11.1 Budget resolution and reconciliation

The budget resolution and reconciliation process are crucial tools Congress uses to shape federal spending and revenue. These mechanisms allow lawmakers to set fiscal priorities, enforce budgetary targets, and fast-track certain legislation, bypassing potential roadblocks like Senate filibusters.

While the budget resolution provides a framework for fiscal decision-making, it's not legally binding. The reconciliation process, however, can lead to significant policy changes. Understanding these processes is key to grasping how Congress wields its power of the purse.

Budget Resolution's Role

Setting Spending and Revenue Targets

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• The budget resolution is a concurrent resolution passed by both the House and Senate that sets overall spending and revenue targets for the next fiscal year and at least four out years
  • Does not require the President's signature
  • Establishes a framework within which Congress will consider subsequent budgetary legislation
  • Not a law but rather an agreement between the House and Senate

Enforcing Targets and Allocations

• The spending and revenue targets in the budget resolution are enforced through points of order and other procedural mechanisms
• The budget resolution typically includes:
  • Budget aggregates (total spending, revenue, deficit/surplus, and debt levels)
  • Spending allocations to each committee (302(a) allocations)
  • May include reconciliation instructions
• The budget resolution can also include reserve funds which provide committees with flexibility to adjust spending and revenue levels for specific legislation

Reconciliation Process

Fast-Tracking Budgetary Legislation

• Reconciliation is an optional process that allows Congress to fast-track certain budgetary legislation
  • Typically used to bring existing spending, revenue, and debt limit laws into compliance with current fiscal priorities established in the budget resolution
• Reconciliation instructions are included in the budget resolution, directing specified committees to report legislation that changes spending, revenues, deficits, or the debt limit by specific amounts over a certain time period

Special Rules and Procedures

• The reconciliation process is governed by special rules and procedures:
  • Debate in the Senate on reconciliation bills is limited to 20 hours
  • Amendments must be germane and not include extraneous matter
  • The Senate can pass reconciliation bills with a simple majority vote, circumventing the usual 60-vote threshold to end debate
  • The "Byrd Rule" allows Senators to block provisions in reconciliation bills that are considered "extraneous" (i.e., non-budgetary in nature)
• Reconciliation has been used to enact major policy changes (welfare reform, tax cuts, health care reform) as it is not subject to Senate filibuster

House vs Senate Budgets

Committee Jurisdiction and Procedures

• The House and Senate Budget Committees have primary jurisdiction over the budget resolution and reconciliation process, but they differ in their specific rules and practices
• In the House:
  • The Budget Committee typically holds hearings and drafts the budget resolution
  • The budget resolution is then considered and amended by the full House
  • The House Rules Committee plays a significant role in determining the rules for floor consideration of the budget resolution
• In the Senate:
  • The Budget Committee also holds hearings and drafts the budget resolution
  • Any Senator may offer amendments during the "vote-a-rama" (a series of rapid-fire votes) before the final passage of the resolution

Unique Rules and Practices

• The House typically adopts a separate order of business to consider appropriations bills after the budget resolution is agreed to, while the Senate does not have a comparable formal structure
• The Senate has a unique rule (the "Conrad Rule") that prohibits the consideration of appropriations bills until the budget resolution has been adopted
  • The House does not have such a rule

Budget Resolution Effectiveness

Potential for Fiscal Discipline

• The budget resolution is intended to provide a comprehensive framework for Congress to set fiscal priorities and make budgetary decisions
  • When there is political consensus and will to adhere to the budget resolution, it can be an effective tool for enforcing fiscal discipline and guiding spending and revenue decisions
• However, the budget resolution is not legally binding and can be waived or ignored by Congress, particularly in times of divided government or competing priorities

Limitations and Criticisms

• The budget resolution's impact on actual spending and revenue levels can be limited
  • It does not directly allocate funds or change tax laws
  • Subsequent appropriations bills and reconciliation legislation are necessary to implement the policies assumed in the budget resolution
• Critics argue that the budget resolution process has become increasingly partisan and less effective in addressing long-term fiscal challenges (rising debt, entitlement spending)
• Some argue that the budget resolution should be reformed to:
  • Better account for long-term fiscal trends
  • Incorporate more realistic economic assumptions
  • Promote bipartisan cooperation on budgetary issues