The One Big, Beautiful Bill Act (OBBBA) — the budget reconciliation legislation that includes President Donald Trump’s tax, spending, energy, and immigration priorities — is nearly ready for consideration by the U.S. Senate. (Readers will recall that the U.S. House of Representatives approved this bill last month.)
Before Senate floor debate and votes can happen, however, because of a provision called the “Byrd rule,” the chamber’s parliamentarian must review the contents of the OBBBA to make sure they comply with the Senate’s reconciliation rules. (The Senate parliamentarian is a nonpartisan employee of Congress who enforces Senate rules. The current parliamentarian, Elizabeth MacDonough, has held this role since 2012.)
What is the “Byrd Rule,” and why is this step necessary? Where does the process stand as of today, and what does the Senate version of the OBBBA now look like as a result of the parliamentarian’s work so far? Let’s take a look.
The Origins of the “Byrd Rule”
The OBBBA is a budget reconciliation bill. Reconciliation is a procedure that was established by Congress through the Congressional Budget Act in 1974 as a mechanism to implement policies that have been outlined in an annual budget resolution. Reconciliation was deemed necessary because, unlike most bills passed by Congress, budget resolutions, which are not signed by the president, do not have the force of law. Instead, they are basically a list of policies that either Congress or the White House would like to see implemented. Budget reconciliation bills are therefore best contemplated as a mechanism for Congress to get a budget resolution’s “wish list” implemented.
From the outset, budget reconciliations, as the name implies, were intended to have something to do with spending, taxes, and the national debt.
In the first several years after the Congressional Budget Act was approved, that is not what happened in practice.
According to the Congressional Research Service, or CRS, which is the nonpartisan research arm of the federal legislative branch, “During the first several years’ experience with reconciliation, the legislation contained many provisions that were extraneous to the purpose of implementing budget resolution policies.” More specifically, “The reconciliation submissions of committees included provisions that had no budgetary effect, that increased spending or reduced revenues when the reconciliation instructions called for reduced spending or increased revenues, or that violated another committee’s jurisdiction.”
Enter the “Byrd Rule.”
In the mid-1980s, the late Sen. Robert Byrd (D-W.Va.) proposed legislation that would put limits on what policies could be considered as part of a budget reconciliation bill. “[W]e are in the process now of seeing … the Pandora’s box which has been opened to the abuse of the reconciliation process,” Sen. Byrd argued at the time. “That process was never meant to be used as it is being used. … Henceforth, if the majority on a committee should wish to include in reconciliation recommendations to the Budget Committee any measure, no matter how controversial, it can be brought to the Senate under an ironclad built-in time agreement that limits debate, plus time on amendments and motions, to no more than 20 hours.”
The Senate adopted the “Byrd Rule” limitation on a temporary basis in 1985 and 1986, but, as CRS has explained, in 1990 the Senate incorporated the “Byrd Rule” into the 1974 Congressional Budget Act, making it a permanent feature of the budget reconciliation process.
One other important note: “Byrd Rule” only applies in the Senate. There is no comparable rule in the U.S. House of Representatives.
What Does The “Byrd Rule” Do?
The “Byrd Rule” provides six guidelines for what type of policies generally may not be included in a budget reconciliation bill. Anything that falls into one of these six categories is considered extraneous. The six guidelines call for eliminating provisions that:
- Do not produce a change in outlays or revenues or do not change the terms and conditions under which outlays are made or revenues are collected;
- Raise spending or cut revenues when the Senate committee calling for the change was not in compliance with the budget reconciliation instructions given to it;
- Are outside of the jurisdiction of the committee that submitted the provision;
- Produce a change in outlays or revenues that is merely incidental to the policy the provision seeks to implement;
- Increase the deficit for a fiscal year beyond the budget window covered by the reconciliation measure (normally the budget window is 10 years); or
- Make changes in Social Security.
As the Economic Policy Innovation Center has explained, before the Senate can consider a budget reconciliation package, the Senate Budget Committee must provide a list of extraneous provisions so that they can be published in Congress’s official record. Any senator can then raise a point of order against an extraneous matter. This point of order “must specify both the offending provision and the ‘Byrd Rule’ test it violates.”
The Senate parliamentarian then rules on each point of order raised. This process is often referred to as a “Byrd bath” since it is meant to wash clean a budget reconciliation bill from any offending, extraneous provision.
If a provision is ruled out of order, members of the chamber are able to overrule that decision — this process is called a motion to waive the “Byrd Rule” — but motions to waive need the support of 60 senators to be successful.
Since 1985, the “Byrd Rule” process has been applied for 23 budget reconciliation bills. (The OBBBA would be the 24th.) According to CRS, over that time, 83 points of order and 69 motions to waive the “Byrd Rule” have been considered and disposed of. Additionally, 73 points of order were sustained, in whole or in part, and 60 waiver motions were rejected.
Currently, the Senate parliamentarian and presiding officer are working their way through a number of points of order regarding the OBBBA. Let’s turn now to where those efforts stand.
The OBBBA “Byrd Bath”
Senators have objected to numerous OBBBA provisions, about 60 in all. Democrats have generated most of these challenges. Indeed, Senate Budget Committee Ranking Member Jeff Merkley (D-Ore.) pledged that “Democrats will not stand idly by while Republicans attempt to circumvent the rules of reconciliation in order to sell off public lands to fund tax breaks for billionaires. We will make sure the ‘Byrd Rule’ is followed and review any changes Republicans attempt to make to the bill.”
According to The New York Times, so far, Parliamentarian MacDonough has advised that nearly three dozen provisions in the OBBBA are out of order. The offending policies include:
- Elimination of Consumer Financial Protection Bureau funding;
- Proposed pay cuts for employees at the Federal Reserve;
- A transfer of functions and duties of the Public Company Accounting Oversight Board to the Securities and Exchange Commission;
- Elimination of the Treasury Department’s Office of Financial Research (OFR);
- New rules that would give Congress greater power to overturn federal agency rulemakings;
- Proposed bonuses for federal workers who recommend cost-cutting measures for their departments and agencies; and
- New rules that would provide additional authority for state and local law enforcement officials to arrest noncitizens suspected of being unlawfully present in the United States.
One provision that has survived the parliamentarian’s watchful eye: language that would restrict state governments’ authority to issue rules and regulations related to artificial intelligence (AI). This provision originated in the House’s version of the OBBBA and was thought to be exceptionally vulnerable to “Byrd Rule” challenges. And it probably would have been if Sen. Ted Cruz (R-Texas) had not intervened. As The Hill explained, Sen. Cruz rewrote the provision so that it now advises that “states would be prohibited from regulating AI if they want access to federal funding from the Broadband Equity, Access and Deployment (BEAD) program.” The version written into the House bill had “called for a blanket 10-year moratorium on state laws regulating AI models and systems, regardless of funding.” Tying the regulation to federal appropriations seems to have been enough for the AI regulation ban to not get washed away in the “Byrd bath.”
The parliamentarian still has several challenges to consider. Once her work is done, the Senate can start debate on the OBBBA and any motions to waive the “Byrd Rule.” Republicans are still pushing to have a bill finished by July 4th, with a likely Senate “vote-a-rama” in store for this weekend ahead of a final vote.