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Yarmuth sees next budget reconciliation process starting in July

Budget chairman concedes his timeline is a "guesstimate," and no clarity yet on what will go in the package

House Democrats could start the process in July for a second budget reconciliation bill that could be used to pass infrastructure spending, climate change legislation, health care measures and parts of an immigration overhaul, Budget Chairman John Yarmuth said Tuesday.

While no decisions have been made, the Kentucky Democrat said his colleagues have begun exploring their options for another reconciliation measure that would skirt a Republican filibuster in the Senate. He said the goal would be to adopt reconciliation instructions in July, as part of a fiscal 2022 budget resolution, and pass the package by the end of September.

Democrats are using the reconciliation process, which allows for passage on a simple majority vote, to push through a $1.9 trillion pandemic relief package over united Republican opposition. Yarmuth made clear the same procedure was likely to be used later this year to pass his party’s top legislative priorities that come with hefty price tags.

“Reconciliation is always Plan B,” Yarmuth said. “We would all prefer not to use it. But you know, I think the climate stuff will be in it, to the extent we can get climate stuff in it. There’ll be some health care stuff in it, I think. People want to try to do parts of immigration reform in it.”

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While reconciliation is a tempting tool for the majority party to use in a polarized Congress, it does come with drawbacks. The Senate’s “Byrd rule,” named after the late Sen. Robert C. Byrd, D-W.Va., carries numerous restrictions on what can be included; for instance policies that don’t have a direct budgetary impact or whose budget effects are “merely incidental” to the underlying policy. 

That means new environmental regulations and liberalized immigration rules may have a tough time getting past the Byrd rule, though clean energy tax incentives and spending on broad infrastructure programs could probably make the cut.

However, myriad policy changes as well as “congressionally directed spending” — otherwise known as earmarks — would face tough sledding under the Byrd rule. House Transportation and Infrastructure Chairman Peter A. DeFazio, D-Ore., has said he’s reluctant to resort to reconciliation to pass a major infrastructure spending package because of the Senate’s restrictions.

“I don’t understand the ‘dead guy rule’ and I don’t care to,” DeFazio said last month. “They should just do away with it.” 

The last major surface transportation law to contain earmarks became law in 2005. It contained thousands of line items, including the infamous “Bridge to Nowhere” that helped lead to lawmakers’ ban on home-state projects in 2011.

But the Senate’s parliamentarian ruled that two provisions in the virus aid package, proposals to steer funds to an upstate New York bridge and a Silicon Valley transit project, didn’t pass the Byrd test. That doesn’t bode well for an earmark-laden infrastructure reconciliation bill.

Lawmakers could still move a big highway and transit funding bill separate from reconciliation, and they have a built-in deadline for action: The current surface transportation authorization law expires Sept. 30. 

Yarmuth said discussions about the content of the next reconciliation bill remain preliminary. “I don’t think anybody’s quite gotten there yet,” he said.

White House Press Secretary Jen Psaki on Tuesday also declined to say that infrastructure would for sure be part of the next filibuster-proof package. “We don’t even know that it will be an infrastructure bill,” Psaki said at her daily press briefing. “In terms of what it will look like and what the negotiations will require, we’re happy to have that conversation when it’s appropriate.”

‘Kitchen sink’ approach

With so many pent-up demands for spending initiatives, the talk could lead to a “kitchen sink” approach for what could be a mammoth bill. “Everybody’s going to want to throw something in there,” Yarmuth said.

One item eagerly sought by Democrats that appeared unlikely to make the cut would be an increase in the federal minimum wage. That measure had to be stripped from the pandemic relief bill when the Senate parliamentarian, Elizabeth MacDonough, ruled that its budgetary impact was “merely incidental” to the policy objective. 

Yarmuth said Democrats were more likely to pursue a minimum wage boost in standalone legislation. “If she’s going to rule it’s incidental, then I don’t know how you write it” to pass legal muster in a reconciliation bill, he said.

The first step in pursuing a second reconciliation bill would be the adoption of a fiscal 2022 budget resolution. That measure would provide “instructions” to authorizing committees to draft various pieces of the package.  

Work on the budget resolution was unlikely to come before July, Yarmuth said, partly because President Joe Biden’s fiscal 2022 budget request will be months late.

The administration, which still lacks a budget director, may not submit a budget for the coming fiscal year until May, or possibly late April, Yarmuth said. But he cautioned that his timeline amounted to “guesstimates” based on the time that a new budget director will need once confirmed.

If the budget resolution is adopted before the August recess, work on the actual reconciliation bill would occur in September, Yarmuth said. 

Jessica Wehrman and Jennifer Shutt contributed to this report.

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