Via 538:
The recent fight between Senate Democrats and Republicans over the rules that would govern the chamber this session was complicated and arcane. All you really need to know is that Democrats don’t seem likely to use their slim majority to gut the filibuster. So, what exactly can Democrats do with a governing trifecta (control of the U.S. Senate, House and presidency) but not a filibuster-proof margin in the Senate? And, just as importantly, what can’t they do?
This is the really big one. There are a lot of good, detailed primers on reconciliation online, so I will describe it only briefly here. Essentially, as part of each year’s budget process, the Senate can adopt at least one large bill that is not subject to the filibuster and therefore pass it with a simple majority. Generally, the provisions in these bills must be related to taxes and spending. In theory, Democrats could pass at least three reconciliation bills before the 2022 midterms (ones for the 2021, 2022 and 2023 budget cycles). But these bills are subject to all kinds of intricate rules, with the Senate parliamentarian, a nonpartisan official, in the position of determining what can and can’t be included.
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