When the 119th Congress began on Jan. 3, 2025, the big question was whether House Speaker Mike Johnson (R-LA) would have the votes to keep his post with the Republican majority at 219-215 per Rep. Matt Gaetz’s (R-FL) departure. Johnson could only lose one Republican vote to hold the necessary 218 for reelection but he prevailed with President-elect Trump corralling wayward Republicans and Rep. Thomas Massie (R-KY) the lone holdout.
Johnson’s reelection as Speaker brings unified Republican control of government with Sen. John Thune (R-SD) as the new Senate Majority Leader and Donald Trump returning to the White House. This trifecta gives Republicans more options to fulfill their agenda including budget reconciliation for major domestic policy legislation.
Reconciliation is a special legislative process created as part of the Budget Act of 1974 to help Congress make tax and spending changes to meet levels proposed in the annual congressional budget resolution. Its privileged status makes it easier to pass in the Senate so instead of needing 60 votes, a reconciliation bill only needs a simple majority in the Senate.
The reconciliation process begins with Congress formulating an annual budget resolution that sets spending and revenue levels. A concurrent budget resolution in both chambers of Congress can include reconciliation instructions for committees. These instructions direct committees to recommend changes to existing laws to achieve changes in spending, revenues, deficits and/or the debt limit, and committees can comply with their targets by making changes to any programs under their jurisdiction.
But there are limits as to what can be put in a reconciliation bill because of the Byrd rule, which is named after the late Sen. Robert Byrd (D-WV) and designed to stop provisions unrelated to spending or taxes. Specifically, the Byrd rule prohibits the inclusion of “extraneous” measures in reconciliation with the primary definition of such measures being those with no budgetary effect (i.e., no change in outlays or revenues).
Any Senator can raise a point of order against what he or she believes to be an extraneous provision in a reconciliation bill and the Senate Parliamentarian decides whether there is a Byrd rule violation. Provisions struck through a Byrd rule point of order cannot be offered later as amendments, however, a Byrd rule point of order can be waived by a vote of 60 Senators.
Some Republicans floated the idea of two reconciliation bills, with the first covering the border, defense and energy, and the second on Tax Cuts and Jobs Act provisions that expire at the end of 2025. But any GOP policy debate over this strategy quickly came to an end when President-elect Trump stated his preference in early January for “one powerful Bill” that does all these things.
Trump stated his desire to have such a reconciliation bill on his desk by May, but that would seem unrealistic given its scope and likely debates over tax code and other provisions. Trump also says he wants tariffs to pay for reconciliation items such as his “no tax on tips” proposal, but many Senate Republicans are lukewarm to the idea. It’s also been reported that Trump’s aides have scaled back his plan for “universal” tariffs of 10% to 20% on everything imported into the U.S. to imposing them only on certain sectors deemed critical to national or economic security.
