House and Senate Budget Committee Republicans Discuss Potential Second Reconciliation Package

By Kim Johnson, NLIHC Senior Director of Policy  

House Budget Committee Chair Jodey Arrington (R-TX) and Senate Budget Committee Chair Lindsey Graham (R-SC) met on March 25 to discuss a potential second reconciliation package. Reconciliation is a special legislative procedure that Congress uses to move legislation more quickly than the regular legislative process allows. Reconciliation bills are not subject to the Senate’s filibuster rule, so they only need a simple majority—51 “yes” votes—to pass the Senate instead of the 60 votes required in the regular process. As a result, when one party controls the House, Senate, and White House, Congress can use reconciliation to pass a bill without bipartisan input or support.  

In exchange for the lower vote threshold, reconciliation can only be used for proposals that impact mandatory spending programs (for example, Medicaid, Medicare, and the Supplemental Nutrition Assistance Program, SNAP), federal revenues (taxes), and/or the federal debt limit. These limits, commonly referred to as the “Byrd Rule,” mean Congress cannot use reconciliation to cut programs that receive funding through the annual appropriations process, like those under HUD, and that Congress cannot use reconciliation to change policies not directly related to spending, taxes, or the federal debt limit.     

Republicans used reconciliation to pass the “One Big Beautiful Bill Act” (H.R.1) into law last year, which made tax cuts from 2017’s “Tax Cuts and Jobs Act” permanent, and expanded the Low-Income Tax Credit (LIHTC) program. To help offset the cost of these policies, the bill also included several harmful provisions cutting funding for and limiting access to SNAP and Medicaid. An analysis from the non-partisan Congressional Budget Office (CBO) on the impacts of H.R.1 found that, after adjusting for inflation, over the next 10 years the top 10% of income earners will see an additional $12,000 in tax cuts per year, while the bottom 10% of income earners will see a drop in available income and benefits of $1,600 per year. 

For the second reconciliation package, Chairs Arrington and Graham are reportedly considering additional funding for programs under the Departments of Defense and Homeland Security; this spending increase would potentially be offset by additional cuts to safety programs, under the guise of cracking down on alleged “widespread fraud.” Chair Arrington mentioned specifically the Earned Income Tax Credit (EITC), a refundable tax credit for low- and moderate-income individuals and families in the workforce, and “low-income housing tax credits” as “another sort of welfare program within the tax code” allegedly rife with fraud.  

In addition, President Donald Trump is pressuring congressional Republicans to include the “Safeguard American Voter Eligibly (SAVE) Act,” a voter suppression bill that NLIHC strongly opposes, in the reconciliation package; however, because the “SAVE Act” does not have a direct impact on federal spending, taxes, or the debt limit, it is unlikely provisions from the bill would be able to be included in a reconciliation bill. Any provisions running afoul of the Byrd Rule must be removed from a reconciliation package or will be subject to the usual 60-vote threshold in the Senate. It is also not clear whether Republicans will be able to coalesce behind a second reconciliation bill; House Republicans carry a very narrow majority in the House, 218-214, and with three vacant seats, just one Republican defector would be enough to sink a reconciliation bill in the chamber.