BGOV OnPoint: Reconciliation May Be Key to Democrats’ Priorities

Bloomberg On Point

January 26, 2021 5:44 am

With slim majorities in Congress, Democrats could use budget reconciliation to pass another coronavirus stimulus measure and other priorities without Republican votes.

Reconciliation can be used to enact legislation using expedited procedures in the Senate, but it must be budgetary in nature under what’s known as the Byrd Rule. That can limit the types of policies that are included because they generally have to affect mandatory spending or revenue and can’t increase the deficit outside the covered budget period.

The Biden administration is discussing its $1.9 trillion stimulus plan with lawmakers but some are pushing back against the price tag, especially after December’s $900 billion package. Without bipartisan support, Democrats may have to drop some provisions to get a package through using reconciliation. That could include proposals to increase the minimum wage, though House Budget Chairman John Yarmuth (D-Ky.) said they may still try to include it.

Click here for the BGOV OnPoint: Budget Reconciliation

Democrats could also use reconciliation to pass other items on their agenda, such as health care, tax, climate, or infrastructure legislation.

The procedure has been used more than 20 times since the 1980s to pass major legislation, including a welfare overhaul , tax cuts, and the 2010 Affordable Care Act. Most recently, Republicans used it to pass a sweeping overhaul of the tax code in 2017 under President Donald Trump.

The attached presentation covers reconciliation procedures, how Democrats could use the process, and previous laws enacted through reconciliation — and some attempts that fell short.