Explainer: Budget Reconciliation and Immigration Reform

Democrats are moving forward on the outline of a $3.5 trillion budget package that would allow them to pass significant priorities from President Biden’s domestic agenda with their narrow majorities using the budget reconciliation process. Under reconciliation, Democrats and the Biden administration can seek to avoid a Senate filibuster and pass legislation with a simple majority, provided the legislation had a non-incidental impact on federal spending and revenues.

Following a federal court ruling that the Deferred Action for Childhood Arrivals (DACA) policy is unlawful, Congress is facing growing urgency around finding a permanent solution for Dreamers, and – more generally – making overdue and needed reforms to the immigration system. Accordingly, Democrats are expected to include provisions providing for significant immigration reforms in their reconciliation package, including granting a pathway to citizenship for Dreamers, Temporary Protected Status (TPS) holders, farmworkers, and other essential workers. The plan will also likely include funding for border security, including $10 billion for infrastructure at ports of entry.

However, before enacting immigration reforms via reconciliation, Democrats must meet the stringent procedural requirements of the process.

The inclusion of immigration in reconciliation will almost certainly be challenged and it remains uncertain whether the provisions are sufficiently related to spending or revenues to be allowed into a final package.

1. What Is the Reconciliation Process?

The reconciliation process was created by the Congressional Budget Act of 1974 to bring order to federal budgeting and encourage budgetary savings. A two-step process providing for expedited consideration of certain legislation related to taxes, spending, and the federal debt limit, the process consists of a budget resolution that recommends targeted spending and revenue levels and an omnibus spending bill that adopts policy changes consistent with the budget resolution.

2. What Are the Rules of the Reconciliation Process?

The following rules apply to the reconciliation process:

  • Limited debate. The reconciliation process provides for a statutory time limit of 20 hours of debate. This means that Senate rules providing for unlimited debate do not apply – and that reconciliation bills cannot be filibustered.
  • Simple majorities for passage. Because the Senate filibuster does not apply, both the budget resolution and the reconciliation bill can pass with simple majorities – 50 votes plus a tiebreaking vote by the Vice President.
  • Amendment rules. An unlimited number of amendments can be introduced at end of the 20 hours of debate, often leading to the unusual “vote-a-rama” process, a lengthy series of rapid-fire votes on amendments. However, amendments must be germane and deficit-neutral, which constrains the types of amendments that can be voted on.

3. How Has Reconciliation Been Used in the Past?

Because the reconciliation process is not subject to Senate filibuster rules, and requires only a simple majority in the Senate, it has increasingly been used by both parties to enact major policy changes.

Since the reconciliation process was created in 1974, Democrats and Republicans alike have used it to pass key priorities, including deficit reduction packages under Presidents Reagan and Clinton, major tax cuts under Presidents George W. Bush and Donald Trump, health insurance reforms under Presidents Reagan and Obama, and COVID-19 relief under President Biden. Reconciliation bills often had bipartisan support in the 1980s and early 1990s – times of divided government. However, by the mid-1990s and 2000s, Democratic and Republican majorities began using the process to pass partisan bills with fewer than 60 Senate votes.

4. What Are the Limits on the Use of Reconciliation?

While noteworthy policy changes have been enacted via reconciliation, Senate rules restrict its use. To prevent reconciliation from being abused for non-budgetary measures, the Senate adopted the “Byrd Rule” in the 1980s. Named for then-Senator Robert Byrd (D-West Virginia), the rule excludes “extraneous” matters that are not primarily budget related.

Under the Byrd Rule, a provision with any of the following six characteristics is considered to be improper and constitutes an extraneous provision:

  • No impact on budget: The provision does not change outlays or revenues.
  • Violates committee instructions: The provision produces an increase in outlays or decrease in revenues in violation of the budget resolution’s instructions to the relevant congressional committee.
  • Violates jurisdiction: The provision is outside the jurisdiction of the committee that submitted it.
  • Incidental to non-budgetary components: The provision’s impact on outlays or revenues is incidental to its non-budgetary components.
  • Increases deficit: The provision would increase the deficit after the window covered by the reconciliation measure.
  • Social Security changes: Section 310(g) of the Budget Act prohibits reconciliation bills from making changes to Social Security.

To challenge a provision as “extraneous,” a Senator may raise a parliamentary objection – known as a “point-of-order.” The Senate’s parliamentarian, a staff member with extensive knowledge of the Senate’s rules and precedents, considers the six factors constituting the Byrd Rule when ruling on the point of order. If the parliamentarian rules that the provision is extraneous, it is dropped from the bill, unless 60 Senators vote to waive the application of the Byrd Rule to that provision. Motions to waive the Byrd Rule occasionally were approved in the 1980s and 1990s, but none since 1999.

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