Republicans will have control of both chambers of Congress plus the White House come January. And they’re getting ready to pass a whole bunch of policy priorities into law while they can.
But the majorities in the House and Senate are slim — and certainly not veto-proof in the Senate. That means the GOP will have to rely on some special maneuvers to get their priorities passed.
A big part of that will be something called the budget reconciliation process. Kimberly Adams, Marketplace’s senior Washington correspondent, recently spoke with “Marketplace Morning Report” host David Brancaccio to explain what that is. The following is an edited transcript of their conversation.
David Brancaccio: Look, I think a civics lesson is in order. What is the budget reconciliation process? Remind me.
Kimberly Adams: So this is a way to move legislation through Congress that avoids the need for that filibuster-proof 60 votes in the Senate. And instead, you can pass things with a simple majority, but it requires coordination between both chambers of Congress, and there are some restrictions on how legislators can use this tool. Samantha Jacoby at the Center on Budget and Policy Priorities said it only works on certain kinds of bills.
Samantha Jacoby: Generally, that means legislation that affects the budget — so spending or revenues. But to start the reconciliation process, both the House and the Senate have to pass a budget resolution, and, as part of that, they basically set a number, and that number is a dollar amount by which the legislation cannot increase the deficit.
Adams: Both Democrats and Republicans like to use this tool when they have narrow majorities. It’s how the GOP passed the 2017 tax cuts and Jobs Act, and how Democrats passed the inflation Reduction Act in 2022.
Brancaccio: “When the parties have narrow majority” — so I assume the budget reconciliation process will take on new relevance, right?
Adams: Right. So this time, as you said earlier, Republicans do have a narrow majority, so they’re already talking about using this tool to extend those 2017 tax cuts. They’re also talking about using it to pass legislation on border security, as well as potentially repeal some energy programs or even potentially have some spending cuts for entitlement programs.
Brancaccio: Now, when they use this reconciliation, how does it shape the way the legislation turns out?
Adams: So, like Samantha Jacoby mentioned earlier, they have to keep to those deficit limits. So it causes a lot of funny accounting, to be honest. So take, for example, those 2017 tax cuts. Garrett Watson at the Tax Foundation explained to me how in order to make the cost of the bill fit within the terms of the budget resolution, at least on paper —
Garrett Watson: Policymakers in both House and the Senate have to think about ways to prevent a net deficit increase past year 10, and to do that, they made the individual tax cuts temporary.
Adams: While making those corporate tax cuts permanent, and that’s why we’re actually getting ready for another round of tax negotiations this coming year.
