April 19, 2021
For more on this topic, see Austin Smythe’s earlier post: The Biden Agenda and Reconciliation 2.0.
As we noted in our March report, congressional Democrats may again look to the budget reconciliation process, used to enact the American Rescue Plan Act (ARPA), to avoid a potential Senate filibuster and to pass other priorities, including President Biden’s American Jobs Plan.
In March, it appeared that Senate Democrats were limited to two budget reconciliation bills: one flowing from the FY21 budget resolution and a second based on the FY22 budget resolution. That changed recently when the Senate Parliamentarian advised Senate Majority Leader Schumer (D-NY) that amending the FY21 budget resolution could generate an additional reconciliation bill. That ruling gives Schumer more options to pass budget-related Democratic priorities, but the guidance leaves a lot of unanswered questions about the adoption and permitted scope of a revised budget resolution and a subsequent reconciliation bill.
As background, the Senate Parliamentarian advised in 2001 that a budget resolution could only generate one reconciliation bill that affected both spending and revenues. Democrats expended that option to enact the ARPA through the FY21 budget resolution and the reconciliation bill it generated. The Budget Act provides for a revision of the budget resolution. The current Parliamentarian used that as the basis for allowing a revised budget resolution to generate an additional reconciliation bill. While this guidance may give Democrats the option of moving a second reconciliation spending and revenue bill, Senate Democrats still face some practical hurdles to get it enacted:
Work on a new reconciliation bill could last well into the summer. First, the Senate will need to adopt a revised FY21 budget resolution with reconciliation instructions before taking up a second reconciliation bill. Both measures will be subject to a “vote-a-rama,” a long and grueling series of votes on Republican amendments. Avoiding a conference process on either measure requires the House to adopt the Senate measure without amendment. Time devoted to a revised FY21 budget resolution reduces the time available for considering an FY22 budget resolution.
The Senate risks losing the reconciliation bill’s expedited procedures if it fails to pass it by September 30, the end of FY21.
As we saw with the ruling on the minimum wage provisions in the House-passed ARPA bill, non-budgetary provisions can be removed with this Senate rule. A waiver to overturn that ruling requires 60 votes.
ARPA included funding for appropriated programs, but the Appropriations Committee is not allowed to be part of the reconciliation process. ARPA was primarily focused on one-time funding to deal with a pandemic. Using reconciliation to fund infrastructure and other appropriated programs could complicate the annual appropriations bills (a more detailed discussion of this point follows).
Although Senate Democrats may be able to generate additional reconciliation bills by revising budget resolutions, that doesn’t change the fact that they have zero votes to spare in the Senate and only two in the House. Democrats will be challenged to reach consensus on any significant legislative initiative, with their progressive and moderate wings battling for influence.
While these hurdles are considerable, none are fatal. Congressional Democrats successfully used the reconciliation process to put ARPA on the President’s desk by March 11.
Editor’s note: this post is an excerpt from an article that appeared in the April Federal Budget IQ monthly report.