Comparing the House vs. Senate on FY 2025 Reconciliation
The concurrent budget resolution for Fiscal Year (FY) 2025 has been adopted by both the House and Senate. It includes reconciliation instructions that set up trillions of dollars in additional borrowing over the next decade.
The table below compares the reconciliation instructions and major fiscal and budgetary metrics within the concurrent resolution, divided by chamber and what the fiscally responsible approach would be.
| Fiscally Responsible | House | Senate | |
|---|---|---|---|
| Net Deficit Impact | $0 or less | +$2.8 trillion | +$5.8 trillion* |
| Minimum Gross Deficit Reduction | At least as much as gross deficit increase | -$2.0 trillion | -$4.0 billion |
| Maximum Gross Deficit Increase | No more than gross deficit reduction | +$4.8 trillion | +$5.8 trillion* |
| Implied Baseline | Current Law | Current Law | Current Policy |
| Debt Ceiling Increase | Increase coupled with deficit reduction and/or budget process reforms | +$4.0 trillion | +$5.0 trillion |
| Economic Growth Assumptions | CBO baseline assumptions | The budget assumes a 2.6% average annual real GDP growth rate | |
| W&M/Finance Instruction | Net deficit reducing | +$4.5 trillion | +$1.5 trillion |
| Additional Restraints | Abide by PAYGO, add the Conrad Rule, and/or put in place a total limit on new borrowing | Amendment requiring Ways & Means Committee instruction to be reduced by $1 for every $1 that gross deficit reductions are below $2 trillion and increased by $1 for every $1 that gross deficit reductions are above $2 trillion | Non-binding spending reduction reserve fund calling for $2 trillion in savings |
* Assumes $3.8 trillion deficit increase from extending TCJA under “current policy” gimmick.
A fiscally responsible approach would result in lawmakers using reconciliation to reduce deficits, not increase them. It would also use a current law baseline and assume a reasonable level of economic growth in-line with forecasts from the Congressional Budget Office and other outside estimators, and any increase in the debt ceiling would be coupled with either solutions that reduce deficits, budget process reforms, or both. A fiscally responsible budget would also force lawmakers to adhere to measures like PAYGO and the Conrad Rule, which require that costs are offset.
Unfortunately, neither the House nor Senate approaches to reconciliation are fiscally responsible – though the Senate approach is more than twice as reckless as the House’s. As policymakers craft an ultimate reconciliation bill, they should work to put in place a bill that reduces deficits or, at the very least, doesn’t make our currently unsustainable fiscal situation any worse.
