Rapid Readout: The Latest on Budget Reconciliation

Welcome to a new twist on the typical EESI Congressional briefing: EESI Rapid Readouts! Things are happening faster than ever, and you need information quickly. These 30-minute interactive Readouts bring you what you need to know, when you need to know it. 

This Readout will answer your questions on the mechanics of reconciliation, how the process could unfold in the coming months, and how the package moving through Congress could affect clean energy tax incentives and other funding provided by the Inflation Reduction Act, the Infrastructure Investment and Jobs Act, and more.

To learn about the basics of budget reconciliation, as well as the annual appropriations process, watch or read the highlight notes from EESI’s February 2025 briefing, Understanding the Budget, Reconciliation, and Appropriations.

We are here to help you answer questions from your boss and constituents. Let us know what climate, energy, and environmental topics you want to see us cover in future Rapid Readouts by emailing us here. 

Highlights

KEY TAKEAWAYS

Budget reconciliation is a multi-step process that began with the House and Senate adopting identical budget resolutions earlier in 2025. EESI’s briefing, Understanding the Budget, Reconciliation, and Appropriations, describes the budget reconciliation process in its entirety. The House passed its reconciliation package (H.R.1) on May 22.  Senate committees then drafted and released their respective texts, which the Senate Parliamentarian reviews for “privilege” problems and compliance with the Byrd Rule. Privilege review determines whether any language in the bill threatens its protection from the filibuster. The Byrd Rule aims to keep provisions that are not budgetary in nature out of the bill. The initial text from the Senate Committee on Environment and Public Works included a pause of the methane tax, cuts to or elimination of Inflation Reduction Act programs including the Greenhouse Gas Reduction Fund, a repeal of the tailpipe emissions rule for light- and medium-duty vehicles, and an opt-in fee for expedited review of certain infrastructure projects under the National Environmental Policy Act. The clean energy tax credits provided by the Inflation Reduction Act are undergoing particular scrutiny throughout the reconciliation process. The House bill repeals the credits that go directly to consumers and households after 2025, while phasing out other credits.  Other policy items of note include registration fees for electric and hybrid vehicles; changes to foreign entity of concern policies, which would impact supply chains for batteries and critical minerals; and public land sales. Republicans intend to use budget reconciliation to increase the debt limit. This likely needs to pass before the August recess to avoid reaching the “X Date,” which is when the Treasury Department will have used up its extraordinary measures and the federal government will risk default.  The minority party plays a role in budget reconciliation, including by sharing information about potential Byrd Rule violations with the Senate Parliamentarian, offering objections on the Senate floor, and trying to shape the politics of what is happening.