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Budget Reconciliation Is a Critical and Regularly Used Tool

Budget Reconciliation Is a Critical and Regularly Used Tool

While both parties have used budget reconciliation for major priorities, Republicans have used it more aggressively to force through tax cuts.

The sun rises behind the U.S. Capitol on January 17, 2021, in Washington, D.C. (Getty/Samuel Corum)
The sun rises behind the U.S. Capitol on January 17, 2021, in Washington, D.C. (Getty/Samuel Corum)

In calling for urgent action to combat the COVID-19 pandemic and address its economic fallout, President Joe Biden has proposed a $1.9 trillion rescue package. This week, House and Senate Democrats took the first steps to initiate the legislative process known as budget reconciliation to enact the rescue package into law.

Congressional Republicans have cried foul, claiming that reconciliation is an extreme measure that would “poison the well” between the parties in Congress and undermine “unity.” But in reality, reconciliation has been a critical tool that both parties have used to enact major priorities every time they have gained a trifecta—meaning control of the House of Representatives, Senate, and White House. The main reason reconciliation has grown in importance is that the Senate filibuster is now routinely used to block all legislation that cannot garner a supermajority of 60 votes—a trend driven mostly by Republicans. This column outlines three ways that both parties have used reconciliation in the past and how Republicans have stretched its rules to force through their main priority—tax cuts—and used it to advance other conservative priorities.

1.  Since 1980, both parties have used budget reconciliation to enact major priorities every time they held a trifecta

Since reconciliation was first used in 1980, Republicans have held a trifecta four times. Each time, they used reconciliation to enact tax cuts, and once, they used it to cut spending. Democrats have used reconciliation all three times they have held a trifecta since 1980—once, in 2010, to enable passage of health care reform and student loan reform, and twice to pass deficit-reducing budgets in 1993 and 1980. (see Table 1)

Table 1

Reconciliation is hardly extreme or uncommon. In total, including in times of divided government, Congress has passed 25 reconciliation bills—21 of which were signed into law—sometimes voting along party lines, as with the 2017 Tax Cuts and Jobs Act, and sometimes on a bipartisan basis, though that has become less common over the decades. Democrats would be departing from past norms if they did not use reconciliation to enact their top priorities. It is notable that Republicans have passed 12 of the 14 reconciliation bills—86 percent—to reach the president’s desk in the last 25 years.

2.  Republicans aggressively stretched the rules of reconciliation to pass deficit-increasing tax cuts

Prior to 2001, reconciliation was used only for legislation that reduced deficits.* Many budget experts assumed this was consistent with Congress’ intent in creating the fast-track reconciliation process in the Congressional Budget and Impoundment Control Act of 1974. That changed in 2001, when Republicans lobbied the Senate parliamentarian to allow them to enact multiple deficit-increasing tax cuts for the first time. In a Solomonic decision, the parliamentarian advised that reconciliation could be used for deficit-increasing tax cuts, but only for one such bill. Soon after, the parliamentarian crossed the Republican majority on another issue, and they fired him.

The parliamentarian’s advice on deficit-increasing legislation opened the door for Republicans to use reconciliation to enact the massive tax cuts signed by President George W. Bush in 2001 and more tax cuts in 2003 and 2006. These Bush tax cuts were estimated to cost a total of $1.7 trillion over their first 10 years, which would be roughly $2.5 trillion in today’s dollars. Then, in 2017, the next time they gained a trifecta, Republicans used the reconciliation process to enact more tax cuts, signed by President Donald Trump, which the Congressional Budget Office (CBO) estimated shortly after their passage would cost $1.9 trillion over 10 years. In sum, in today’s dollars, Republicans have used reconciliation to enact more than $4 trillion in tax cuts, not counting the cost of subsequent extensions of the Bush tax cuts. Notably, the Bush and Trump tax cuts disproportionately benefited the highest-income Americans.

3.  Republicans have used reconciliation to enact conservative social and anti-environmental policies

The Byrd rule, first adopted in 1985, constrains the content of reconciliation bills that can pass the Senate with a simple majority. For example, under the rule, provisions of bills that have no effect on the federal budget, or whose budgetary effects are “merely incidental” to their nonbudgetary effects, must be taken out of reconciliation bills unless 60 senators vote to keep them in. The “merely incidental” test is an inherently blurry and subjective standard, further complicated by the lack of definition as to what constitutes a “provision.”

In recent years, Republicans have included policies in reconciliation bills whose main intent was clearly social or environmental policy. For example, Republicans have used reconciliation bills to attempt to strip federal funding from Planned Parenthood and other organizations that provide abortions. They included such a provision in a reconciliation bill ultimately vetoed by President Barack Obama in 2015 and a similar provision in the Affordable Care Act repeal bill considered and nearly adopted by the Senate in 2017. The parliamentarian advised that an original version of that provision targeting Planned Parenthood violated the Byrd rule but apparently allowed a prohibition on federal funding for a wider set of organizations that provide abortions.

Later in 2017, Republicans enacted a provision that permitted oil drilling in the Arctic National Wildlife Refuge in their tax reconciliation bill, even though it was expected to have substantial environmental effects but projected by the CBO to have a relatively minuscule fiscal impact of only $1 billion over a decade. (In actuality, the sale of drilling rights has brought in only a tiny fraction of that.) Also included in the tax bill was a provision effectively eliminating the Affordable Care Act’s mandate to purchase health insurance, which President Trump boasted “repealed the core of the disastrous Obamacare.” In a hair-splitting exercise revealing the arbitrary nature of how the Byrd rule is interpreted, the parliamentarian advised Republicans that they could not repeal the mandate outright in a reconciliation bill but that they could set the penalty that enforced the mandate to zero—a distinction without a difference.

Past Republican-written reconciliation bills have also imposed restrictions on social programs, including eliminating the federal welfare program and turning it into a block grant with work requirements and numerous other eligibility restrictions; eliminating food stamps for people with drug convictions; and tightening work requirements and changing citizenship documentation requirements for Medicaid.

Another fast-track legislative tool: The Congressional Review Act

In addition to reconciliation, Republicans have used another special, fast-track legislative process that allows them to avoid the Senate filibuster to enact deregulatory policies: the Congressional Review Act (CRA). Since the CRA was enacted, Republican Congresses have used its fast-track procedures to overturn 17 regulations, including rules protecting worker safety, preventing pollution of rivers and streams, and protecting consumers of financial products. Democratic Congresses have not used the CRA to date.


The recent history of reconciliation illustrates that Republicans have used it aggressively to enact their biggest priority of tax cuts and other conservative policies. Given the urgency of addressing the COVID-19 pandemic and the economic crisis—and the virtually certain threat of an obstructionist filibuster—reconciliation is a vital and appropriate tool that Democrats should use. 

* In 1997, Congress passed two reconciliation bills in conjunction with each other that combined to reduce deficits, though one increased deficits.

Seth Hanlon is a senior fellow at the Center for American Progress Action Fund.

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Seth Hanlon

Former Acting Vice President, Economy