Q&A: Rep. Tom Cole On Potential Upcoming Budget Reconciliation

Republican leaders in Congress and President-elect Donald Trump are planning to try to enact significant policy changes once the new Congress is sworn in and after the presidential inauguration next month. They have made clear they intend to use a legislative process known as budget reconciliation, or just ‘reconciliation’, to achieve their goals. Congressman Tom Cole is well-versed in the complexities of this process.

Can you briefly describe reconciliation?

Cole: “Reconciliation is a very unusual tool…you can only use it once during what's called a fiscal year, which stretches from September 30th to September 30th. Technically, this (coming) year, we could do two. You could have one between now and September 30th and one after September 30th. And there's been some discussion about that. What it lets you do is, for one time in budget-related matters only, spending, you don't have to reach the filibuster in the United States Senate. So you can pass a Republican tax proposal bill if you can get all the Republican votes.”

One of the things Republicans have said that want to use reconciliation to pass is an extension of (and perhaps improvements on) many of the tax provisions from the 2017 Tax Cuts and Jobs Act; why do you believe that’s so important?

Cole: “The Trump tax cuts, which were put in place in 2017, all expire next year. So, that would be about a $4 trillion tax increase, and over two-thirds of it, or something like two-thirds, would actually be individual taxes…[Also] you'd have a major tax increase in corporate income tax—it would move from 21 all the way back up to 35%. So, you really need to get this tax deal done. And, you know, the president-elect made a number of commitments when he was running for president—things that he wanted to see. We might not get them all, but we have a much better chance of getting them under reconciliation than we do if we were to move through the normal process.

In total, reconciliation has been used 23 times to pass legislation since the procedure was created in 1974; what are some of its most recent uses?

Cole: “Democrats use the same tool exactly the same way. It's how they passed, the (2021) American Rescue Plan on a straight party-line vote. We weren't able to filibuster it in the Senate, and they got pretty much what they wanted. It's how they passed the much-misnamed Inflation Reduction Act. You know, those two bills between them spent about $2.8 trillion that we didn't have on things that, for the most part, Republicans didn't agree with. But they used it, and so Republicans will now use it. And, to be fair, we used the same tool back in 2017 to pass the first Trump tax cuts.”

There are restrictions on what sort of things can be included in bills that are considered through reconciliation, correct?

Cole: “Exactly, it's very complex, they (the provisions) have to be germane to the budget and to spending. and there are certain things you can't do. For instance, you couldn't deal with Social Security under this. By statute, you cannot put Social Security under this and deal with it. And so, again, it's tricky to use. It's very complex and nobody gets everything they want, but it is a chance to move major financial legislation—tax in particular—without the other side being too much able to obstruct you.”