Reconciliation Primer: Democrats March Toward COVID-19 Relief Bill

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The Senate on Friday took the first step toward advancing filibuster-proof legislation that congressional Democrats hope to enact by mid-March that would include $1.9 trillion in COVID-19 relief and other policy priorities.

Democrats are using a procedural tool called reconciliation to advance their COVID-19 package. Here’s an overview of the process and Democrats’ plans.

Process

  • The Senate early Friday approved a fiscal year 2021 budget resolution 51-50, with Vice President Kamala Harris voting to break a tie. Democrats and Republicans each hold 50 seats in the Senate.
  • In an all-night voting session, the Senate adopted 22 amendments in a process known as a “vote-a-rama.”
  • The budget resolution doesn’t become law – it’s an internal congressional mandate and isn’t sent to the president for his signature. Instead, the budget resolution establishes topline spending numbers in the federal government’s annual budget.
  • But the real purpose of the budget resolution is that it also authorizes a separate budget reconciliation bill, which is unlike typical legislation. What makes a reconciliation bill special is that it cannot be filibustered in the Senate – that means it can pass with a simple majority vote, instead of the 60 votes required to overcome a filibuster.
  • This is critical for Democrats and their one-vote Senate majority thanks to Harris’ tie-breaking role. Because of the reconciliation process, Democrats can enact their policy priorities without negotiating or compromising with Republicans.
  • Republicans similarly used the reconciliation process for the 2017 tax reform law.

Timing

  • The Senate voted early Friday to approve the budget resolution, and the House later Friday is scheduled to give it final congressional approval.
  • Once the resolution is adopted, individual House and Senate committees will be directed to approve provisions within their legislative jurisdictions by Feb. 16.
  • House and Senate leaders will merge those components into one bill – the reconciliation bill. Each chamber needs to approve the same bill, which will then go to the White House for President Biden’s signature.
  • The House must vote first on the reconciliation bill because under the Constitution tax and spending bills must originate in the House.
  • Congressional Democrats hope to enact their reconciliation bill before mid-March, when enhanced federal unemployment benefits are scheduled to expire.

Provisions

  • Democrats principally want to use the reconciliation bill for COVID-19 relief and related provisions, such as a new round of stimulus checks; funding for vaccine distribution and administration as well as for scaling COVID-19 testing and tracing; funding for schools to reopen; and aid to state and local governments.
  • Because of the unique nature of reconciliation bills and Republicans’ inability to filibuster them, Democrats are expected to also try to include other policy priorities long favored by the party, such as increasing the minimum wage, expanding federal unemployment benefits, expanding the Child Tax Credit, and policies that would address evictions, homelessness and hunger.

Byrd rule

  • Not every policy can be included in a reconciliation bill. Under the Byrd rule (named after a former senator), provisions must directly relate to government spending, not be incidental to it. For example, changes in tax rates would be permitted, but establishing statehood for the District of Columbia likely would not.
  • The Senate parliamentarian is the arbiter of what’s allowed in a reconciliation bill. The parliamentarian’s rulings can only be overturned by 60 votes – giving Republicans some say in what policies ultimately would be included in a reconciliation bill.
  • Any changes the Senate makes to the reconciliation bill would require it to go back to the House for its approval – jeopardizing the likelihood of enactment before the Democrats’ self-imposed deadline of mid-March and potentially disrupting unemployment benefits.

Bottom line

  • The reconciliation process is complicated procedurally, and Democrats’ narrow House and Senate majorities leave party leaders virtually no room for error in trying to advance the legislation.
  • Reconciliation is still a powerful legislative tool that gives the majority party in Congress leverage to enact key policy priorities that may have otherwise been blocked by the minority party by a Senate filibuster.
  • Democrats are expected to offer two reconciliation bills in 2021. The first would focus mostly on COVID-19 relief, and a second toward the end of the year would principally focus on tax policy, including rolling back portions of the 2017 tax reform law.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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