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What is Budget Reconciliation? What is its relation to tax policy?

By: billkrusehkaglobal

In order for Congress to pass tax policy changes, the bill must get 60 votes in the Senate. The Senate is currently considered to be split between the parties. Passing major tax policy changes may be difficult without Reconciliation.

Reconciliation may only be enacted once during any fiscal year. If Reconciliation is used during the budget process, tax policy changes may be enacted by a 51 vote Senate majority to pass the budget. Reconciliation has been used by each of the last three Administrations to pass their key policy statements.

The Trump administration did not pass a budget for the current fiscal year. The Biden Administration’s American Rescue Act was passed as a part of a budget bill for the current fiscal year. This enabled the Administration to use Reconciliation to get the act passed.

The next major policy showdown anticipated in Congress is a potential overhaul of the current tax system. The Biden Administration could use Reconciliation to get their bill passed. With the Bernie Sander’s Corporate and Estate tax bills offered on the 24th, the Tax Policy Season is officially open!

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