U.S. Senate Budget Committee Chairwoman Patty Murray (D-WA) and House Budget Committee Chairman Paul Ryan (R-WI) have a deadline of December 13 for writing provisions that would end the next generated fiscal crisis. Chairwoman Murray and Chairman Ryan must craft legislation that provides:
- an overhaul to the U.S. tax code,
- alternatives to the enacted budget sequestration cuts that take effect January 15,
- deficit reduction priorities,
- reductions to mandatory entitlement spending and
- generates additional revenues for the U.S.
But Chairwoman Murray and Chairman Ryan first have to decide on the how to proceed with negotiations, either through the reconciliation process or an alternate path.
Reconciliation provides instructions for a budget resolution and directs the committee to provide changes to budget and tax laws under specific cost savings and spending targets. If budget reconciliation is agreed upon under the provisions of the Congressional Budget and Impoundment Control Act of 1974 (P.L. 93-344) the Conference Committee would create the quickest way forward for the legislation to become law. The U.S. Senate would only need a simple majority (51) to pass the measure.
But, budget reconciliation presents both procedural and political hurdles.
There would be little-to-no debate on the budget reconciliation measure. Thus it would be difficult to offer amendments on the floor. In addition, both Republicans and Democrats would have to agree on revenue targets. This will make crafting legislative language regarding the tax overhaul politically difficult especially given the divergent opinions between the two parties; Republicans seeking a revenue-neutral tax overhaul while Democrats are seeking $975 billion in new tax revenues.
Given this, there is a very good chance that a budget reconciliation strategy will eventually be sidelined. An alternative plan would be to give lawmakers an opportunity to cut deals on revenue and spending targets, providing top-line numbers for appropriators and increases in revenues in the budget baseline. The flexibility in such a plan will prove attractive to lawmakers and increase the likelihood of striking a final deal by December 13.