Budget Reconciliation Update

Republican leadership continues to try to build consensus to include language in the reconciliation package to raise the debt ceiling. If they can get there, the looming X-date turns up the pressure to move the process forward at a faster pace. Leadership has not resolved any of the foundational policy disputes that will determine the contours of the reconciliation package. Instead, the plan is to draft the resolution with different instructions for the House and the Senate. House instructions would incorporate the same top-line numbers and committee instructions for spending cuts and revenue increases as were included in the resolution already passed in that chamber. But Senate instructions would set a much lower floor for spending cuts ($3 billion vs. $1.5 trillion). This approach would punt politically difficult questions about how much and where to cut spending. It also would provide maximum flexibility for drafting and passing a budget resolution that can survive Byrd Rule challenges in the Senate – while the House can override budget resolution instructions with a simple majority vote, those instructions are effectively binding in the Senate because they require 60-votes to bypass. Republicans can spare just three votes to pass the resolution in the Senate. Sen. Paul (R-KY) has announced he will not vote for it because it includes a provision to increase the debt limit.