Reconciliation
This is a process initiated by the annual budget resoluion, in which the
House and Senate agree to effect changes in existing law to modify entitlement
programs or tax policy. The term comes from the concept of reconciling current
law with the requirements of the budget resolution.
The instructions that are included in the budget resolution direct the appropriate
Congressional committees to make changes in their programs to bring about
the budget result required in the resolution. The products of the various
committees are then combined into a package, known as reconciliation, which
must be agreed to by the House and the Senate, and signed into law by the
President.