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New guidance on reconciliation could be a game changer for Democrats

The filibuster is sort of the cool kid of arcane Senate procedure, alone as a pop culture icon. But its archrival, “budget reconciliation,” is sure making a run at the spotlight, especially after a new ruling Monday could significantly expand its use.

And that means a new opportunity to get around the filibuster. Here’s a look at what we know, and what it means.

What is reconciliation again?

Reconciliation is a process created in the Congressional Budget Act of 1974 to make it easier for the Senate to cut deficits. (Set aside that this is the opposite of what many reconciliation bills have done this century.) The idea is to “reconcile” specific budget goals with separate legislation to accomplish them. “Reconciliation instructions” spelling out those specific goals are put into the budget resolution.  

To make that more doable, the Budget Act removed the typical 60-vote hurdle in the Senate, allowing a reconciliation bill to pass with a simple 51-vote majority. 

Because it is tied to the once-a-year budget, reconciliation has historically been used no more than once a fiscal year. But now that could change.

What was the parliamentarian’s decision?

In all things Senate procedure, wording matters. And this wording is dense. But important.

NewsHour has been told by sources involved that Democrats asked Senate Parliamentarian Elizabeth McDonough: “Can you revise a budget resolution to include new reconciliation instructions as a part of that revision?”

Her answer was yes. It is not clear she provided any additional guidance, but that simple affirmative opened a new path around the Senate filibuster.

How? Let’s hammer apart the verbal concrete in that question. “Can you revise a budget resolution” means can you amend or change a budget that has already been passed? Then the second part, “to include new reconciliation instructions,” means can you add new language triggering/allowing for budget reconciliation? And finally “as part of that revision” means while the bill is being amended. 

Translation: Can you use an amendment to an already-passed budget as a way to launch budget reconciliation? The parliamentarian’s answer, again: yes.

Republicans and Democrats alike tell us they interpret the decision the same way: That this means the Senate can pass at least two reconciliation bills each year: One when the budget itself goes through each chamber and then another reconciliation bill later that same year by “revising” the budget.

What does that mean right now?

It changes the game on Capitol Hill, doubling the opportunities to get legislation through the Senate with just 51 votes. This is not to say it changes the entire political landscape, but it is a significant new tool for the party in charge in the U.S. Senate in times of gridlock.

For Democrats in the current Congress, this means they will have four slots for possible reconciliation bills before the midterms — two in the current fiscal year, 2021, and two more next year.

How will Democrats use reconciliation now?

Democrats have already used one of the four reconciliation slots now available to them, with the COVID-relief American Rescue Plan, which squeaked through the Senate on a 50-49 reconciliation vote in March.

That leaves three more: one this budget year, which ends Sept. 30, and two more in 2022. 

Current thinking is that the president’s infrastructure and climate plan, the American Jobs Plan, is most likely months from being ready for passage. It may use one of next year’s reconciliation slots, rather than use the newly opened space this year.

So what will Democrats use as their second reconciliation bill this year? They’re just beginning to consider their options, as well as whether they will pull this new reconciliation-by-revision trigger at all. But on the list for consideration is immigration, and specifically the DREAM Act.  

READ MORE: Democrats under pressure to act alone on immigration if Senate Republicans don’t sign on

Also under consideration for reconciliation, this year or next, health care changes, including expanding Medicare and adding more subsidies for lower- and middle-income Americans.

What we don’t know

There are more questions than answers on the way forward for Democrats. The parliamentarian’s decision is being read as meaning there are “at least” two opportunities for budget reconciliation, but is it just two, or could it be more? Is there a limit to how many times the Senate can use this new reconciliation-through-revision tool? Could there be an unlimited number of budget amendments like this each year and therefore an unlimited number of reconciliation bills? Or is it just one per year?

Also, it is not clear which bills would meet the other requirements of budget reconciliation.

What happens next?

Senators return from break next week, but there’s no rush for Democrats. They have a few weeks, potentially, to think about it.

Among their key considerations are which of their legislative priorities could qualify for reconciliation.  To pass through reconciliation, a bill must have a direct budgetary impact, meaning it must affect revenues or spending.  

Some major issues for Democrats, like gun control, do not easily fit into that box. In addition, every member of the Democratic caucus will need to agree on a bill in order for it to pass without Republican support. That’s not always something they can count on.

All of this leaves Majority Leader Chuck Schumer, D-N.Y., with a new muscle he can flex and a lot of decisions to make about when, if and how he will do it.