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Budget Reconciliation use in Recent Years
Tuesday, January 12, 2021

The looming 50-50 Senate, in which ties will be broken by Vice President-elect Kamala Harris, has triggered much interest in the budget reconciliation process. Budget reconciliation has many complexities, but at its core it offers a tool for enacting legislation that would otherwise be unable to clear the Senate because of the 60-vote threshold needed to bring legislation to the floor. Some policy issues, such as taxes and changes to Medicare or Medicaid, fit squarely within the rules of reconciliation while others may be more suspect and vulnerable to parliamentary objections.

In recent years, reconciliation has been the pathway used to enact or pursue highly partisan legislation, such as part of the package used to enact the Patient Protection and Affordable Care Act (ACA) during the early years of the Obama administration as well as the failed effort to repeal the ACA during the first year of the Trump administration. With a Democratic Senate looming, albeit by the narrowest of margins, reconciliation may breathe wind into the more ambitious legislative proposals of the incoming Biden-Harris administration that would have likely been tabled with a Republican-controlled Senate.

While major questions about if, when and how reconciliation may be used remain to be answered, the tool has commonly been used, particularly during the initial two years of new administrations. This piece reviews how recent administrations and Congresses have used the budget reconciliation tool and what resulted from those efforts.

The Trump Administration

The Trump administration and the Republican-controlled 115th Congress sought to use reconciliation early in the president’s tenure to make good on his campaign pledge to repeal and replace the ACA. Ultimately, Congress was unsuccessful in advancing repeal legislation with the late Republican Sen. John McCain of Arizona casting a decisive early morning “no” vote.

While Trump and the Congress were unable to use reconciliation to repeal the ACA, they were successful in using the tool to enact a tax reform bill, the Tax Cut and Jobs Act, that included, among other provisions, the repeal of the ACA’s individual mandate and reductions to tax rates.

The Obama Administration

In March of 2010, Congress used reconciliation to enact a companion bill to the ACA. Reconciliation ended up being needed after the Democrats lost their 60-vote Senate majority in January 2010 when Republican Scott Brown shocked many by winning the special election to fill the Massachusetts Senate seat once held by Democratic Sen. Ted Kennedy.

While the Senate had passed the ACA in December, House Democrats wanted changes to the bill. With the Senate unable to enact a revised health reform bill under regular order, reconciliation was used to enact a companion bill to the core reform bill. After Republicans retook the Senate in 2015 following the November 2014 elections, they attempted to use reconciliation to repeal many pieces of the ACA. However, that bill was ultimately vetoed by President Obama.

The George W. Bush Administration

Reconciliation was used 20 years ago, the last time when the Senate was divided 50-50, to enact the first of President George W. Bush’s tax cut laws, helping the new president achieve a campaign priority. Notably, as the law was being debated, the late Sen. Jim Jeffords of Vermont switched from Republican to Democrat, flipping control of the Senate with his move.

After Republicans took over the Senate following the November 2002 elections, reconciliation was used in 2003 to expand and accelerate policies of the Bush tax plan that could not be achieved two years earlier. It was also used at other times during the Bush administration, including to enact an additional tax law and the Deficit Reduction Act.

The Clinton Administration

Congress used reconciliation in 1993 to enact President Clinton’s tax law, which included increases in certain taxes. The law was leveraged by Republicans to rally against the president and to win back control of the Senate and the House in the 1994 elections, breaking 40 years of Democratic House control.

In 1996, reconciliation would be used to enact a landmark welfare reform law negotiated by Clinton and the Republican-controlled Congress. And one year later, it was used to enact the Balanced Budget Act that, among other things, established the Medicare Sustainable Growth Rate (SGR) that was ultimately repealed in 2015.


If, when and for what purposes budget reconciliation may be used by the new 117th Congress and the incoming Biden administration remains to be determined. But a look at presidential history over the past 25-plus years shows a pattern of using the tool to advance the new administration’s signature proposals.

Use of reconciliation is not without risk. It can be argued that the push to repeal the ACA by President Trump and the Republican-controlled Congress, the enactment of the ACA by President Obama and the Democratic-controlled Congress, and the Clinton tax law all contributed to loss of chamber control during the subsequent mid-term elections. The incoming administration and congressional leaders will surely be weighing those political risks against the possible gain of fulfilling campaign promises.

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