Congress enacts Budget Act of 1974, creating reconciliation procedure to enforce spending limits

Congress passed the Congressional Budget and Impoundment Control Act of 1974, establishing the Senate Budget Committee and creating the reconciliation procedure to align revenue and spending with budget resolutions. The law arose after President Nixon impounded funds appropriated by Congress, prompting lawmakers to reassert the power of the purse. Reconciliation was designed as a limited deficit-reduction tool, not a vehicle for major policy legislation.