Understanding Reconciliation: GOP’s Shortcut for ‘Big Beautiful Bill’

Understanding Reconciliation in Washington

The term “reconciliation” in Washington, D.C., refers to a legislative shortcut that lets the party in power bypass opposition and implement far-reaching changes to taxes and spending with a bare majority vote. This process was utilized by Democrats to approve the Inflation Reduction Act in 2022, and by Republicans to enact significant tax cuts in 2017.

The Current Budget Debate

Currently, reconciliation is central to the budget argument, as Senate Republicans expedite their version of the “One Big Beautiful Bill Act, known by its acronym OBBBA, which passed the House in May 2025.

However, since 2001, the country’s fiscal outlook has worsened significantly, and the reconciliation process shifted from its initial purpose of promoting sound fiscal policy to passing partisan legislation without considering its economic consequence for future American generations.

How the Reconciliation Process Works

The reconciliation process was established by the Congressional Budget Act of 1974, to align policy goals with budget targets and curb deficits. Over its 50-year history, 23 reconciliation bills have become law.

Increasing Use of Reconciliation

Over time, reconciliation has become the preferred method for passing significant tax and spending legislation. Congress has increasingly used reconciliation to push through key economic legislation. Notwithstanding, reconciliation has substantial flaws, resulting in lack of transparency and the possibility of introducing earmarks, tax loopholes and other unrelated items.

Content of the One Big Beautiful Bill Act

The One Big Beautiful Bill Act, approved by the House, primarily includes an extension of President Trump’s tax cuts, which would otherwise expire at the end of 2025. However, the bill would drastically worsen the nation’s fiscal outlook, according to analyses by the nonpartisan Congressional Budget Office and other organizations.

The Costs of Reconciliation

In response to the reconciliation package, several Senate Republicans have questioned some aspects. Honest accounting would show that the Senate plan would add more to the debt than the House version.

Abuse of the Reconciliation Process

After the Senate passes its version, the House and Senate will need to reconcile their differences in a conference committee. Despite reconciliation remaining a powerful budgetary tool, its current use represents a fundamental inversion of its original purpose. Some estimates of the fiscal impact of the Senate’s version of the bill are as high as $3.8 trillion over a decade.