Reconciliation 3.0 Could Be Worse (and a Whole Lot Better)

Republicans in Congress are in the midst of moving their Fiscal Year 2027 (FY27) “skinny” budget to initiate budget reconciliation and dodge the tripwires of the traditional legislative process. This is the third reconciliation package for the 119th Congress—a record number. For budget watchdogs who were promised spending reforms, H.Con.Res.113 comes as a deep disappointment. Weighing in at a whopping $95 billion in debt-backed new spending ($130 billion with interest), there’s little to celebrate apart from the fact that it could be worse.

Much, much worse.

Earlier, it was anticipated that reconciliation would be used to enact the President’s FY27 Budget proposal, which included a massive $350 billion in new Pentagon spending on top of a $1.1 trillion discretionary request. Traditionally, defense activities are funded through the annual appropriations process; however, even defense hawks have deemed that route unfeasible given the exorbitant price. This ostensibly one-time request was an attempt at budgetary sleight-of-hand to hide the true cost and elude congressional oversight. If enacted, the request would commit taxpayers to years of unsustainable, record-high Pentagon spending by sinking dollars into new long-term investments in infrastructure, platforms, new materiel and technology that would take years to implement, acquire, and maintain. The result would be a new, extra-large Pentagon slush fund that would exacerbate the compounding debt crisis and render the infamous Overseas Contingency Operation account quaint by comparison. Taxpayers have so far dodged this fiscal warhead.

Instead, “reconciliation 3.0” looks similar to President Trump’s supplemental spending request of June 24, 2026, which sought:

• $67.1 billion for the Pentagon, in part to offset costs related to the unauthorized Iran conflict
• $11.1 billion in “economic assistance” for farmers under the auspices of high fertilizer and fuel costs resulting from the on-again, off-again hostilities in the Middle East.
• Year-round E15 and a host of other wasteful elements.

The budget contains instructions for some of these priorities, including $60 billion for the Pentagon, $12 billion in agriculture aid, and funds to implement the SAVE America Act (H.R.7296), though it’s unclear how a policy bill with no budgetary impact will suddenly become one in order to comply with reconciliation bill requirements. The underlying text contains vague instructions for long-term deficit and interest reductions; however, as with the defense, agriculture, and election-related components, there are few details, and it is unclear how the various authorizing committees will accomplish their goals.

Again, it could be worse. Admittedly, $95 billion is less costly than $350 billion, and costly year-round E15 authorization was probably a Byrd too far for even the most twisted legislative counsel minds. But reconciliation 3.0 is far from good. Charging more spending to our national credit card and missing a golden opportunity for urgently needed spending reforms is only part of the equation. Overreliance on reconciliation—a legislative express lane intended to enable fiscal discipline—to bypass minority opposition otherwise run-of-the-mill bills carries a toll beyond the price tag.

While annual appropriations, supplementals, and electoral policy were formerly the domain of regular order, the 119th Congress is increasingly deploying reconciliation as a procedural crutch rather than accepting a potentially undesirable legislative outcome or undertaking the hard votes and negotiations necessary to achieve enactment. With much more demanding issues on the horizon (e.g., exhaustion of the Social Security trust fund, the next debt limit deadline, record national debt), members should be building up their legislative muscles rather than avoiding the work they were elected to do.

Reconciliation misuse also undermines the purpose of the federal budget. Budgets should be forward-looking, comprehensive guidelines that provide a robust picture of current and future expenses and how they will be funded—not slivers of spending for legislative expediency, as in the case of reconciliation 3.0. House appropriators have already reported out all 12 annual appropriations bills for FY27 ahead of agreement on the FY27 budget or even a deeming resolution that would set agreed-upon 302(a) allocations, eliminating even the faintest relevance between the FY27 budget bill and annual spending.  

Luckily, though reconciliation 3.0 is far from good, there is still time to make it better.

During the upcoming Senate vote-a-rama, senators should insist (at minimum) that new spending be fully offset within the fiscal year rather than at some far-off, never-to-be-realized time in the future to avoid adding to our debt and accruing interest. Sen. Rand Paul (R-Ky.) offered just such an amendment that would have paid for the previous reconciliation package (S.Con.Res.33). Though the amendment ultimately failed, it demonstrates that some legislators retain the know-how to pay for new spending and could be deployed again. Committees tasked with writing portions of the spending text should consider some of the $497 billion potential pay-fors from a recent Taxpayers for Common Sense and Project on Government Oversight report. Likewise, the House Agriculture Committee can work to efficiently and effectively target aid to those who need it most rather than to individuals who don’t even work or live on farms—particularly after distributing $55 billion in subsidy payments this year (primarily to large operations).

Congressional reconciliation abuse is starting to look like a bad habit and sets a poor precedent that will no doubt make today’s political leaders cry foul when the balance of power shifts. With new debt for a constitutionally dubious conflict, payments to wealthy agribusinesses facing higher input costs as a result of that conflict, and further erosion of our fiscal footing, it’s unclear what taxpayers stand to gain from the most recent reconciliation bill.

But not to worry—reconciliation 4.0 is coming to make everything better.