Congress Wrote the Budget Rules. Then It Decided to Ignore Them.

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I am a regular contributor to Barrons.com. The post below originally appeared there on 6.3.2025.

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Reeling from years of executive overreach and fiscal chaos, Congress passed a sweeping law intended to bring order and discipline to government spending. The Congressional Budget and Impoundment Control Act of 1974 created the House and Senate Budget Committees, established a formal calendar for passing a budget, and introduced new tools, such as the reconciliation process, to align laws with fiscal goals.

Fifty years later, Congress still uses these terms. But the budget-setting process? That is now mostly just theater.

The modern process bears little resemblance to what lawmakers envisioned in 1974. Today, the “regular order” of passing a comprehensive budget resolution and 12 individual appropriations bills has all but collapsed. In its place is reconciliation. A once-narrow tool meant to fine-tune deficits and mandatory spending is now used to muscle through landmark legislation.

It is easy to see why reconciliation has become the go-to method to pass major legislation. Reconciliation bills can’t be filibustered in the Senate, require only a simple majority to pass, and have expedited timelines. In an era of near-permanent partisan gridlock, it is one of the few ways for the majority party to legislate without negotiating with the minority.

But this procedural shortcut comes with real costs: to transparency, to accountability, and to the very idea of Congress as a deliberative body.

How It Was Supposed to Work

The 1974 act laid out a clear process for budgeting. Each year, Congress would pass a budget resolution—a blueprint for revenue, spending, and debt. That resolution wouldn’t become law, but it would guide committees as they drafted the 12 appropriations bills that actually fund the government. If existing laws didn’t align with the budget’s goals, Congress could pass a reconciliation bill to make targeted tweaks to taxes, entitlements, or the debt limit.

This process was meant to reassert Congress’s “power of the purse” and impose a measure of fiscal responsibility. Reconciliation was just one cog in a much larger machine designed to work through regular deliberation and compromise.

That machine is broken: Congress hasn’t passed all 12 appropriations bills on time since the 1990s. Budget resolutions are often skipped entirely. And reconciliation? It’s no longer just for budgetary tweaks—it’s become the main event.

How Reconciliation Is Being Used Today

Take a look at some of the biggest laws passed in recent years. The Bush tax cuts of 2001 and 2003? Reconciliation. The Trump tax overhaul in 2017? Reconciliation. The Affordable Care Act repeal attempt? Reconciliation. The American Rescue Plan in 2021? Reconciliation.

In each of these instances, reconciliation was used not to adjust spending to match a pre-existing budget, but to enact sweeping changes in tax policy, healthcare, and social spending. In some cases, lawmakers skipped passing a meaningful budget resolution altogether—using the shell of one just to unlock and enable the powers of reconciliation.

Both parties are guilty of doing this. Democrats and Republicans alike have used reconciliation to bypass bipartisan compromise, limit amendments, and jam through bills that would struggle under normal legislative procedures.

Using reconciliation to govern fundamentally changes how laws are made. Because reconciliation bills must comply with the “Byrd Rule” (which prohibits provisions that don’t directly affect spending or revenue), lawmakers often contort major policy ideas to fit budgetary constraints. That is why the Affordable Care Act had to leave out key regulatory components when lawmakers attempted its repeal with reconciliation. It is also why the 2017 Trump tax cuts were set to expire after a decade: The Byrd Rule bars reconciliation bills from increasing the deficit beyond a 10-year window.

These distortions produce incoherent laws with baked-in expiration dates and vague promises to “fix it later.” That fix rarely, if ever, comes.

More important, reconciliation shuts out the minority party, eliminates real floor debate, and discourages amendments. In short, it replaces deliberation with party-line voting. That may be good politics, but it is bad legislating.

It also further degrades Congress’s annual budget process. When reconciliation becomes the only vehicle for major legislation, there’s little incentive to follow the regular rules—to pass budget resolutions, mark up appropriations bills, or debate funding levels openly. Instead, everything gets backloaded into end-of-year crises and partisan showdowns.

Why the Rules Matter

To most people, congressional procedure is little more than Washington process-speak. But the rules matter, because they shape what government does and how it does it.

When reconciliation becomes the default way to pass partisan agenda, we lose transparency. We lose the public hearings, markups, and compromises that are supposed to make our laws better. We get rushed, bloated bills filled with budget gimmicks and short-term patches. We lose the chance for minority voices to improve legislation, and as a result, any real need for the majority to involve the minority party at all.

When one party governs alone, it owns the outcome—but also the backlash. Policy whiplash follows. Sweeping laws are passed one year and then repealed or reversed the next, depending on who holds the gavel. No wonder so many Americans feel like nothing gets done—or stays done—in Washington.

Congress wrote the 1974 Budget Act to strengthen its institutional role in policymaking. But in increasingly using reconciliation as an all-purpose lawmaking tool, lawmakers are cutting corners on the very rules they wrote. Reconciliation isn’t inherently bad. But it was never meant to carry the full weight of America’s governing agenda.

If Congress wants to pass big laws, like the tax bill currently being considered by the Senate, it should do so through big, open debates, not procedural shortcuts. And if Americans want better governance, we should stop rewarding those politicians who treat lawmaking as a game of loopholes.