What it is
A reconciliation bill is a legislative tool used in the U.S. Congress, primarily in the Senate, to expedite the passage of legislation related to the federal budget. It allows for certain tax, spending, and debt limit bills to pass with a simple majority (51 votes, or 50 plus the Vice President's tie-breaking vote) instead of the 60 votes typically required to overcome a filibuster.
Reconciliation bills are often used by the party in power to pass significant budget-related policy changes when they have a slim majority in the Senate, as seen with the 2017 tax cuts. These bills frequently contain provisions impacting corporate tax rates, capital gains rates, or social programs like Medicaid. Market participants monitor reconciliation efforts closely, as their passage can have substantial economic and fiscal consequences.
Why it matters
Reconciliation bills can enact major tax and spending policies with a simple majority, directly impacting government finances and specific sectors.
Reviewed under editorial standardsUpdated September 26, 2026Not investment advice