What is Reconciliation?

Perhaps you recall hearing the term “reconciliation” earlier this year when Congress was fired up to repeal the ACA. Well, reconciliation is making a comeback as GOP leadership attempts to pass the 2018 federal budget and then ram through a partisan tax code overhaul.

Together, these measures would benefit the wealthy and profitable corporations, while cutting trillions of dollars in investments made in the states through a broad range of basic public services, assistance for low- and moderate-income Americans, and health care.

While both the House and Senate budget resolutions include deep cuts to SNAP, Medicare and Medicaid, the budget is a non-binding resolution and still requires appropriation bills and other measures to put in place these cuts. However, the budget resolution does set up the mechanism for reconciliation as a way for Congress to “fast track” legislation.

Created by the Congressional Budget Act of 1974, reconciliation allows for faster-than-usual consideration of certain tax, spending, and debt limit legislation. In the Senate, reconciliation bills can’t be held up by filibuster and the scope of amendments is limited under a 20 hour cap, which gives this process serious advantages for enacting controversial budget and tax measures. The Senate can pass a reconciliation bill with just 51 votes.

This reconciliation process permits Congress to enact the federal budget resolution’s program cuts with only a simple majority in the Senate — i.e., without any Democratic votes — and is the same process that GOP leaders had been using to repeal the ACA.

US Capitol Building in Washington, D.C., the seat of the United States Congress.

US Capitol Building in Washington, D.C., the seat of the United States Congress.

The House budget passed on October 5th calls for congressional committees to produce at least $203 billion in savings over ten years through cuts to Medicaid, Medicare, and other entitlement funds to be enacted in the months ahead.  The Senate budget is expected to pass later this week and would add $1.5 trillion to the deficit.

Although the two resolutions have some important differences, they have the same basic architecture: They both establish the reconciliation process with the aim at making massive tax cuts that will primarily benefit the wealthiest and corporations, while paying for them through massive cuts to public services for the vast majority of Americans. Read our initial analysis of the Trump tax plan’s impact on Montana’s working families.

After the Senate vote later this week, House and Senate Republican leaders will create a conference committee to resolve the differences between their two resolutions and agree on one budget resolution that can be used to create the filibuster-proof reconciliation process for the tax package.

When the House and Senate go to conference committee, the final conference agreement will likely include reconciliation instructions that would require Congress to take immediate steps to cut SNAP, Medicaid, and other programs that support moderate- and low-income Montanans.

We’ll continue to track the federal budget development and the next steps for tax legislation in Congress.

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