Congress Passes Budget Resolution, Begins Reconciliation Process

Highlights

• The U.S. House of Representatives and Senate agree to a 2021 budget resolution, setting into motion the budget reconciliation process.
• Democrats will use the reconciliation process to attempt to pass a $1.9 trillion COVID-19 relief package.
• Congressional leadership has indicated they hope to approve a relief bill by early March.

The U.S. House of Representatives approved the Senate's 2021 budget resolution (S. Con. Res. 5) on Feb. 5, 2021, laying the groundwork for the budget reconciliation process. Created by the Congressional Budget Act of 1974, budget reconciliation is a mechanism by which Congress can use expedited procedures to consider spending, revenue and debt-limit laws as set by an annual budget resolution. Importantly, the process allows the Senate to enact legislation with a simple majority vote, though it also limits the scope to provisions that directly affect federal spending, revenues and debt.