By Mark Valentini, Vice President of Legislative Affairs
House Republicans under Speaker Mike Johnson (R-LA) have been in talks over the summer to draft another reconciliation bill.
WHY IT’S IMPORTANT: Reconciliation in Congress is a means for the majority party to aggregate its budgetary priorities into a legislative vehicle. This is important because the Senate requires 60 votes (known as “cloture”) to debate on any legislation; cloture is not required if the legislation is a reconciliation package. The only caveat is that reconciliation must be tied to federal budgetary items and must exclude any provisions that do not meet that criteria.
RECAP: The One Big Beautiful Bill Act (OBBBA) signed into law on July 4 was a reconciliation package that passed the Senate with a simple majority in the Senate and encompassed top Republican tax and spending priorities. PHCC secured a number of wins in the bill with permanent extensions of higher estate tax thresholds, deductions on qualified business income, and bonus depreciation, and eligibility for Pell Grants to be used for short-term job training programs. On the other hand, OBBBA also sunsets tax incentives for residential and commercial energy efficiency improvements. These items are all tied to the federal budget.
However, the reconciliation process is not a means to secure just any policy priority. For example, PHCC would not be able to use the opportunity for another reconciliation package to push for preemption of gas bans at the state and local level because it is wholly unrelated to the budget process and must therefore be pursued through the traditional legislative process requiring cloture in the Senate.
WHAT NOW? Congressional Republicans may have a tough uphill climb this time around. OBBBA included the bulk of tax and budgetary priorities championed by the Trump administration and conservative political base, yet barely passed on party-line margins in the House while requiring Vice President J.D. Vance to cast the tie-breaking vote in the Senate. The appetite even among House and Senate Republicans is not as strong for a second reconciliation bill that would likely include the 40 or so tax policy priorities that were not addressed in OBBBA.
Furthermore, Congress must not only figure out how to fund the federal government past September 30, it must also consider Farm Bill reauthorization in addition to highway reauthorization and potentially reforming the Energy Policy and Conservation Act. Prioritizing another reconciliation package would further forestall these legislative priorities.
PHCC will monitor developments on a potential second reconciliation package and provide updates when available.
