Order Code 98-814 GOV
Updated March 5, 2001
CRS Report for Congress
Received through the CRS Web
Budget Reconciliation Legislation:
Development and Consideration
Bill Heniff Jr.
Consultant in American National Government
Government and Finance Division
Budget reconciliation is an optional two-step process Congress may use to assure
compliance with the direct spending, revenue, and debt-limit levels set forth in budget
resolutions.1 First, Congress includes reconciliation instructions in a budget resolution
directing one or more committees to recommend changes in statute to achieve the levels
of direct spending, revenues, and debt limit agreed to in the budget resolution. Second,
the legislative language recommended by committees is packaged “without any substantive
revision” into one or more reconciliation bills, as set forth in the budget resolution, by the
House and Senate Budget Committees. In some instances, a committee may be required
to report its legislative recommendations directly to its house.
Development of Reconciliation Legislation
The reconciliation process begins with the inclusion in a budget resolution of
instructions to committees to change spending and revenue laws. The instructions
typically indicate the committee(s) directed to recommend changes and a date by which
the committee(s) must submit its recommended legislation to its respective Budget
Committee. The House directives usually specify recommended levels of direct spending
and revenue by committee, while the Senate directives usually specify the amount of
change. Reconciliation directives may also specify the amount by which the statutory limit
on the public debt is to be changed and instruct the House Ways and Means Committee
and the Senate Finance Committee to recommend such a change.
The dollar amounts in reconciliation directives are based on assumptions about
existing policies and the savings that would result. In some instances, the assumed savings
that would result from the specific changes in existing laws are printed in the committee
or conference report accompanying a budget resolution. Committees are not, however,
bound by these assumptions or suggestions. While a committee is bound by the dollar
amounts, there is no point of order against language that does not comply with the
reconciliation directives. Any lack of compliance may be addressed during floor action,
usually by an amendment offered to achieve greater compliance.
1 The process is provided by section 310 of the Congressional Budget Act of 1974 (CBA), P.L.
93-344, titles I-IX, as amended.
Congressional Research Service ˜ The Library of Congress

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If only one committee is required to recommend legislative changes, the committee
reports its recommended legislation directly to its house. If more than one committee is
directed to report legislative changes, which is often the case, those recommendations are
submitted to the Budget Committees. The House and Senate Budget Committees are
responsible for assembling the committee recommendations into one or more omnibus
bills. The CBA does not allow the Budget Committees to make any substantive changes
to these recommendations, even when they do not comply with the reconciliation
instructions.
Consideration of Reconciliation Legislation
Once the Budget Committees report reconciliation legislation to their respective
houses, consideration is governed by special procedures. These special rules serve to limit
what may be included in reconciliation legislation, to prohibit certain amendments, and to
encourage its completion in a timely fashion.
Section 310(g) of the CBA prohibits the House or Senate from considering any
reconciliation legislation, or any amendment to a reconciliation bill, recommending changes
to the Social Security program. In the Senate, section 313, commonly referred to as the
Byrd rule, prohibits extraneous matter in a budget reconciliation bill. Under the Byrd rule,
extraneous matters generally include those that have no direct budgetary effect, that
increase spending or decrease revenue when a committee is not in compliance with its
reconciliation instructions, or that violate another committee’s jurisdiction.
Section 310(d) of the CBA bars the House or Senate from considering any
amendment to a reconciliation bill that would increase the deficit. For example, an
amendment that increases spending above the level set forth in the bill must be offset by
an equivalent amount of spending reductions, revenue increases, or a combination of both.
However, section 310(d)(2) provides that in the Senate an amendment to strike out a
provision in the bill is always in order. Also, the Congressional Budget Act prohibits
nongermane amendments to a reconciliation bill.
During floor action on reconciliation legislation, the Senate and House follow
different procedures and practices. In the Senate, debate on a budget reconciliation bill,
and on all amendments, debatable motions, and appeals, is limited to not more than 20
hours. After the 20 hours of debate has been reached, consideration of amendments,
motions, and appeals may continue, but without debate. The Senate often will consider
a substantial number of amendments. The CBA does not provide any debate limitations
on a reconciliation bill in the House. The House, however, regularly adopts a “special
rule” establishing the time allotted for debate and what amendments will be in order. The
House special rule typically has allowed for consideration of only a few major
amendments.
The congressional budget process timetable outlined in section 300 of the CBA, as
amended, sets June 15 as the deadline for Congress to complete action on any required
reconciliation legislation. However, Congress frequently does not meet this deadline.
Final action on reconciliation legislation usually depends on whether or not there is
substantial agreement between Congress and the President on the substantive provisions.

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