GlossaryDebt limit & Congress
Budget reconciliation
A fast-track procedure that lets budget-related bills pass the Senate with a simple majority instead of 60 votes. Many of the largest tax and spending laws of recent decades used it.
A way around the filibuster
Most legislation needs 60 votes in the Senate to overcome a filibuster. Reconciliation, created by the Congressional Budget Act of 1974, is an exception: debate is limited, and a bill can pass with a simple majority. For a party that controls both chambers and the White House but lacks 60 senators, it is the main route to large fiscal legislation.
How it starts
Congress first adopts a budget resolution containing reconciliation instructions, which direct committees to change revenue, spending or the debt limit by specified amounts. The committees draft the legislation, and it is combined into a single bill that moves under the special rules.
The Byrd rule
The shortcut comes with limits. Under the Byrd rule, named after Senator Robert Byrd, provisions must change spending or revenue in more than an incidental way, and the bill may not increase deficits beyond the period covered by the budget resolution, usually ten years. Provisions that break the rule can be struck out. This is why many tax cuts passed through reconciliation are written to expire.
The laws it produced
Some of the largest fiscal laws of recent decades were passed this way, including the Tax Cuts and Jobs Act of 2017, the American Rescue Plan Act of 2021, the Inflation Reduction Act of 2022 and the One Big Beautiful Bill Act of 2025, which also raised the debt limit by $5 trillion.
Why it matters for the debt
Reconciliation was originally conceived as a tool for bringing budgets into line. In practice it has been used in both directions: for deficit reduction packages in the 1990s, and for large tax cuts and spending increases since. Because it allows sweeping changes with a narrow majority, it is one of the most consequential levers on the long-term path of the debt.