Reconciliation Must Adhere to Guiding Principles

Washington, DC – Reconciliation must adhere to guiding principles. Bipartisan Policy Center President Jason Grumet issued the following statement:

Reconciliation was created to give the budget process a form of fiscal restraint, bringing coordination and discipline through top-line spending limits and revenue obligations for relevant committees.

Despite the irony of its recent policy applications, reconciliation’s statutory limits on policy provisions significantly inhibit effective policy design. This process was never intended to create new programs and policy. In a closely divided country, the explicit exclusion of opposing party input is a significant limitation on durable policy design.

For these reasons, the Bipartisan Policy Center opposed Republicans using reconciliation to pass President Trump’s tax cuts, and we believe the reconciliation process will fail to achieve its stated policy goals even if achieving unified support among congressional Democrats. Despite these strong misgivings, our assessment is that the Biden administration and Democratic leaders in Congress will succeed in advancing a reconciliation package that could hover between $1.5 to $2 trillion. To soften the blow of partisanship inherent to reconciliation, BPC urges Democrats to consider six criteria when prioritizing program spending:

1. When developing new programs, Congress must pay for it.
2. Include ‘means testing’ to spend resources efficiently and ensure the programs go to those individuals and families most in need of support.
3. Avoid funding cliffs, which hide the true long-term costs of decisions and lead to poor governing and policy uncertainty.
4. Acknowledge the limitations in government’s capacity to execute new programs effectively and efficiently. It serves no one well to obligate resources beyond the programmatic capacity of the government to spend.
5. New or expanded social welfare programs should not disincentivize work. Policies should be designed to help people find jobs and maintain an attachment to the workforce.
6. Lawmakers must prioritize programs with a history of broad-based bipartisan support so the country and individuals may benefit from policies that endure.

By following these fundamental principles, Democrats will increase the likelihood of effectuating successful and durable programs.