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Budget Reconciliation Explained

The GOP is considering using budget reconciliation to extend the Trump tax cuts and address immigration.

The Big Picture

Congressional Republicans are planning to extend the Tax Cuts and Jobs Act (TCJA) of 2017, which significantly lowered individual and corporate tax rates. However, they are also considering using budget reconciliation to tackle border security and immigration enforcement first.

This approach could delay tax reform and intensify partisan gridlock, as budget reconciliation allows for legislation to pass with a simple majority in the Senate but is limited to spending, revenues, and the debt ceiling.

Zooming In

What is budget reconciliation?

Budget reconciliation is a fast-track process created under the Congressional Budget and Impoundment Control Act of 1974, allowing Congress to modify federal spending and tax policies without needing 60 votes in the Senate. Instead, legislation passed under this process requires only a simple majority, making it a powerful tool in a divided government.

To initiate budget reconciliation, Congress must first pass a budget resolution that includes specific instructions for spending cuts, tax changes, or deficit modifications. These instructions are then sent to relevant committees, which draft legislative text that is later combined into a single bill.

Historically, budget reconciliation has been used to pass major tax cuts, healthcare reforms, and deficit reductions.

Budget Reconciliation History

Note: The Marriage Tax Relief Reconciliation Act of 2000 (H.R. 4810) was vetoed by President Clinton. The Restoring Americans’ Healthcare Freedom Reconciliation Act (H.R. 3762) was vetoed by President Obama. The American Health Care Act of 2017 (H.R. 1628) passed the House but did not advance in the Senate.

Budget Reconciliation, Step-by-Step

Passage of a Budget Resolution with Instructions to Relevant Committees

The House and the Senate agree on a budget through a concurrent resolution (H.Con.Res. ___ or S.Con.Res. ___). The concurrent resolution will include instructions to relevant committees and target dollar amounts or limitations on deficit impact. The concurrent resolution would go through a “vote-a-rama” in the Senate before final passage. Budget resolutions are not presented to the president for approval or veto. 

Committee Action on Reconciliation Instructions in the House

The committees of jurisdiction in the budget resolution will begin work on recommendations. A committee would mark up the recommendations like any normal piece of legislation, meaning amendments are part of the committee process. Once the committee adopts the recommendations, the text is transmitted to the House or Senate Budget committees (depending on where the effort originates). The Budget Committee in the chamber of origination will combine recommendations from relevant committees into a single piece of legislation. 

Consideration in the House

The House Rules Committee will report the reconciliation legislation to the floor under a rule. More likely than not, the rule will be closed, meaning no amendments can be offered on the House floor. A structured rule is possible to allow a limited number of amendments. As is the case with all legislation, the time for debate of the rule and debate of the underlying reconciliation bill are separate. Debate on the underlying bill is divided equally between both sides. 

“The Byrd Bath”

The text of the legislation is shared with the Senate parliamentarian, who reviews the text for any provisions that violate the “Byrd rule” or are otherwise extraneous provisions. The Senate parliamentarian’s role is only advisory. 

Committee Action on Reconciliation Instructions in the Senate

Like the House, the committee(s) of jurisdiction will markup recommendations, subject to amendment, which will be transmitted to the Senate Budget Committee to put the recommendations in legislative text. 

Consideration in the Senate

Debate on reconciliation legislation is limited to 20 hours in the Senate, divided equally between both sides. Debate on amendments is limited to two hours, one hour for each side. Procedural maneuvers–like points of order and motions to recommit to committee–are allowed. There’s another “vote-a-rama” on the legislation, during which senators may offer amendments for consideration. Votes on amendments are limited to ten minutes—the Senate votes on final passage after all the amendments are processed or otherwise dispensed with. 

Resolving Differences

Once the Senate passes the legislation, the House is notified of the action and may, if necessary, move to go into conference with the Senate. Both chambers appoint members to the conference committee. A majority of the conference committee must sign the final conference report. 


After the conference report is finalized, the chamber of origination may take the legislation to the floor. Keeping with our example, we’ll assume the House goes first. The conference report is put out under a closed rule and passed. 


Once the House takes action and transmits the legislation to the other side of the Capitol, the Senate may begin consideration. Debate of a conference report under budget reconciliation is limited to ten hours. The Senate will also go through a third and final “vote-a-rama” before a vote on final passage. 

Presentment to the President

After passage in the Senate, the reconciliation bill is presented to the President for enactment or veto. 

Independent Lens

Why does this matter for independent voters?

  1. Extending the Trump tax cuts
    • Republicans argue that the TCJA fueled economic growth, but Democrats believe it exacerbated deficits and primarily benefited corporations and high earners.
    • If tax reform is delayed by prioritizing immigration enforcement, middle-class taxpayers and small businesses may face uncertainty about their financial planning.
  2. Border security and immigration enforcement
    • A proposed budget reconciliation bill on immigration would include increased border security funding and stricter enforcement policies.
    • However, using budget reconciliation for immigration policy is controversial, as previous attempts to include immigration reforms were struck down under the Byrd Rule.
  3. Growing concerns about deficits and debt
    • The U.S. is already running a $622 billion deficit in the first quarter of FY 2025.
    • The extension of TCJA, without offsetting spending cuts, could increase deficits further, leading to higher interest rates and economic instability.

Challenges facing budget reconciliation in Congress

  • Republicans hold a slim majority in the House (217 seats after pending resignations and confirmations).
  • Divisions within the GOP could make passing a budget resolution difficult.
  • The Senate parliamentarian may strike immigration provisions under the Byrd Rule.
  • Vote-a-rama in the Senate could introduce political challenges through last-minute amendments.

Final Thoughts

For independent voters, this debate highlights broader issues:

  • The trade-offs between tax relief and deficit reduction
  • The role of partisanship in economic policymaking
  • The effectiveness of Congress in addressing pressing national concerns

Congressional Republicans face a difficult balancing act between tax reform, border security, and fiscal responsibility. How they proceed could shape economic and immigration policy for years to come.

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