	Introduction

		Overview of the Budget Reconciliation Process

The Congressional Budget Act of 1974 established the congressional budget process. The budget reconciliation process is an optional procedure that operates as an adjunct to thebudget resolution process. The chief purpose of the reconciliation process is to enhance Congress'sability to change current law in order to bring revenue, spending, and debt-limit levels intoconformity with the policies of the budget resolution. Reconciliation is a two-stage process. First, reconciliation instructions are included in thebudget resolution, directing the appropriate committees to develop legislation achieving the desiredbudgetary outcomes. If the budget resolution instructs more than one committee in a chamber, thenthe instructed committees submit their legislative recommendations to their respective BudgetCommittees by the deadline prescribed in the budget resolution; the Budget Committees incorporatethem into an omnibus budget reconciliation bill without making any substantive revisions. (5) 
The second step involves consideration of the resultant reconciliation legislation by theHouse and Senate under expedited procedures. Among other things, debate in the Senate on anyreconciliation measure is limited to 20 hours (and 10 hours on a conference report) and amendmentsmust be germane and not include extraneous matter. The House Rules Committee typicallyrecommends a special rule for the consideration of a reconciliation measure in the House that placesrestrictions on debate time and the offering of amendments. In cases where only one committee has been instructed, the process allows that committeeto report its reconciliation legislation directly to its parent chamber, thus bypassing the BudgetCommittee. As an optional procedure, reconciliation has not been used in every year that thecongressional budget process has been in effect. Beginning with the first use of reconciliation byboth the House and Senate in 1980, however, reconciliation has been used in most years. (In threeyears, 1998 (for FY1999), 2002 (for FY2003), and 2004 (for FY2005), the House and Senate did notagree on a budget resolution.) Congress has sent the President 19 reconciliation acts over the years;16 were signed into law and three were vetoed (and the vetoes not overriden). Section 310 of the Congressional Budget Act of 1974

Section 310(a) of the 1974 act provides for the inclusion of reconciliation directives in abudget resolution. Initiating Consideration and ControllingTime. Accordingly, these factorseffectively guarantee that the House and Senate bills will be different.
The budget reconciliation process is an optional procedure that operates as an adjunct to thebudget resolution process established by the Congressional Budget Act of 1974. The chief purposeof the reconciliation process is to enhance Congress's ability to change current law in order to bringrevenue, spending, and debt-limit levels into conformity with the policies of the annual budgetresolution.
Reconciliation is a two-stage process. First, reconciliation directives are included in thebudget resolution, instructing the appropriate committees to develop legislation achieving the desiredbudgetary outcomes. If the budget resolution instructs more than one committee in a chamber, thenthe instructed committees submit their legislative recommendations to their respective BudgetCommittees by the deadline prescribed in the budget resolution; the Budget Committees incorporatethem into an omnibus budget reconciliation bill without making any substantive revisions. In caseswhere only one committee has been instructed, the process allows that committee to report itsreconciliation legislation directly to its parent chamber, thus bypassing the Budget Committee.
The second step involves consideration of the resultant reconciliation legislation by theHouse and Senate under expedited procedures. Among other things, debate in the Senate on anyreconciliation measure is limited to 20 hours (and 10 hours on a conference report) and amendmentsmust be germane and not include extraneous matter. The House Rules Committee typicallyrecommends a special rule for the consideration of a reconciliation measure in the House that placesrestrictions on debate time and the offering of amendments.
As an optional procedure, reconciliation has not been used in every year that thecongressional budget process has been in effect. Beginning with the first use of reconciliation byboth the House and Senate in 1980, however, reconciliation has been used in most years. In threeyears, 1998 (for FY1999), 2002 (for FY2003), and 2004 (for FY2005), the House and Senate did notagree on a budget resolution. Congress has sent the President 19 reconciliation acts over the years;16 were signed into law and three were vetoed (and the vetoes not overriden).
Following an introduction that provides an overview of the reconciliation process anddiscusses its historical development, the report explains the process in sections dealing with theunderlying authorities, reconciliation directives in budget resolutions, initial consideration ofreconciliation measures in the House and Senate, resolving House-Senate differences onreconciliation measures, and presidential approval or disapproval of such measures. The text of tworelevant sections of the Congressional Budget Act of 1974 (Sections 310 and 313) is set forth in theappendices, along with a list of other Congressional Research Service products pertaining toreconciliation procedures.
This report will be updated as developments warrant.