The Senate parliamentarian issued a ruling Monday night paving the way for the unlimited use of a budget procedure to bypass the legislative filibuster.
The ruling by Elizabeth MacDonough — who is largely unknown to the public — could change how Washington operates and give Democrats significant leeway to advance their agenda over the next two years.
Here are five reasons why the decision is a game changer.
Biden can potentially get a lot more done without GOP support
The most immediate change stemming from the parliamentarian’s decision is that President Biden suddenly has more options for passing major parts of his agenda, even with a 50-50 split in the Senate, and Vice President Harris’s tie-breaking vote.
“It’s important because it gives us a little more flexibility — we don’t have to push everything into one package,” Senate Budget Committee Chairman Bernie Sanders (I-Vt.) said on MSNBC on Monday night.
Budget reconciliation is a process that can sidestep a legislative filibuster, but it has to be linked to an annual budget resolution.
At the start of his term, Biden saw three opportunities to use the budget workaround. The first, using the 2021 resolution that Congress didn’t bother approving before the fiscal year started in October, was used for the $1.9 trillion COVID-19 relief bill. The second would be tied to fiscal 2022, and a third could potentially be used next year, ahead of fiscal 2023, but before Democrats face midterm elections that could result in them losing control of either chamber in Congress.
The new ruling means that Biden can theoretically go back as many times as he wants to amend the budget resolution in order to pass more policy, regardless of the fiscal year and what’s happening with the budget.
If it’s easier to break the infrastructure package up into four separate bills, for example, or if he wants to pass additional COVID-19 relief, raise corporate taxes or change the eligibility age for Medicare — all without Republican support — he now has the parliamentarian’s blessing to do so through reconciliation, or at least try.
It further erodes the power of the filibuster
Progressives have pushed loudly for Senate Majority Leader Charles Schumer (D-N.Y.) to nix the filibuster, the 60-vote threshold required to advance most legislation.
The ruling might take some of the wind out of their sails, because it will make it easier for the party in power to advance legislation with a simple majority in the Senate.
Right now that applies to Democrats, who control both chambers of Congress and the White House. In the future, it will give similar opportunities to Republicans, who found themselves in the same position in 2017 and could again in the future.
But critics of the filibuster are likely to be dissatisfied given the strict set of limitations on the kinds of legislation that can advance using reconciliation.
While the budget workaround is ideal for changing taxes, benefits, some health care parameters and even large-scale investments, it hits a wall on issues that are not directly linked to deficits.
The limits on what policies are off limits in reconciliation, known collectively as the Byrd Rule, require that any policy not be “merely incidental” to its budgetary effects, a call the parliamentarian makes on a case-by-case basis.
In late February, she ruled that a minimum wage increase didn’t cut it. Similar rulings are possible if Democrats try to advance labor rights legislation such as the PRO Act, gun legislation, voting rights and immigration reform, all party priorities.
To pass any of them, they will either need to nix the filibuster or find support from 10 Republican Senators.
It gives even more power to Sen. Joe Manchin
In an evenly divided Senate, Democrats cannot afford a single defection in passing legislation through reconciliation.
No senator has been more willing to take advantage of that power than Sen. Joe Manchin (W.Va.), the most conservative Democrat in the chamber.
Manchin says the minimum wage should only rise to $11 an hour, rather than the $15 the majority of his party is pushing, and came out against Biden’s plan to pay for infrastructure by raising the corporate tax from 21 percent to 28 percent.
He said he would oppose increasing it beyond 25 percent, and made no bones about his position.
“If I don’t vote to get on it, it’s not going anywhere,” he said Monday. “So we’re going to have some leverage here.”
Manchin has proven that he means business. He put the nail in the coffin of White House budget director nominee Neera Tanden when he said he would not vote to confirm her.
But others are catching wind of the game and starting to raise their voices, meaning it may be more difficult to keep the ideologically diverse 50-member caucus united.
Sen. Mark Warner (D-Va.), a centrist, also said that significant changes would be needed for Biden to pass his infrastructure plan, while progressive Sen. Ron Wyden (D-Ore.), who heads the Finance Committee, trotted out his own version of legislation on international corporate taxation that took a somewhat different approach from the one outlined by Biden.
It decouples the legislative schedule from budgeting
Because the filibuster workaround is embedded in the budget resolution, the calendar for passing legislation was somewhat tied up with the regular appropriations process for funding the government.
The reconciliation bill originates in the very same budget resolution that sets the overall spending levels for the following fiscal years, demarcating how much is set to be spent on defense and non-defense priorities.
That complicated the timeline for passing reconciliation bills, given that the overall spending levels for the year would need to be agreed upon before passing the budget.
That would be a tough lift. Biden has yet to propose his own overall spending numbers for next year, something every other incoming administration has done by mid-March. His budget office signaled that the figures would be released in the last week of March, only to delay their rollout.
Once the overall budget numbers are agreed to, Congress needs to go through the lengthy process of passing 12 separate spending bills — with a 60-vote threshold in the Senate that will require GOP support — by Sept. 30, when the fiscal year ends, or face a potential shutdown.
But the parliamentarian’s ruling that Congress can amend the resolution means the two are no longer tied together, taking one calendar obstacle off the table, or at least removing the need for other complicated workarounds.
It takes pressure off the debt ceiling
A potentially catastrophic gadfly that has pestered Washington, and Democrats in particular, over the past several administrations has been the debt limit, or debt ceiling.
Even after Congress passes its spending and tax policies, setting up deficits and borrowing requirements, the Treasury Department is legally barred from borrowing beyond a certain limit.
If Congress does not act to suspend or raise that limit when the debt runs up against it, the country would default on its debt, potentially setting off a global financial crisis.
Republicans have repeatedly used the debt ceiling as a bargaining chip, most notably in 2011 when then-Speaker John Boehner (R-Ohio) insisted on a deal to limit spending in order to increase the debt limit, resulting in a 10-year plan to cap spending that Congress proceeded to override annually.
But in good news for Democrats, Congress can raise the debt limit through a budget reconciliation bill.
The debt limit’s current suspension ends in August. The Treasury Department can buy a few extra weeks of time using internal “extraordinary measures,” but ultimately, Democrats would have had to either wrap up their infrastructure bill by then or find themselves bargaining with Republicans to raise the limit.
Democrats had pondered whether they could simply spin out separate reconciliation bills in the three areas that the process governs: spending, taxes and the debt limit.
The parliamentarian’s ruling means they no longer have to worry about that approach, nor about how the timing of the debt ceiling plays into their infrastructure plans.