Houses pass reconciliation bills, a conference committee meets to resolve any differences. After a favorable majority vote in both Houses on the final omnibus reconciliation bill, it is sent to the President for his approval.

Reconciliation is an extremely powerful procedural vehicle in the budget process because it enables a Congressional majority to circumvent the 60 vote filibuster option in the Senate. Only a majority vote is needed in the Senate to adopt a budget resolution that calls for the reconciliation process, and only a majority vote is required to adopt the reconciliation bill that Congress considers to carry out the instructions in the budget resolution. A reconciliation bill is subject to strict rules in the Senate because of its filibuster-proof status. These rules limit the scope of a reconciliation bill so that only certain policies may be considered under the expedited process.