I had the pleasure of speaking with budget expert Kevin McNellis this week. He has been doing outstanding work tracking the policy and political dynamics of the rapidly changing budget and appropriations process. We talk about the rise of discretionary spending in reconciliation bills, associated problems of congressional oversight, and the role of the Byrd rule in the current funding politics for CBP, ICE, and the Trump ballroom. A full transcript appears below.
Some of Kevin’s writing that we mention in the conversation:
How Has Funding for Federal Agencies Changed Over the Last Decade?
Original analysis showing how Congress has started appropriating trillions of dollars outside of the annual appropriations process since 2020.
The Army Clause: A Forgotten Constitutional Check on ICE, CBP and the Pentagon
Essay arguing for Congress to enforce the Constitution’s Army Clause through a new point of order, which would allow members of Congress to object to appropriations that violate the Army Clause. Co-authored with Scott Levy
My essay on the dawn of partisan appropriations also comes up.
Full Transcript
Matthew Glassman: Okay, hey everybody, I have a special treat today for, anyone who’s listening to this, and that is I’m here with, Kevin McNellis, who is an expert on the, budget and appropriations process. He is a former staffer of CBO on the Hill, a former staffer at CRS, and now he works for a group called Co-Equal, but mainly he is an absolute expert back and forth on the budget process, on reconciliation.
Matthew Glassman: And he’s been doing some incredible work, as we watch, sort of, this process change and morph before our eyes as the spending power is contested, not only between Congress and the Presidency, but the actual, sort of, appropriations process is changing in the 119th Congress before our eyes. So welcome, Kevin.
Kevin McNellis: Hi Matt, thanks for having me.
Matthew Glassman: Yeah, and I do want to let people know that Kevin does work for CoEqual, but he is here in his own capacity, and he is not speaking on behalf of any organization. He’s here as an independent budget expert, and thanks so much for talking to us. And I did want to start just by asking you to describe for us the basics of the budget and reconciliation process. You know, if you start talking to someone about this, and I’ve had this experience.
Matthew Glassman: their eyes start to glaze over, like, it’s all spending, and sort of… everyone’s like, Congress has the power of the purse, right? And Trump is trying to take that away from them. But underneath the hood.
Matthew Glassman: how this money is spent is really crucial to, sort of, policy outcomes. And so, could you just set us straight, on the different types of ways money is spent in the federal government?
Kevin McNellis: Sure, yeah, I’d be happy to do that. So, generally speaking, money is either classified as discretionary or mandatory. And at a high level, discretionary spending refers to the appropriations within the jurisdiction of the Appropriations Committee. So these are the 12 annual bills that are considered every year, as well as, supplemental appropriations and, continuing resolutions. And then on the mandatory side, you have, funding that is outside the control of the Appropriations Committees. So these are mostly entitlements, like Medicaid, SNAP, Medicare, Social Security, where you as a beneficiary have a right, to the benefits, and so that funding is carried out mostly outside the jurisdiction of the Appropriations Committees. And so, the budget process and reconciliation were created in 1974, and it was an attempt for Congress to reassert its fiscal powers after the Nixon administration. And basically, the process that Congress enacted was one that was layered on top of the pre-existing structure in Congress, right? So you had the appropriations committees doing their work every year, you had the authorizing committees, the other committees, overseeing the mandatory programs. And so the budget process created new budget committees, and their goal was to coordinate all of Congress’s fiscal actions, right? The concern was you have tax and spending committees all doing different things and maybe not coordinating. And so the mechanism for that coordination was the annual budget resolution. And this is a document that Congress agrees to itself, the House and Senate agree to it. It doesn’t involve the President, and the goal was to set a plan for the upcoming year, budget plan for the upcoming year, and then that would give instructions to all these different committees that then they would, meet. And, you know, you would sort of rationalize the taxing and spending decisions that Congress makes every year. The reconciliation process is a fast set of fast-track procedures that were designed to make it easier for Congress to reconcile those spending decisions that were made With the budget resolution, sort of acknowledging that Congress needed some flexibility. To sort of adapt, at the end of the year, at the end of the session of Congress, to make sure that the laws that were actually passed actually conformed with the budget resolution that was passed earlier in the year. Originally…
Kevin McNellis: Yep.
Matthew Glassman: Let’s go through this sort of step-by-step. So, it’s 1835, and Congress wants to spend some money, they want to pay for the army out on the frontier, or whatever, and so they pass a law saying, here’s a million dollars to support troops on the frontier. That’s discretionary spending, and maybe there’s not an appropriations Committee yet, but that’s what they’re doing, right? They’re passing a law saying, we’re going to send this much money for this year, and the president will manage the military, right?
Matthew Glassman: Right? We’re also going to have some money for the post office, and this is all discretionary spending, right? And that would be sort of what we would think of traditionally, historically, as how money was spent. Congress appropriates it this year, and then next year they appropriate more, and maybe the agencies or the president ask for it, right? And that’s discretionary spending, and that’s no different today.
Matthew Glassman: Right? When the president asked for $1.5 trillion for the military, that would be a discretionary spending request, correct?
Kevin McNellis: Yes, generally speaking, yep.
Matthew Glassman: And then, so, on the other hand, you might pass a law like Social Security in 1935 that says if you are 62 years old and you meet these qualifications, then you are entitled to these benefits going forward.
Matthew Glassman: And that would be sort of mandatory spending, right? And you’ll get those benefits forever, unless Congress changes the law, right? Sort of set it and forget it. You don’t have to have, sort of, an annual appropriation. Congress will need to fund those accounts to make sure that money gets there, but the actual sort of entitlement is going to exist if Congress does nothing, right? It’s not like the money runs out for the military on the discretionary side, but on the mandatory side, the money just is perpetual, or at least the entitlement is perpetual.
Matthew Glassman: And Congress may need to cough up the money to fund it, but may do that permanently, correct?
Kevin McNellis: That’s right, so, every appropriation, has to, in law, say, provide an amount of funding the purposes that it can be used for, and a period of availability, or how long the funding’s available for. So discretionary, you can think about it as definite amounts, definite periods of availability. You’re gonna get X amount of dollars for time period Y. mandatory spending, generally speaking, is gonna be, indefinite. So, for Social Security, it’s a permanent, open appropriation. There’s no dollar amount. It’s, it’s generated… it’s… the dollar amount is calculated based on the number of beneficiaries and their benefits that they’re entitled to. So, right, and the… the thinking there is you don’t want to have Congress every year thinking about how much money it’s going to give to Social Security when you have tens of millions of beneficiaries that rely on that funding, or, you know. like, workers are making their retirement decisions 30 years from now, right? You want to provide different levels of certainty, and… and control, right? So, right, Congress has, since 1789, primarily relied on annual appropriations for executive branch agencies because it wants to have that power, it wants to have that control over the agencies to make sure they’re responsive. To their priorities and their requests.
Matthew Glassman: And so we have this growing number of entitlements in the 60s, and we still have sitting next to it all this sort of discretionary spending we might be doing on various things, and so the budget resolution is going to tell everybody, sort of. how much they can make changes to these things. And so it’s going to provide the appropriations Committees with a total cap on how much discretionary spending can be had, and it’s going to provide the non-appropriations committees, the authorizing committee, with caps on how much money is available for them to adjust, correct?
Kevin McNellis: Yeah, that’s right.
Matthew Glassman: Yeah. And so the reconciliation process is also going to allow us to quickly reconcile this, and I think the original intent is that it’s going to allow us to reconcile the budget, meaning we can cut spending easily in this fast-track process, or we could raise taxes easily in this process, but the idea might be to bring this stuff in line.
Matthew Glassman: Spending and revenue, correct?
Kevin McNellis: Yeah, I think there’s an underappreciated aspect of reconciliation in that In its original form. there were two budget resolutions. Congress would pass one in the spring, and then it would use a second resolution to make sure that all the decisions in the fall towards the end of the year conformed with the original resolution. And reconciliation was originally designed for that second, or, like, cleanup resolution. And then what happened in 1980 is the Congress moved the reconciliation procedures to the first budget resolution. So really, that’s when you have this transformation in the process, and it becomes no longer a tool for Congress to clean up, sort of, the spending decisions within that current session of Congress, but becomes a way to have fast-track procedures for new legislation. And it was… that transformation started first in 1980, but then it was really transformed in 81, where the Reagan administration realized the power of it, and used it to sort of enact, you know, up to that point, the largest spending cuts In history, really. But that was paired with a, you know, another tax bill, right? But that’s, I think, a little bit of an underappreciated, aspect of this, is that as… I don’t think any of the original authors of the 74 Budget Act really foresaw what they were creating. And so, since that Reagan, you know, the process has continued to evolve since Reagan, but now it’s become this, fast-track set of procedures that are now used for the most prominent, highly partisan pieces of fiscal legislation. But that was… was really not the intent of the… of the procedures to begin with.
Matthew Glassman: Sure, but at a functional level now, when you say reconciliation, as someone who’s sort of half-aware, it just means this is how a unified government can pass sort of legislation on a party-line basis, regardless of whether it reconciles anything, right? You can explode the deficit by cutting taxes as sort of… you can see, you know, Tax Cuts and Jobs Act being an example, or the big, beautiful bill.
Matthew Glassman: Or you can… you can do a lot of spending on a party-line basis, right? And you can see this in…
Matthew Glassman: sort of ARPA, or the Inflation Reduction Act, right?
Kevin McNellis: I think the easiest way to think about it is you have now a complete inversion of the original design of the Budget Act. Now Congress only enacts budget resolutions but for to… to unlock the reconciliation procedures. So they’re no longer enacting a budget resolution to come up with a unified fiscal plan for the fiscal year. They’re enacting it so that they can unlock the fast-track procedures to then pass what, especially since, 2020, have been, the most partisan bills, or, you know, the highest priorities of the majority. And so… Right. As where we sit today, reconciliation has it’s become a tool for majorities to get bills to the Senate that otherwise would not pass, and it’s no longer sort of a fiscal planning tool, at all, or it’s sort of…
Matthew Glassman: Can you…
Kevin McNellis: Yep.
Matthew Glassman: You can see… you can see this right now, in that we’re doing a FY26 budget resolution after all the Appropriations Acts for FYI.
Kevin McNellis: 2 seconds.
Matthew Glassman: minus a couple accounts have already passed. And I think that’s… and, you know, and sometimes people… lament this as not the intent of the Budget Act, but this is how, sort of, institutions work, right? People twist them and game things, and this seems to be sort of the outlet for getting around the filibuster on a set of items without actually having to, sort of, abolish the filibuster. But I think that the important thing, and the thing I want to really talk to you about is some work you’ve done is that these things were still separate. Even as reconciliation was being used as a partisan tool, more and more prominently in the last decade or so, it still was quite distinctive from discretionary appropriations, and that’s the wall that we’re starting to see break down.
Matthew Glassman: There’s no rule that you can’t do discretionary appropriations, these annual acts in a reconciliation bill, but they really hadn’t. And… and…
Matthew Glassman: From a political point of view, why hadn’t this been done, right? Why hadn’t majorities sort of just observed this? I mean, I think the key point here that I guess needs to be stated is that the annual appropriations bills are subject to a filibuster, and therefore they have always traditionally been bipartisan in the Senate. There’s no way around that. Until now, we’re seeing more and more. And if you could just describe sort of where where the hole sort of gets blown in this? Where do we first start to see annual appropriations being used in reconciliation bills?
Kevin McNellis: So, I think that I’ll start with the… the American Rescue Plan, because that’s where we really see… the reconciliation process expanding. And so, what happened in ARP was… a significant, you know, hundreds of billions of dollars that were appropriated, to agencies that normally would have been what’s called a supplemental appropriation, right? Like, the appropriators would have created, a separate act that would have had additional money on top of the annual bills. And the majority at the time decided to use reconciliation instead, right? Because then it’s a 51-vote threshold instead of a 60-vote threshold. And… So that was a serious expansion, and then… in the AARP, there were a few, you know, what we would think of as traditional agency funding, right? A lot of that was pass-through funding to, like, state and local governments, unemployment insurance, but there were a few… a handful of, appropriations to agencies for their core administrative functions. Then in the IRA, you see, you know, the same Democratic majority in the 117th Congress. expand those administrative, types of appropriations, primarily to the IRS for modernization, increased enforcement. And so that’s… you see another sort of step toward a direction that normally would have been much more within the appropriations process. You’re talking about agency funding for core activities, that that’s then being provided for a decade instead of one year at a time. And then, when the Republicans, took control in the 119th, then they used, sort of, that model, for… in OBAD to then provide funding for ICBPP, DOD primarily, you know, also the Artemis mission, you know, NASA funding. So, like, they… they then sort of… there’s this other step forward where now you’re seeing a lot more agency funding, multi-year funding being included. And then now, what we’re seeing with the current ICBP bill is I mean, we’re in a really strange situation at the moment, where now you’re looking at, especially for ice. a situation where this new bill is going to provide funding entirely. Like, there is not going to be an FY26 discretionary Appropriations Act, so it… Right, I think that’s another distinction that maybe gets missed a little bit, is sort of the previous reconciliation bills you could kind of think of as supplemental. Like, they’re giving agencies more funding that they otherwise would have received in the annual act, and now we’re in the situation, particularly with ICE, where the reconciliation process is being used potentially provide all of the agencies’ funding without an annual appropriations Act. And so that’s, I think, another big step towards Congress using an alternative mechanism that historically has just been firmly within the Appropriations Committee’s jurisdiction.
Matthew Glassman: Yeah, so… and… and just to set the timeline for people who aren’t necessarily fully aware of those different bills. ARP was the big last COVID stimulus at the beginning of the Biden administration in February 2021, and IRAs, the Inflation Reduction Act, which was later in the 117th Congress. And then, OBBBA is the big, beautiful bill, which is at 2025, at the beginning of the Trump administration, and now the current CBP and ICE reconciliation is obviously, being considered right now and hasn’t yet passed. And so, you know, what you’re describing, I think, for most people, when they look at that, they say, well, this… the big sea change here is that you’re taking this stuff that was in the… annual appropriations process, which has to be bipartisan because of the filibuster, and therefore has to be a compromise with minority, and you’re moving it over to the reconciliation process, where it can be done on a party-line basis. And that makes sense to everybody, right? So, like, Biden and the Democrats want all this stuff.
Matthew Glassman: They want this extra funding for certain agencies, so they throw it into AARP, they throw it into IRA, and then Trump and the Republicans want extra money for, immigration enforcement, so they throw it into the big, beautiful bill. And then I think what you said’s really important is that now, with CBP and ICE, what we’re seeing is it’s not just extra money for this stuff, but this is going to, in some sense, replace it, right? CBP and ICE are so partisan that they don’t see any way to compromise with Democrats.
Matthew Glassman: So they’re just going to get those agencies out of the annual process and place them into the reconciliation process. And that’s a big change, but you hinted at other changes, too. Like, what is different Besides the fact that it’s a 50-vote majority, and so that we can have this party line legislating over annual appropriations, what else is different about doing this through reconciliation?
Kevin McNellis: Yeah, I think it, So, first, there’s the time period, right? This, so far, reconciliation has been used to provide multi-year money, so, as opposed to 12-month money that would be in, a discretion, you know, an annual appropriations Act. And then, the other… Huge difference is that The Annual Appropriations Acts have what are called general provisions. These are administrative provisions that, place limits on how the annual acts, money can be spent. And they also include very detailed committee report instructions. So in addition to the text of the statute, you also have thousands, tens of thousands of instructions, for the agency about how to implement the funding.
Matthew Glassman: Yeah, let’s…
Matthew Glassman: Let’s take… let’s take these one at a time, because I think both of these… both of these are important. The multi-year… issue is that the typical Appropriations Act coming out of the Appropriations Committee is one-year money, and in federal law, if it doesn’t say how long the money’s for, it’s for a year, and the acts are generally for a year. Sometimes there’ll be two-year money in there, or five-year money if there’s longer.
Kevin McNellis: for some projects.
Matthew Glassman: know your money occasionally. Sometimes you’ll give someone just until expended, but typically it’s a year, and that means the president puts in a budget request after compiling the agencies, they get the money for a year, and then they start all over, and they ask for money the next year, and so they have to keep coming back and begging for more. Now, the reconciliation bills. typically might do more than that, and so the current CBP and ICE money that’s being considered, how many years is that set for?
Kevin McNellis: That, I believe is, 4-year money, I mean, or three-year money, it would go through the end of the Trump administration.
Matthew Glassman: Right, so part of the point here is not just to do this by a party-line vote, right, so that you don’t need to compromise with the Democrats in this case to get this through the Senate, but it’s also to lock the money in. in a way that even a Democratic victory in the 2026 elections of both chambers of Congress wouldn’t necessarily be able to undo this, or have to deal with it, right? You would just get the money now. I think… I think people notice this in, sort of, the, big, beautiful bill. When they said, wow, this is a ton of money for… DHS, right, or immigration enforcement, you know, way more money than they would normally get. But now we’re talking about doing, sort of, their annual budgeting, but on big chunk bases in the beginning of a Congress. And this sort of implies that the second Congress of any presidency, if you were to lose the House, for instance, which is a normal occurrence for any president, right? The last six presidencies have started with unified government, and I believe… all 6 of them? No, not Bush, I guess, but 5 of them have lost one chamber or the other at the midterms. So this would lock in and defeat, sort of, the… the sort of political blowback to the presidency here by getting the appropriations for these things quicker.
Matthew Glassman: The second issue that you bring up is the general provisions. I’m going to read… a lot of people aren’t familiar with these, but these are all over appropriations bills. I… sometimes they’re called limitation riders or things like that, but they always come in the same form. And it’s… it’s how you make policy in an appropriations bill in sort of the strongest way. Because if you don’t want to appropriate money for something, one wimpy way to do it is to not give them any money.
Matthew Glassman: But the stronger way to do it is to explicitly give them zero. Right? Because presidents and agencies, they can find ways to move money around, but if you explicitly give them zero, then they can’t do it. So I’m just reading from the last DHS bill. none of the funds made available in this act may be used to reimburse any federal department or agency for its participation in a national special security event. There you go.
Matthew Glassman: We gave you money, but you can’t use it for this. Where this hits the road is much more sort of important stuff. Like, here’s one that they’ve been fighting over now for the better part of a year. None of the funds made available to DHS by this act may be used to prevent any of the following persons from entering for conducting oversight, any facility used to hold, detain, or otherwise house aliens, right? And that includes a member of Congress and the list. And that was in the last DHS Appropriations Act.
Matthew Glassman: That wasn’t in… the big, beautiful bill, and therefore DHS was claiming they didn’t have to let members into ICE detention facilities, because they were claiming that the money they were using to run those facilities was all coming from the big, beautiful bill in the reconciliation process, and wasn’t coming through the annual act. And so my… the courts are arguing over that, because it does kind of seem like bullshit. It seems very hard to run an ICE facility just on reconciliation money, but they’re claiming it, right? But it does point to the bigger problem here.
Matthew Glassman: And so I want to ask you sort of pers… this is where I… this is where we are now past my knowledge and into yours, exclusively, so now I’m asking questions that I do not have the answers to. Is the reason this stuff isn’t going into reconciliation because just it’s a 50-vote threshold and the Republicans don’t want it in there? Or is it not possible to get these sorts of riders into a reconciliation bill? Would they be potentially not eligible to be there because of the limitations on what you can do in reconciliation?
Matthew Glassman: Yeah.
Kevin McNellis: That’s a really great question that’s, been on my mind a lot recently, and I think the honest answer is, it’s probably a combination of both, but we don’t fully yet know. We have some, like, limited evidence of, from OBA, where… they… the Republican majority was trying to include reporting requirements, other provisions that you would normally see in an annual appropriations Act, and, that weren’t ultimately in the final bill. One was ruled, one of the reporting requirements, there was a parliamentarian decision on the Byrd Rule, which we can get into, but, you know, it’s a limit on reconciliation. So we have some… we have some evidence that there’s some procedural constraints, but I think ultimately it’s going to be a mixture of, well, what does the majority want? What are the negotiations within each caucus? Where do they land? And what was… surprising to me when I saw the bill text was… Sort of, there was not many, what we would think riders or administrative provisions, or there were a few, but there was not, an attempt to bring all of the, you know, it didn’t… there was definitely not an attempt to bring all of the full suite of riders that are in ICE’s annual appropriations bill into the Reconciliation Act. So, whether that’s a Bird Rule issue, a procedural issue, or a political issue, probably from both columns, probably a mixture of both, But that is a huge open question, right? And that gets to the difference between a supplemental and an annual appropriation going through reconciliation. When you have ARP, IRA, Providing supplemental appropriations, you don’t necessarily have the majority trying to bring in general provisions, OBA was different. It was more focused on, agency… core agency functions. The majority tried to bring in some provisions. It looked like, you know, there’s one that tripped… got tripped up on procedure, and then others, it looked like maybe it was just political negotiation, they fell out. But there were still a handful included. So, But generally speaking, this is a huge question, open question that Congress is grappling with, and in my mind, Congress’s reach has exceeded its grasp. It’s very comfortable, obviously appropriating very large dollar amounts through this process, but the oversight mechanisms have not caught up to the new procedures that they’re using.
Matthew Glassman: Yeah. I want to be very clear about this, that we’re now talking about appropriating the actual agency functions, the entire appropriation for things like ICE and CBP, without the myriad of limitation provisions and committee report language and strict requirements that are typically in an annual bill. So we’re increasing the length Of the duration of these appropriations, but stripping them of the general provisions that constrain, sort of, the use of the money, typically.
Matthew Glassman: can be added retrospectively later, in theory. You can put constraints on previously appropriated money, but it seems to me that this is a… huge hole in what’s going on here. And I don’t want people to get the sense that there’s just, like, a couple limitations put on, sort of, annual appropriations. If you look through the annual appropriations bills, there are hundreds of limitation provisions that direct how this money is used in law.
Matthew Glassman: On top of the pile of things that are just in the committee reports that further direct how the money should be spent, and are, you know, held together not by law, but by sort of political force of the committee’s going to consider your request next year, you turn it into a situation where there’s no committee report, where there’s no general provisions. Oh, and by the way, the committee’s not going to consider your request ever again on the appropriations side, and on the reconciliation side, they’re not going to consider it for four years maybe, and you really have sort of a… sort of a floodgate turning on, a huge faucet turning on of money that is much. less controlled by the legislature, and much more open-ended to the executive. And I don’t want people to think that, like. this is some right-wing conspiracy. The Democrats, you know, have been doing a little bit of this too, obviously, with AARP and IRA, they sort of brought this in, but I would fully expect them to take advantage of this in 2029 if they had a unified government as well. This is the kind of thing that I think parties are going to learn very quickly, that they can do.
Matthew Glassman: And so now, you know, I guess the next question is to talk about, sort of. the Byrd Rule, because I think a lot of people, sort of, if they’re… if they’re watching, sort of, what’s going on, they see this weird stuff where the parliamentarian gets to tell you what’s in a reconciliation bill and what’s not, and we see that some of the stuff that is going in for CBP and ICE, the first attempt of the Republicans to write that, the parliamentarians said no, and now, you know.
Matthew Glassman: Trump’s ballroom security is coming into question. So, if you could just succinctly tell us.
Kevin McNellis: Sure.
Matthew Glassman: And, you know, where it came from, and why it matters now.
Kevin McNellis: Yeah, so, the Byrd Rule, is named after Senator Robert Byrd, and it was… developed, like I said, back in the 80s initially, because, when Congress realized the power of reconciliation and started using it, to pass significant legislation. The concern was that it was being, loaded up, right? They became kind of Christmas tree bills, these huge omnibus bills that included a bunch of non… primarily non-budgetary items that would be subject to a filibuster and debate, but because they’re in a reconciliation bill, they were not. So, the Senate developed the Byrd Rule, which has 6 tests of, extraneous, what are called extraneous provisions. So these are ones that don’t have any budgetary effect. They don’t comply with the budget, resolutions instructions to a committee. The… the provision is outside the jurisdiction of the instructed committee. The most contentious one is, whether policies’ budgetary effects are merely incidental to its substantive policy changes. And then, whether it increases, deficits outside of the… it’s called the budget window, the time period set by the budget resolution, and then whether it affects, the old age and survivor benefits, what we think of core Social Security. program, the key other thing to realize about the bird rule is that it’s a surgical, point of order, so senators can raise a point of order saying something violates the Byrd Rule. When they do that, they are literally objecting to you know, it can be a phrase, it can be a word, it can be a whole provision, it can be an entire title. It’s up to the senator raising the objection, but that’s very different than a lot of other point of orders, where you’re objecting to the entire measure, or the entire, you know, bill as a whole. And so, you can think of it as… it’s kind of like a… like an x-ray, almost, or… that’s not the exact right image, but it’s very surgical, so you… it’s… it can strip out a bunch of provisions, but then the bill as a whole continues to be considered. And so… Why is this important? Basically, as reconciliation has become a vehicle for the most, contentious bills, the minority party is going to use the Byrd Rule, very aggressively, to the point where, you know, the bill title and the bill, table of contents gets stripped because it doesn’t have a budgetary effect, right? Like, that’s very common in every reconciliation bill now. So, basically, every provision is going to be objected to if there’s a possible verb rule objection, and so… where we are in the process right now, people are meeting with the parliamentarian, both sides are meeting with the parliamentarian to get the parliamentarian’s judgment about each, provision, and whether it violates the Byrd Rule, because they want to address those issues now, before the bill gets on the floor and could be possibly subject To a point of order on the floor.
Matthew Glassman: Have you ever been in one of these meetings? I’ve never been in one of these meetings with the parliamentarian over the Byrd Rule, but they are fantastical, and anyone who has been there and tells me about them, it sounds like you’re almost at, like, a trial, where you have both sides presenting their case, and then the parliamentarian sits there like a judge, and tells you. Have you been in one of these meetings?
Kevin McNellis: No, I have not been in one of those meetings, but I’ve been sort of adjacent to them, in multiple circumstances.
Matthew Glassman: And it reminded people that the parliamentarian doesn’t have any actual authority over these things. What she’s doing in these cases is telling people how she will advise the chair, and that turns into actual power, because a majority of senators are sort of on the record and going to back the parliamentarian’s interpretation of these things, if push came to shove in the Senate. And so, the parliamentarian does not have any authority in the Senate. She advised the chair, but given that a majority of senators are going to back her advice, she essentially does have the power, to make these decisions, and so everyone essentially defers to her, which has some benefits. But the Senate could sort of overrule the parliamentarian, but that opens up an entire different can of worms that maybe is on episode 2 here. And so…
Matthew Glassman: What happened this week is that the ICE and CBP funding did lose a lot of stuff to parliamentarian rulings, and which branch of the bird rule test tree were those struck down on?
Kevin McNellis: So… we’re still… or I… I am still trying to figure that out. From what we know, comes from the Senate Budget Committee’s ranking member, who has put out press releases and then other press coverage, about what what decisions were made in the meeting with the parliamentarian, and the issues right now appear primarily jurisdictional, as opposed to, budget, you know, whether there’s a budgetary effect or whether it’s merely… there also appears some merely incidental, whether the policy or the funding has a larger policy effect than it does a budgetary effect. But really, like, for the ballroom, specifically. There appears to be a jurisdictional issue, because, environmental… Environment and Public Works, has jurisdiction over DC buildings, and… the current, ballroom text is in the Judiciary Committee’s jurisdiction, and they’re funding the Secret Service for these projects, so it seems, from what we know right now. that there’s an issue with that jurisdictional boundary between what is Secret Service security funding versus a construction project for a public building in DC. I think we’re still waiting, as of this recording, for new text to emerge. what I’ve seen reported is that, Republican staff, have… have said these issues are, fixable, with redrafting, and so… and don’t appear to be a serious concern, at least from what I’ve seen reported. But nevertheless, that seems to be where the issues are at the moment. It’s primarily on the jurisdictional test.
Matthew Glassman: Yeah. So the other feature… so, you know, one thing that I think opens the reconciliation process to criticism over this is that you end up now having a Senate where it’s majoritarian at times for budget-related things, but always has a filibuster for non-budget-related things. So if you’re interested in legislation on abortion, or gun control, or other things that are mostly social issues, I think is the basket you push them in, those things are always going to require super majorities, but if you want to do things that are related to the budget, it’s sort of prizes prioritizes them as something that can be done, on the fast track by a majority vote.
Matthew Glassman: The other feature of the reconciliation process and the budget resolution process is that it has these things called Voteramas, which are basically an opportunity for people to offer unlimited amendments. They never seem to… end in sort of significant amendments being adopted, however, though. What constrains… you would think, like, oh, we can offer unlimited amendments that the Democrats would have all sorts of wonderful amendments that they could make right here, starting with, sort of, just stripping the ballroom funding out. What constrains, sort of, the amendment process in the voterama over these reconciliation bills? How come the Democrats can’t just come in here and now try to get all the… all the ARP funding put back in, or reverse everything done in OBBA in this sort of reconciliation in Voterama? Is it just political?
Kevin McNellis: Just a…
Matthew Glassman: They wouldn’t win, or are there actual procedural constraints here?
Kevin McNellis: Again, it’s… I think it’s a mixture. So, the Voterama is, is created because there’s statutory time limits on, the debate in the Senate. But not the full consideration, of the reconciliation legislation, which is a fine distinction, but Basically, what it creates is a situation where, There’s no… Final limit on… the consideration of the bill as a whole, so then you can… as you keep offering amendments, you eventually hit the time cap, and then senators will go into a unanimous consent to then discharge all of the remaining pending amendments. in addition to those statutory limits, then you just have, like, germaneness issues, right? You have to offer a germane amendment So then that’s also going to be a function of what’s included in the bill. So… Those are the two… primary, constraints, and then there’s, I think, a larger phenomenon where, one of my projects was… I actually was… got very interested in this and sort of figured… actually tried to add up, sort of, the time it would take to get through Votoramas. And… and Voteramas have become less, less, Rama-y, as the part… as the process has become more partisan, and so you’re… you’re generally seeing, you know, there’s… there’s not… they’re not as long because people are offering fewer amendments, and I think it, I don’t necessarily have, like, a grand unified theory for why that is, but nevertheless, it does seem to not… it seems rare when an amendment, breaks through, and generates, significant attention or notice, especially when you’re in a situation where you’re offering amendments usually for 2 minutes at a time, where each side gets one minute to argue for and against it. It just, I think, sort of dilutes the… the ability to focus on any one particular issue, right? If you’re just chugging through dozens of amendments.
Matthew Glassman: I want to turn to, sort of, the political implications of all this now, which I think perhaps is the most important piece here, because one question is, is this going to, sort of. undo the traditional appropriations process. If… if majorities, if unified majorities can just say, well, we’ll bargain with you for a little while, but if you don’t do what we like, we’re just going to put this stuff in a reconciliation bill, like, does that derail? Are we gonna end up in a situation where, yeah, there’s still compromises in the annual appropriations process, and we do some stuff there, but the really partisan stuff now is just going to be moved over to reconciliation? Like, do you… Do you expect that to be what happens going forward here in this process?
Kevin McNellis: I don’t think I have… strong expectations, necessarily, in terms of predictions, other than this is a very open question, and it’s opened up a new field of potential action, and negotiation. So… I’m… Just in the current debate. For example, I’m very interested to see what happens, with the DHS Fiscal year 27 appropriation bill that is being developed in the House right now, and is going to be marked up next month by the House Appropriations Committee. The DHS subcommittee chair has said that he wants to bring oversight provisions into that bill that would affect what’s being appropriated in the reconciliation process. And so… I think you could end up in a world where… the Appropriations Committee’s workload changes, and that they are responsible for overseeing both the annual bills and the funding that’s in, whatever funding ends up getting in the reconciliation bill. I think… On top of that, I think there’s an interesting example from the Inflation Reduction Act and the IRS funding. So that funding became subject to a series of rescissions. Over the next several years after the funding was, enacted, and it’s basically been almost completely rescinded, and so… Right, like… in addition. Congress is always making fiscal decisions every year, right? Like, you’re going to have deadlines in terms of the annual bill. all the annual bills expiring on September 30th, you’re likely going to have multiple CR votes as they sort of, you know, try to negotiate the next round of appropriations bills. You have other must-pass pieces of legislation, and so I think when you see those must-pass deadlines, or those really important deadlines, I think this is just gonna be another dimension along which there’s going to be a negotiation. And so… I think it’s too early to tell or make some, far-reaching prediction, necessarily, about how this is going to play out, other than it’s going to be a very, I think, active site of negotiation, and conflict going forward. But I think, from an institutional perspective, setting aside, you know, partisan politics, I think it’s really important for Congress to start grappling with these questions, developing… well, they’re grappling with these questions, that’s clear. They need to develop, I think, workable solutions, or workable answers to these questions. because otherwise, I think it’s just a… you run the risk of, Congress not fulfilling fully its constitutional spending responsibilities. You know, I think you mentioned the court case. With the visitation rights, and how the administration argued that they were using the reconciliation funding and, you know, and the lack of riders on that funding. To prevent members of Congress from visiting. And I think that cuts, you know, I don’t think there’s a better example that cuts exactly to, sort of, Congress’s own power, right? And you… I think… it’s incumbent on Congress to develop solutions here so that it still has its… Has an ability to oversee, understand, and ensure that the funding is being used in ways that represent the members of Congress and the people they represent, and isn’t just a, sort of a multi-year, check that’s handed over, to the administration, or any administration, right?
Matthew Glassman: Yeah, I think… I mean, I think it is interesting that, you know, you move the CBP and ICE funding over to reconciliation bills, and you don’t have, sort of, the limitations of the general provisions going with them, and then you might have thought in your head, like, oh, well, the reason those general provisions get in and those limitations are there is because the minority on the Appropriations Committee always had a say in this, and so it was part of the compromise, but we see majority members of the appropriations subcommittees looking to put those riders in, and that if you did have sort of a pure majoritarian appropriations Committee, imagine the filibuster’s gone, it’s not as if… sort of the Republican powers that be right now at the Appropriations Committee want sort of a… complete lack of these general provisions on CBP and ICE funding. In fact, we’re getting the opposite from, sort of, the chairs there, who seem to think that’s important. So I think that is sort of a break on the idea that the point here is to get money for long term that has no strings attached, that the president can do whatever he wants. There is still an appetite in Congress for the oversight, it seems, even from the majority party.
Kevin McNellis: Yeah, just one other interesting aspect on that was the bill that passed the House, the DHS bill that passed the House, had a very interesting new general provision that would have required DHS to submit very detailed obligation and spending plans for all of its funding, including the OBA funding. And so I think that’s a very clear signal that the major… the majority in the House was very… was comfortable saying, yeah, we need to… we need this information. And so I think it’s not strictly a partisan story, right? Like, I think there’s, sort of a sincere, recognition that, you know, the current processes are not sufficient to keep Congress informed so that it can make, you know, the fully informed Appropriations and budget decisions.
Matthew Glassman: I mean, this has always been my view. I mean, I think there’s people out there, so the appropriations process is bipartisan because there’s two parties involved, but I’ve always held the view that the appropriators themselves, the types of people in the appropriations committees. tend to be a certain type of compromiser anyway, and that’s part because they have to, but the type of people attracted to the Appropriations Committees tend not to be… the partisan flamethrowers. Even people who are quite ideologically conservative or liberal, like Mr. Cole and Ms. DeLauro, who are the chair and ranking member in the House, that they are sort of get-to-yes via compromised people, which is very natural in appropriations. So none of this surprises me, but what worries me is that people like Mr. Cole and Ms. DeLauro are going to lose power as this politics drives forward to people who don’t have that mindset, right? Who really are sort of partisan warriors. Completely, right? Like, I don’t completely cut out, but that worries me to move so much spending out of the hands of people I generally trust, which is the appropriators on either side of the aisle.
Kevin McNellis: Well, yeah, but I think there’s maybe a scenario where the reconciliation bill doesn’t necessarily include the general provisions, but maybe the annual appropriations bill, which is running on a different track and, different… level of salience, might include the provisions you would need that maybe, aren’t included in the reconciliation bill. So I think I think it’s too soon to tell, but… the idea… like, initially, when I… when we were heading into this debate, I was thinking, like. oh, the key question is going to be, how are you going to fit the general provisions into a reconciliation bill, to comply with the Byrd Rule? And we’re not really in that world, and so it seems like if they happen, it’s going to happen through some other legislative vehicle.
Matthew Glassman: Yeah, I mean, at the bare minimum, we’re going to get a situation where we have a reconciliation bill passed that is immediately providing funding.
Matthew Glassman: But general provisions that don’t exist until at least when? I don’t know, right? Right, exactly. When the CR passes in September.
Kevin McNellis: Yeah, and so I think that’s really important. So, and it’s still such a strange situation, I’m trying to get my mind around it fully, is that… so CBP did receive some funding in the DHS bill that passed. It was lower, but there’s… they still have some funding that’s fully ridered. the bill that did pass has a lot, you know, of the sort of typical administrative riders. What didn’t happen was or ICE was not included, so now you have this situation where I’m still not exactly sure what’s going on with ICE, necessarily, but, like, they are sort of operating in a space that, as far as I know, in the modern appropriations process, hasn’t really happened, Where they go from having an annual bill to not having an annual bill, and then they’re just going to be relying on these, what are functionally. You know, as the text is written, essentially supplemental appropriations that don’t have The administrative limitations, or the committee report instructions. And so, yeah, we’re… until the 27 annual bill passes, we are going to be in a scenario where they’re going to have a lot fewer restrictions on… on that funding.
Matthew Glassman: On that point, the other thing that… and again, this is beyond my, sort of. knowledge base is reconciliation bills aren’t written like appropriations bills, in the sense that I don’t see, sort of, the traditional accounts and appropriating into the accounts for these things. It’s sort of functional into, sort of, particular activities. And so, when we have a, you know, I think… I think I think ICE only has 2 accounts. It has, like, sort of just a general account and a procurement account, and so… but in the bigger picture, how is this stuff sort of crosswalked? So we do the reconciliation process, and we have 19 different things we’re giving money to to these.
Kevin McNellis: Yeah.
Matthew Glassman: How… who and how is that stuff getting translated into actual appropriations accounts over at Treasury for the purpose of tracking, sort of, the inflows and outflows of these things?
Kevin McNellis: Yeah, that’s a really great question. I’ve been doing a lot of analysis of, ICE and CBB’s funding, trying to figure out, exactly what’s going on, and so I’ve been sort of spending a lot of time with the OMB and, Treasury and USAspending.gov’s data. And so, what I know about the OBA funding is that you have these overarching accounts, right? There’s two of them, like you said, the operations and support, and then the construction account. And the OBA funding’s been appropriate… been… Designated within those accounts, and then… within those general accounts, you have what are called Treasury accounts, which then are broken out by periods of availability. And so right now, the OBA funding is in a separate Treasury account within the general account, with its own period of availability, so it is functionally separated, or at least on the accounting basis, it’s separated from the annual funding. But it appears that OMB has assigned that to the traditional accounts, even though in the statutory text of the law it doesn’t say for this account. But I think that’s a really, important, Thing to note is that appropriations bills are… written differently, and it’s kind of remarkable. They’re essentially written in the same format they were in 1789. You can go back and look at, like, the first appropriations bill, and it’s essentially the same format. And… they… I think it’s possible that they could have used that same format in a reconciliation bill, but they chose not to, and so… I think…
Matthew Glassman: In theory, that could plausibly be in the same account at Treasury, but have different general provisions limiting the use of their actual monies? Is that right? I mean, it’s… have different provisions limiting them. It seems like they have to be in somehow functionally different accounts, at least if you’re gonna claim. You’re using… at least if the administration’s gonna claim that it’s using money that… that does not…
Kevin McNellis: Isn’t required.
Matthew Glassman: oh, the general vision, it’s gotta be, like, visible somehow, right? Or, I mean, maybe not, right? But, like, it should be visible somehow, right?
Kevin McNellis: Right, so I think it’s… in the very detailed accounts, it is being segregated, but it’s still being assigned to the overall general account. But I think one of the key, The general provisions for every appropriations bill is the transfer and reprogramming. authority, and that is very specifically tied to accounts. And sort of people who aren’t familiar, transfers are when you move money between accounts, and reprogramming is when you decide to spend money differently within accounts. And so, there are… there are no transfer and reprogramming provisions in the Reconciliation Act, so that’s another way in which there’s just gonna be greater degrees of freedom for the administration to decide how it wants to use those funds that, if it were in an annual appropriations Act. There would be, strict limits, or stricter limits, and then also usually notification requirements, so the appropriators would need to receive notice before, funding decision, or, you know, transfer or reprogramming decisions were made.
Matthew Glassman: Well, I wanted to turn, maybe to wrap up here, to another piece you wrote that was excellent, that you wrote with, Scott Levy, about sort of the Army Clause limitation in the Constitution, because we’re talking about providing multiple-year money here, for your money in some cases, or through the end of the Trump administration, to CBP and ICE,
Matthew Glassman: But the Constitution has a procurement provision to many people that limits, sort of, appropriations for the army to two years, not to the Navy, just to the Army, and perhaps we can talk about the British origins of this, but you wrote a piece that I very much enjoyed, and we’ll link to all this in the show notes, arguing that money for CBP and ICE plausibly should be restricted on the same basis to no long… more than a two-year appropriation. You want to just quickly walk us through that argument?
Kevin McNellis: Sure. So, the Constitution, has very few instructions to Congress about appropriations. It says all funding must be appropriated by law, but other than, sort of, the general quorum requirements for the House and Senate. there aren’t really any other restrictions except that you cannot appropriate funding for more than 2 years for the support of armies. And the argument that Scott and I were making in the piece was The concern the founders had, was that this limitation was important because we… we want to ensure that… the people represented through Congress always have a say about the funding for armies, right? And two years corresponds to the, you know, the term… the… the life of the House, you know, the Senate’s a continuing body, so it’s on a different time scale, but you want every Congress, to have the opportunity to have a choice in how the military is being funded, with the concern that, you know, a president could use the army in ways that would be a threat to the freedoms protected by the Constitution. Our argument is that the Senate should adopt a rule, or Congress should adopt a rule. Actually, the Senate should adopt a rule that, would allow for a point of order Similar to the Byrd Rule, a surgical point of order that would allow members to object to funding, that supports, sort of federal coercive force, or agencies that have coercive force, that would be, you know, in addition to the Army, you know, law enforcement agencies that have the ability to use the threat of coercion to accomplish their goals. And so… our concern is that OBA had multi-year Department of Defense funding, it has the multi-year ICE and CBP funding, and Congress enacted this, without apparently discussing this constitutional question. And so, and we’re seeing the consequences of this, right? And we’re seeing how it’s empowered a presidential administration. And our argument is, to prevent this from happening again, Congress should adopt this point of order to enforce the constitutional, requirement. And so, we think the benefit of this is because it’s a surgical point of order, it would allow any member of the Senate to raise the objection and force the Senate to at least debate it, and consider it fully, in a way that was not done during the consideration of MOVA.
Matthew Glassman: Yeah, so, I mean, you could have… and I’m sure people will, have a spirited argument about whether federal law enforcement should qualify in certain situations or not as military or army under this clause, but that doesn’t matter, because Congress could decide for itself that, from their point of view, appropriating, it does apply, and so it wouldn’t be a separate powers battle, where someone’s in a courtroom arguing that this violates, sort of, the two-year clause. Congress could just adopt and say. all federal law enforcement falls in the Army Clause, and therefore we’re going to create a point of order that limits even FBI funding, for instance, to be no more than two years, or anything else they wanted, right? Congress could do that with anything, but I thought it was an excellent argument, because it skirts this idea that you have to have a battle with the president over this. You don’t, right? Congress is in control of the funding, and if Congress doesn’t want to do two-year funding for federal law enforcement, because they think that is unwise and, you know, conforms with the Constitution’s clause. They can just do it themselves, which I… it’s an excellent paper, I will link to it. You know, a paper like this is always good when you happen to be right, and you do happen to be correct here in your analysis, I think, and so that certainly helps your case. It can get tricky trying to distinguish, sort of, the FBI from ice from uniformed… actual standing army in the United States, but I think it ultimately doesn’t matter as a separation of powers issue, because Congress probably, in my mind, should do less multi-year appropriating than they do anyway, and this would be an excellent place to start, and an obvious place to start.
Kevin McNellis: And I think the rest of the pieces is that we want Congress to develop this rule for itself, right? And not rely on the parliamentarian having to make the decision or a court to make the decision, but we think it’s incumbent on Congress to be proactive here and sort of set clear guidelines, in order to sort of, you know, enforce the constitutional requirement.
Matthew Glassman: This is probably a good place to stop, but is there… is there anything you wanted to get across, Kevin, that we didn’t cover, that is important that I may be ignorant of, or we just didn’t get a chance to get to?
Kevin McNellis: No, I think just in general, I would just sort of say, like. we’re living, obviously, in very interesting times, and these processes are changing, and I think these processes have changed multiple times in the past, right? Like, reconciliation has been completely transformed, since it was created, and… I think it’s just a very interesting time to be engaging with these issues and trying to figure out, sort of… New solutions, and, and, and how Congress is grappling with all these questions. I think it’s, just a very exciting time to try and be, investigating these issues and understanding what’s going on. And, my hope is that we can… analyze this from, like, it’s more of an institutional perspective, right? I think so much the day-to-day is tied up in, sort of, the… lack of a… for lack of a better term, the horse race, or the partisan, who’s up, who’s down, and I think these are structural issues, that… that Congress needs to deal with, and, like, there’s room for… everyone to be involved in that conversation, and it’s not just, the current fight that’s before us, or the current debate that’s before us. It’s, these are going to be open questions, you know, going forward for a long time.
Matthew Glassman: Thank you so much for taking the time to talk this through with me, and you will be coming back here. I have already booked you down for next year, and when we see the results.
Kevin McNellis: Okay.
Matthew Glassman: U.S. process, and we.
Kevin McNellis: Yeah.
Matthew Glassman: what happened to the CBP and ICE friending, but I really appreciate you coming on. Thanks so much.
Kevin McNellis: Okay, thank you, Matt, it was a pleasure.
