Congressional Democrats are considering breaking budget rules to enact controversial changes to immigration law. 

President Joe Biden has endorsed using the so-called budget reconciliation process to enact his multitrillion spending agenda, which would allow Congress to pass spending and tax increases along party lines, bypassing the filibuster in the evenly divided Senate. 

But Democrats threaten to oppose any reconciliation bill that doesn’t include a special pathway to full citizenship for millions of illegal immigrants. 

However, these changes in immigration policy likely would run afoul of the rules that govern what lawmakers may include in a budget reconciliation bill. 

Here is a rundown of seven key facts and considerations.

1. What Is Budget Reconciliation?

The purpose of budget reconciliation is to achieve changes in federal spending or revenues by “reconciling” the outlays and revenues that the Treasury will make and receive over the next decade with levels proposed by the concurrent resolution on the budget.

To accomplish this goal, reconciliation provides a fast-track process that limits debate in the Senate, allowing a reconciliation bill to be passed with a simple majority vote without being subject to a supermajority threshold to overcome a filibuster.

However, reconciliation was not meant simply to be a means to bypass the filibuster in the Senate to enact controversial policy changes. As a trade-off for the expedited consideration of such changes, the contents of a reconciliation bill are limited. 

2. What Byrd Rule Requires

The Senate’s Byrd rule governs what legislative provisions may be included in a reconciliation bill. The Byrd rule generally requires that these provisions must affect the budget through changes in spending or revenues. 

If a provision violates any of the six conditions of the Byrd rule, it would be considered extraneous and subject to a point of order raised by a senator. According to the Congressional Research Service, a provision is extraneous if it meets one of these conditions:

—Does not produce a change in outlays or revenues or a change in terms and conditions under which outlays are made or revenues are collected.

—Produces an outlay increase or revenue decrease when the instructed congressional committee is not in compliance with its instructions.

—Is outside the jurisdiction of the committee that submitted the title or provision for inclusion in the reconciliation measure.

—Produces a change in outlays or revenues that is merely incidental to nonbudgetary components of the provision.

—Would increase the deficit for a fiscal year beyond the “budget window” covered by the reconciliation measure.

—Recommends changes in Social Security.

The details of the budget resolution and specific provisions of a potential reconciliation bill would be important to consider. However, major changes in immigration law, such as mass legalization or special pathways to citizenship, could face significant challenges in complying with the Byrd rule. 

3. Immigration Policy Complicated

Immigration bills often can span many pages, include several titles, and detail  hundreds of policy provisions. 

For example, the U.S. Citizenship Act is 353 pages, including five titles of legislative text. The American Dream and Promise Act of 2021, which passed the House on March 18, is 56 pages long and includes three titles of policy.

In the context of considering legislative proposals such as these under budget reconciliation procedures, this complexity is relevant because the Byrd rule is applied provision by provision throughout the entire legislation.

That means that each provision of a bill must satisfy all requirements of the Byrd rule. 

Lawmakers cannot accomplish significant changes in immigration policy simply by changing spending or revenue levels in the same way that they can with tax policy, for example. 

Considered individually, many provisions of legislation making significant changes to immigration law would make no changes to revenues or outlays. However, the first test of the Byrd rule does permit inclusion of provisions that do not directly change revenues or outlays if they are “terms and conditions” under which outlays are made or revenues are required to be collected.

“Terms and conditions” is not explicitly defined in the Byrd rule. Therefore, the Senate’s presiding officer may be required to determine whether a provision is in fact a “term and condition” of a provision that changes outlays or revenues or if it is extraneous and subject to a point of order. 

4. Challenge of ‘Merely Incidental’ Test

In general, legislation providing for changes to the immigration status of illegal aliens potentially could affect the budget in four ways:

—Department of Homeland Security fees and spending related to processing immigration applications.

—Changes in spending for federal entitlement benefit programs as a result of changes in the number of people eligible after immigration status changes.

—Changes in revenues resulting from changes in wages and reporting of income.

—Economic effects resulting from changes in the labor force and population.

However, simply having a budgetary effect is not enough to satisfy all the requirements of the Byrd rule. 

A key question for purposes of compliance with the Byrd rule is whether the fiscal impacts are “merely incidental” to the policy changes. As the Senate Budget Committee has described, “Budgetary effect, without more, does not insulate a provision from violating the [Byrd rule]. Provisions that reduce the deficit may nonetheless violate” the test of whether the provision is merely incidental.

The Byrd rule states that a provision is “considered extraneous if it produces changes in outlays or revenues which are merely incidental to the nonbudgetary components of the provision.” This test requires the Senate’s presiding officer to weigh the nonbudgetary components of the provision against the budgetary impact.

Is a provision included in a reconciliation bill to achieve budgetary objectives within the jurisdiction of the committee to comply with its reconciliation instructions? Or is the purpose of a provision primarily to accomplish a change in policy, with the budgetary effects being a secondary consideration? 

The types of significant immigration policy changes that some members of Congress are demanding be included in any reconciliation bill, including a special pathway to citizenship for millions of immigrants, clearly outweigh the budgetary impact. Simply put, these types of changes in immigration status are a very big policy change. 

According to the bill sponsor, Rep. Linda Sanchez, D-Calif., the U.S. Citizenship Act “resets U.S. border policy.” That isn’t budgetary policy, but a major shift in one of the most complicated policy issues addressed by the federal government.

It also is worth keeping in mind that of the types of fiscal effects that could be caused by immigration policy changes, only Department of Homeland Security fees used to process immigration applications are within the jurisdiction of the Senate Judiciary Committee. 

And these fees have a relatively small fiscal effect compared to the increases in spending that would occur in programs outside the jurisdiction of the Judiciary Committee. 

For example, the Congressional Budget Office estimated that if the Dream Act of 2017 had been enacted to provide amnesty for some illegal immigrants, Department of Homeland Security processing fees and spending would reduce the deficit by $10 million over 2018-2028. Meanwhile, spending for benefit programs outside the Judiciary Committee’s jurisdiction would increase by $26.8 billion.

Even the Center for American Progress, which advocates large-scale immigration, admits that to comply with the merely incidental test, “one can’t simply add on a small fee, for example, to an otherwise massive policy change in an attempt to change federal revenues.”

It is clear that the point of these relatively small fees are not to reduce the budget deficit, but to allow the policy change encouraging more immigration to move forward. 

5. Adding to Deficit Outside Budget Window

Congress established the budget reconciliation process as a way for lawmakers to reduce the deficit. That is why the Byrd rule prohibits reconciliation bills from increasing the deficit in any year outside the budget window. 

That is also the reason why Congress was forced to set expiration dates for significant parts of the tax relief provided by the Tax Cuts and Jobs Act of 2017 in a reconciliation bill.

The restriction on increasing deficits over the long term also presents a significant challenge to proponents of including mass immigration changes in a reconciliation bill. 

The Congressional Budget Office repeatedly has indicated that these types of policy proposals would have significant fiscal costs that increase over time. The CBO has stated: “Policies that allow currently unauthorized residents to become [lawful permanent residents] would, over time, increase spending for a variety of federal benefits.” 

In its cost estimate for the Dream Act of 2017, the CBO found that the proposal would increase “on-budget deficits by more than $5 billion” in at least one of the 10-year periods beyond the budget window. 

Even if immigration policies manage to comply with all of the other parts of the Byrd rule, the prohibition on increasing out-year deficits would force policymakers to make tough choices. 

They could insert a provision in the reconciliation bill that permanently would prohibit immigrants from being eligible for entitlement benefits such as those from Social Security, Medicare, or welfare programs.

Alternatively, lawmakers would be forced to cut significantly other mandatory spending within the jurisdiction of the Senate Judiciary Committee to more than offset the higher spending. This represents a challenge because the Judiciary Committee has a relatively limited jurisdiction over mandatory spending compared to other committees—only about $19 billion worth in fiscal year 2021. 

6. Deficit Reduction Act of 2005 Not Precedent

Proponents of enacting mass legalization of illegal aliens through the reconciliation process point to the Deficit Reduction Act of 2005 as “a strong precedent for the inclusion of legalization in a budget reconciliation package.”

Despite the claim, the 2005 reconciliation bill provides no precedent for the Senate in adjudicating whether such provisions might be considered extraneous to a reconciliation bill.

Heritage Foundation experts have described the formation of precedents in the Senate:

Precedents can be created by one of three methods in the Senate. First, they can be established pursuant to rulings of the Presiding Officer, or Chair, on points of order against violations of the Senate’s rules. … These rules are not self-enforcing, and violations that do not elicit points of order do not necessarily create new precedents. The second method by which a precedent can be created is pursuant to a vote of the full Senate on an appeal of the Presiding Officer’s ruling on a point of order. Finally, responses by the Presiding Officer to parliamentary inquiries may also create new precedents. It is important to note that such precedents are not considered as binding on the institution as those established pursuant to a definitive action like a ruling of its Presiding Officer or a vote of the full Senate.

The Byrd rule is not self-enforcing: A senator must raise a point of order against an extraneous provision in order to strike it from a bill. 

Importantly, this means that unless a point of order is raised by a senator, there is no opportunity for precedent to be set via a ruling by the presiding officer or an appeal of that ruling. 

Put differently, the absence of a point of order being raised does not necessarily imply that a provision satisfies the Byrd rule. 

This understanding of how precedent is set in the Senate is vital for understanding that no relevant precedent was established during consideration of the Deficit Reduction Act of 2005. 

No precedent was set regarding changes in immigration policy and the Byrd rule because no point of order ever was raised by a senator regarding those provisions. 

In fact, the Democratic staff of the Senate Budget Committee identified parts of the changes in immigration policy related to procedures for adjusting the immigration status of aliens already in the United States as violating the Byrd rule. 

However, no senator raised a point of order against the offending provision. Thus, the provision remained in the Senate-passed version of the bill. 

No relevant precedent related to including immigration policy changes was established in 2005.

7. Big Changes Shouldn’t Occur Through Reconciliation

To sum up, some have advocated including major changes in immigration law in a budget reconciliation bill. 

However, proponents of these controversial policy changes would face significant challenges in complying with the Byrd rule, which requires provisions of reconciliation bills to be related to the budget, not policy changes. 

Even if changing immigration policy may affect the budget, those fiscal effects cannot be “merely incidental” to the policy changes. Furthermore, there is no relevant precedent for changes in immigration law satisfying the Byrd rule requirements. 

Lawmakers should reject calls for including such significant immigration changes in the budget reconciliation process.

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