Vocabulary of the Week

So you’ve read the news. You think you have a handle on it. But then they throw some weird words at you that you only half understand.

We know what it’s like to be in the middle of a conversation, nodding along, pretending to grasp the full complexities of the concept before you. It’s how we feel about gluten. So we’re here to break down some of the commonly used words of the week so that you can better digest the news that features them.


The byproduct of a rule change that occurred in 1806, the filibuster is a procedural strategy that involves extending debate on an issue in order to prevent a measure from being brought up for a vote. A senator (or number of senators) may speak for as long as they please and on any topic they choose or offer a series of procedural motions to delay action until senators vote to invoke cloture — a vote (usually) by at least three-fifths of the Senate to place a time limit of 30 additional hours on consideration of the proposed measure.

The longest filibuster on record occurred during consideration of the Civil Rights Act of 1957 and lasted for 24 hours and 18 minutes. More recently, the filibuster has been deployed to delay votes on gun control legislation and the Supreme Court confirmation of Neil Gorsuch — filibusters which lasted for 14 hours 50 minutes and 15 hours 28 minutes, respectively. During the latter instance, Republicans ended up invoking “reform by ruling,” more commonly known as the “nuclear option” — a procedure that allows the Senate to override a standing rule by simple majority — eliminating the filibuster for Supreme Court nominees. The nuclear option had previously been used by Senate Democrats to eliminate the three-fifths rule for executive branch nominations and federal judicial appointments during the Obama administration.

The three-fifths rule, however, still stands for debates on legislation, which is why it is back in the news today. Now that Democrats hold the majority in the Senate (with Vice President Harris acting as the tiebreaker), some think it would be to their benefit to invoke the nuclear option and eliminate the legislative filibuster, in the interest of advancing their policy agenda. But this decision would not be without risk for Democrats, as Republicans would be able to use it to their advantage in the future, should they regain the majority (not exactly a difficult feat, given the current party makeup). As a result, Democrats like Sens. Joe Manchin and Kyrsten Sinema have publicly expressed opposition to its elimination, and without a unified front amongst its 50 senators, Senate Democrats have little chance of eliminating it.

Budget Resolution

A budget resolution is a form of concurrent resolution, which sets forth the congressional budget; establishes various budget totals, allocations, and entitlements; and may include reconciliation instructions to designated House or Senate committees.

Budget resolutions, while binding to Congress, do not have the force of law, and no new spending is authorized until appropriation bills are enacted.


Established by the Congressional Budget Act of 1974, the reconciliation process allows Congress to change existing laws to achieve specified changes in spending and circumvents the filibuster by allowing measures to pass on the vote of a simple majority.

Republicans recently used the reconciliation process to pass the tax cuts of fiscal year 2018, and the procedure is back in the news today, thanks to Biden’s $1.9 trillion stimulus package. The budget resolutions passed by both the House and the Senate this week include funds for vaccine production and distribution, coronavirus testing, emergency unemployment benefits, aid to state and local governments, tax credits, and stimulus checks — all of which necessarily affect federal spending and are, therefore, eligible for reconciliation.

The House first passed their budget resolution on Wednesday, sending it on to the Senate. The Senate then engaged in an all-night vote-a-rama prior to their final vote — a vote in which an amended version of the resolution ultimately passed and was, thereby, returned to the House for a vote, where it proceeded to pass, too.

The adoption by both chambers of Congress officially kicks off the reconciliation process, where changes in spending can be achieved, without threat of filibuster, by a simple majority vote.


A vote-a-rama is a series of stacked votes in short succession on amendments offered during the budget process, intended to place political pressure on the majority for trying to pass (what the minority considers to be) controversial legislation.

Thursday night’s vote-a-rama lasted a grand total of 15 hours and saw 800 amendments drafted and 41 votes, some of which failed and some of which were approved with bipartisan support.

With the budget resolution as a blueprint, committees can now begin formulating a reconciliation bill, the final version of which will be subject to an additional 20 hours of debate and yet another vote-a-rama, before it receives a vote in both chambers of Congress.

Shorts and Short Squeezes

You may be following the GameStop saga, or you may not be, but chances are, you’ve heard a lot about shorts and short squeezes these past two weeks.

But what are they?

So, say I’m your broker (I know, I know, how many career changes can one person undergo?).

You borrow shares of a stock from me, anticipating that the price of said shares is about to go down.

I may lend them to you out of my own inventory, another broker’s inventory, or from another client that is willing to lend, but whatever the vehicle for the loan, you must ultimately return the shares to me within a specified period of time.

You then sell those shares, hoping that the price will go down.

If the price does go down, you are able to buy them back at a lower price than you sold them, pocketing the difference as profit (minus margin interest and/or any dividends that were paid out while the shares were on loan). If the price goes up, however, you are still required to purchase and return the shares, meaning that you are now operating at a loss.

In simpler terms? You borrow a single share of a stock from me, which you sell for $10. The share price then falls, and you are able to repurchase the share at a cost of $7. Excluding interest and dividends, you’ve profited $3 on the short. But imagine that, instead of falling to $7, the price rose to $13. Now you’re required to buy it back at a higher price point than you sold it, resulting in a loss.

That, in short, is what happened with GameStop (pun definitely intended).

Hedge funds bet that GameStop stocks were due for a loss and chose to go short, but instead, members of the WallStreetBets subreddit bought the heavily shorted shares in large numbers, causing the value to rise and forcing short-sellers to buy back shares to cover their position, which only served to drive the stock higher.

This is called a short squeeze and resulted in billions of dollars in losses for hedge funds, in what was the David vs. Jordan Belfort of financial matchups.

That’s all for now, folks. If there’s a term that you’d like to see covered in the future, feel free to drop it in the comments below. Enjoy the rest of your weekend!

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