Reconciliation is a procedure by which legislation is given expedited consideration in both the House of Representatives and the Senate if it meets certain criteria, which are set out in section 310 (CBA). First, the legislation has to be planned for and instructions for its introduction included in a Congressionally-adopted concurrent resolution on the budget. Second, all the provisions included in the bill, oddly enough including its short title and table of contents, must have a budgetary effect. If not, a provision will violate the “Byrd Rule“, which is set forth in section 313 (CBA).
A reconciliation bill is privileged in both the House and the Senate, which has importance in the Senate since it is limited as to both time and amendments. Amendments must be germane to the underlying bill and debate is limited to fifty hours for a reported measure and twenty hours for a conference report. This means that a bill may not be filibustered, and does not require sixty votes to end debate.
An essential part of the reconciliation procedure is its limitation: It may only be used as a consequence of a properly adopted concurrent resolution on the budget (no deeming resolutions count). More importantly, it only allows for a maximum of three bills — or chits, as a metaphor. One for a revenue bill, one for a spending bill, and one for a debt limit change bill. Each of these chits may be used in any combination, but no more than three discrete bills — hence on chit per bill, or two for one bill and the last for a second bill. Or one may spend them all in a single bill. Once a “chit” is spent, it may not be used again. The complexity of this system is courtesy entirely of the Senate Parliamentarian — specifically Robert Dove in the late 1990s (a very smart guy, but this was a questionable ruling).
Though it has never been done, it is commonly understood, and a later Senate Parliamentarian informally confirmed, that an amended budget resolution could “reset” the system, and allow for an additional round of reconciliation bills — but that would entail, as set forth in section 304 (CBA), another House and Senate vote, tantamount in many ways of adopting another budget resolution.
GAO Glossary of Terms and Definition (September 2005)
A process Congress uses to reconcile amounts determined by tax, spending, credit, and debt legislation for a given fiscal year with levels set in the concurrent resolution on the budget for the year. Section 310 of the Congressional Budget and Impoundment Control Act of 1974 (2 U.S.C. § 641) provides that the resolution may direct committees to determine and recommend changes to laws and pending legislation as required to conform to the resolution’s totals for budget authority, revenues, and the public debt. Such changes are incorporated into either a reconciliation resolution or a reconciliation bill. (See also Concurrent Resolution on the Budget; Congressional Budget Act.)
Congressional Budget Process: An Explanation (Senate Budget Committee)
Definition of Reconciliation Process
Reconciliation Process: A process by which Congress includes in a budget resolution “reconciliation instructions” to specific committees, directing them to report legislation which changes existing laws, usually for the purpose of decreasing spending or increasing revenues by a specified amount by a certain date. The legislation may also contain an increase in the debt limit. The reported legislation is then considered as a single “reconciliation bill under expedited procedures.”
[The Congressional Budget Process: An Explanation, Appendix J (Glossary), Committee on the Budget of the U.S. Senate, S. Prt. 105-67 (Revised December 1998).]