The One Thing That Could Still Torpedo Big Parts of Trump’s Big Beautiful Bill

It’s his job to get Trump’s bill across the finish line. Photo illustration by Slate. Photos by Tierney L. Cross/Getty Images and Tasos Katopodis/Getty Images.

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President Donald Trump’s “one big, beautiful bill” is heading to the Senate. It would revise the tax code, cut Medicaid rolls, roll back clean energy programs, and increase funding for border enforcement. After weeks of wrangling, the House passed the bill last week by the thinnest of margins. The bill’s fate, though, ultimately depends on an obscure Senate rule: the Byrd rule.

Republicans are trying to pass the bill through the budget reconciliation process, which allows the Senate to close debate with a simple-majority vote—an exception to the usual 60-vote filibuster threshold. The problem for Republicans is the Byrd rule, which provides that provisions can be struck from reconciliation bills if their fiscal effects are “merely incidental to the non-budgetary components of the provision.”

What does this cryptic rule mean? Which budgetary effects count as merely incidental? Many have criticized the Byrd rule as arbitrary, and it can certainly seem that way. But last year, I published a detailed analysis of Byrd rule doctrine that described several rules guiding what is and is not permitted in reconciliation bills. These guidelines will be critical in the coming months and can offer us a sense of where the OBBBA is going and what parts of it might get eliminated by the Senate.

First, applying the Byrd rule involves balancing. As the Senate parliamentarian has written, her office balances whether a provision involves “a policy change that substantially outweighs the budgetary impact of that change.” Two Senate staffers elaborated on this, noting that “the more budgetary effect, the more policy change is permissible under the Byrd rule.”

This balancing sometimes dooms legislative changes, even when they have large budgetary effects. Democrats learned this the hard way when trying—unsuccessfully—to use reconciliation to give “Dreamers” permanent legal status and raise the minimum wage under President Joe Biden. The reasoning was that while both policy changes would affect the federal fisc to the tune of many billions of dollars a year, the changes were fundamentally about policy, not budgeting. The same logic could doom some Republican proposals this year, like efforts to sell off federal lands.

Balancing can at times be difficult. We’ll see this difficulty play out with Republicans’ efforts to require Medicaid recipients to meet certain work requirements. Republicans will argue that Medicaid work requirements should be permitted in reconciliation, because they directly change federal spending: Stricter requirements mean fewer dollars going out the door. Democrats will object that the changes are in fact primarily aimed at changing welfare state policy—they are about a vision of who does and doesn’t deserve government support—and that whatever fiscal effects exist are trumped by policy effects. This issue will be resolved through balancing.

Second, provisions are more likely to survive Byrd rule scrutiny if their budgetary effects are direct rather than indirect. Direct budgetary effects means that a provision provides that money flow into or out of the federal fisc. Because changes with direct budgetary effects are usually allowed, this means Republicans will be able to use reconciliation to extend the 2017 Trump tax cuts or increase funding for immigration enforcement.

Provisions with only indirect budgetary effects, by contrast, are unlikely to be permitted under reconciliation—even if those effects are large. If a provision’s main effects are regulatory, rather than fiscal, it is not permitted even if there are some downstream budgetary impacts. This principle forecloses using reconciliation to change substantive immigration law, weaken civil service protections, or restructure or eliminate federal agencies.

The difficulty of getting provisions with only indirect budgetary impacts passed through reconciliation will almost certainly leave some provisions in the House bill dead on arrival in the Senate. The House bill, for example, included a 10-year moratorium on state regulation of A.I., but the Byrd rule will almost certainly prompt the Senate to strip out that provision. In other instances, House Republicans seem to have held off on including provisions likely to run afoul of the Byrd rule for not directly impacting the federal budget. The House bill does not contain a regulatory reform proposal long sought by conservatives, largely in anticipation of Byrd rule scrutiny. Through Senate Republicans may try to revive the provision, it stands little chance of being included in a reconciliation bill.

Third, if something was initially done through reconciliation, it can usually be undone through reconciliation as well. This is bad news for the Inflation Reduction Act’s tax credits and subsidies that seek to usher in a green energy future. Those provisions, on the chopping block in the House bill, may survive in the Senate thanks to the fact that many of their benefits flow to red states. But the Byrd rule will not stand in the way of repealing them.

Fourth, a legislative provision is more likely to be permitted in reconciliation if it revises an existing program or policy rather than creating a new one. It will usually be permissible to use reconciliation to adjust a tax rate (up or down) or change the amount of a subsidy (again, up or down). When Congress is simply changing numbers, those changes are usually permitted in reconciliation. This is why reconciliation can be used to extend the Trump tax cuts. (Reconciliation once couldn’t be used for anything that increased the deficit, which would have ruled out the tax cuts, but that hasn’t been the rule for a quarter of a century, which explains how the deficit-busting Bush tax cuts of 2001 and 2003 and Trump tax cuts of 2017 passed through reconciliation.)

Finally, reconciliation generally can’t be used to target particular recipients of federal funds. A doctrine sometimes called “targeting” bars including provisions in reconciliation bills that target just one entity, or just a small number of entities. The classic example is the restriction on using reconciliation to defund Planned Parenthood, with the idea being that if a provision is targeting just one or just a few entities, it is more likely to be in pursuit of policy goals than fiscal goals.

The doctrine of targeting won’t apply often, but it could matter in a few important instances. It means that reconciliation couldn’t be used to target a small number of disfavored entities. For example, the House bill doesn’t expressly name Planned Parenthood, but it does restrict the flow of federal funds to nonprofits that perform abortions and meet certain other conditions. If it turns out Planned Parenthood is the only entity that meets the conditions, or one of just a few, then the provision could be struck as targeting.

Given this administration’s penchant for picking fights with private entities, the little-noticed restriction on targeting could matter in other contexts as well. The version of the endowment tax passed by the House hits enough universities that it likely wouldn’t trigger a targeting challenge, but any provisions that would more directly to target particular colleges, like Harvard or Columbia, could be struck from the Senate bill.

All of this goes a long way toward making sense of the chaos of the Byrd rule process that will be unfolding in the coming weeks. When we see a provision being allowed or disallowed, the above principles will usually help explain why.

Lurking behind all Byrd rule disputes is the Senate parliamentarian. The parliamentarian’s office is a little-known nonpartisan office that has refereed Byrd rule disputes since the 1980s. Predicting how the office would rule can sometimes be difficult. But if history is any guide, majorities tend to not get all of what they want.

The fate of Trump’s legislative agenda therefore turns on the parliamentarian. Unless, that is, the Republican majority opts to fire, ignore, or override the parliamentarian. This has happened on a few occasions in the past. Democrats in 2013 and Republicans in 2017 each used the so-called nuclear option to eliminate the filibuster for nominations. Earlier this month, the same Republican Senate that will be considering the OBBBA defied the parliamentarian to disallow, by a simple majority vote, California’s ability to set its own emissions rules. We cannot discount the possibility of Republicans similarly circumventing the parliamentarian for ordinary legislation, and it is not wise to bet on norms of forbearance in our hyperpolarized age.

Yet there is reason to think Republicans will allow the parliamentarian’s judgments to stand, even if they lead some provisions to be dropped from the bill. Making it easier to pass legislation would serve Republicans today, but it would likely aid Democrats in the future. For this reason, former Senate Majority Leader Mitch McConnell long believed in maintaining the filibuster and railed against expanded use of reconciliation. John Thune, his successor, has indicated that he intends to take a similar approach.

That leaves the Byrd rule at center stage, to determine what will and won’t be permitted in the GOP’s “one big, beautiful bill.” Legislative procedure might seem arcane, but it can be critical to public policy. Anyone interested in what Congress will produce in the coming months would do well to start with the Byrd rule.