The GOP is poised to leverage the budget reconciliation mechanism to advance President-elect Donald Trump’s legislative agenda in the upcoming Congress. This powerful tool allows certain types of legislation to bypass the 60-vote filibuster threshold in the Senate, requiring only a simple majority for passage. Established by the 1974 Congressional Budget Act, reconciliation can be used for measures related to taxation, spending, and debt.
While multiple reconciliation bills can be passed separately within a fiscal year, each bill must address only one of the three issues. However, most reconciliation bills encompass more than one issue, limiting Congress to a single reconciliation bill per fiscal year.
Under the Byrd Rule, reconciliation bills must not increase the deficit beyond a decade or make changes to Social Security. Measures must originate from committees with jurisdiction over the subject matter. Additionally, reconciliation cannot be used for measures where the spending or taxing effects are minimal.
The reconciliation process was previously used by Democrats to pass the American Rescue Plan in 2021, providing stimulus checks and increasing the child tax credit in response to the COVID-19 pandemic.
With the GOP set to control the House, Senate, and White House, passing and enacting reconciliation bills is expected to be more straightforward. House Speaker Mike Johnson has hinted at plans to expand the 2017 tax cuts and potentially repeal parts of the Inflation Reduction Act using reconciliation. Please rewrite the following sentence: “The company’s profits have increased by 20% this quarter.”
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