What Is "Reconciliation" and How Does It Affect You?

The Obama Administration appears poised to use a method called "reconciliation" to pass a new health-care bill. 

If you're like the rest of America, which incidentally seems to include many news anchors, you might be asking, "what is reconciliation?"

First of all, they are talking about budget reconciliation.

Well... what is budget reconciliation?

The process is called budget reconciliation because it can only be applied to budgetary legislation. Congress uses this method when it wants to enact policy that relates to goals of the budget, primarily in spending or tax laws. 

One feature of budget reconciliation, and the reason we've been hearing so much about it, is that reconciliation is a way in which Congress can get a bill through the Senate with 51 votes (without needing to get to 60 in order to avoid filibuster).

In the past, budget reconciliation has been used by several administrations, Republican and Democrats alike. Many of the laws that affect you in your daily life are a result of budget reconciliation.

Take, for example, the Bush tax cuts. Those were a result of a Bush Administration era budget reconciliation. Let's also not forget COBRA -- the law that allows certain unemployed workers to continue their health care coverage for a certain period of time. COBRA was also passed through a budget reconciliation, from the Reagan Administration. 

So in a nutshell -- budget reconciliation is a method that is used to pass laws relating to issues that could affect your daily life, namely, money and taxation issues. It just requires a majority vote in the Senate, as opposed to 60 votes.

Related Resources:

• What is reconciliation? (Tax Policy Center)
• The Budget Reconciliation Process: Timing of Legislative Action  (Congressional Research Service)
• A Reconciliation Primer (Washington Post)