I was working on a diary yesterday about the reconciliation process, but wasn’t sure I had it quite right. Today's Talking Points Memo has a story that confirms my understanding of the process and the procedural challenges it presents.
It’s not that it can’t be done, but it’s unlikely to be done immediately as some bloggers seem to think.
Plan B is our best option. I think we can get there. In fact, I am sure we will, but it won't be this week or next or probably next month. More below.
The Budget Process
What got me into this was realizing that this time last week Obama and Congressional Democrats were putting in 18-hour days to figure out how to get health care legislation enacted in the short-run. They are now going to abandon a year’s work? I don't think so.
All of us, of course, after the Massachusetts election turned our attention to reconciliation. But reconciliation is not a stand-alone process. It’s not something that can just be ordered up and passed tomorrow to take care of whatever is on our mind today – health care, financing the military, creating a jobs bill, or whatever. It is part of a complicated budget process and generally covers the entire federal budget. Could we enact a "reconciliation" bill immediately, as some seem to think? Conceivably, but as the TPM story mentioned in the introduction makes clear, it’s very hard. I’ll get to TPM later.
For a quick and dirty look at the budget process see Congressional Research Service on Congressional Budget.
Public Law 93-344, the Congressional Budget Act of 1974, established a budget process for Congress for the first time. It was intended to force Congress to create a budget and live within it. I join you in laughing at that, but that was the intent.
Reconciliation today is different from the concept contained in the 1974 legislation. The idea initially was that the Budget Committees in the House and Senate would create a budget resolution to establish budget ceilings by functional category (defense, health, education, labor, etc.) in the Spring. They would then let the appropriations committees do their work during the summer, and then "reconcile" the differences between the Spring budget and the work of the appropriations committees with another budget resolution in the Fall.
The second resolution has been abandoned in favor of reconciliation (if needed) in the Spring. As Congressional Reference Service budget experts Robert Keith and Bill Heniff, Jr. explain in Budget Reconciliation Process:
As originally framed, the 1974 act required the adoption of two budget resolutions each year. The first budget resolution, to be adopted in the spring, set advisory budget levels for the upcoming fiscal year. The second budget resolution, to be adopted on September 15, just before the start of the new fiscal year on October 1, set binding budget levels for the year. Reconciliation was established as an adjunct to the adoption of the second budget resolution.... Action on any required reconciliation legislation was expected to be completed by September 25. In the early 1980s, the House and Senate abandoned the practice of adopting a second budget resolution, choosing instead to adopt a single budget resolution in the spring of each year (although the schedule often slipped, sometimes markedly). This change in practice formally was incorporated into the 1974 act by the Balanced Budget and Emergency Deficit Control Act of 1985.
A lot of people in the 1970s worried that the CBA would undermine programs and committee prerogatives. And they were right. President Reagan used the process (and Spring reconciliation) to reshape government in his image overnight with his very first budget. He was the first to use the reconciliation provisions. But it’s also been used to more positive effect. President Clinton used it to create the budget and tax provisions that balanced the budget during his two terms.
Congress has sent the President 19 reconciliation acts over the years; 16 were signed into law and three were vetoed (and the vetoes not overridden).
Note that although the budget resolution is a creature of Congress and never becomes law, reconciliation acts change existing law and, therefore, need to become law themselves, requiring the signature of the President. Why doesn’t the budget resolution have the force of law? Because it’s a statement of Congressional intent (a resolution), which the President does not sign. Still, it defines Congressional priorities and binds Congressional committee action.
The budget resolution, the centerpiece of the congressional budget process, sets forth aggregate spending and revenue levels, and functional levels of spending, for the upcoming fiscal year and at least the following four fiscal years. As a concurrent resolution, it is not presented to the President for his signature, and, thus, does not become law. By setting forth a comprehensive statement of congressional priorities on budgetary matters, however, the budget resolution provides a framework for subsequent legislative action on the budget during each congressional session.
Budget Timelines
What are the budget timelines? And where does reconciliation fit into them?
Here are some target dates from James Saturno of the Congressional Research Service:
First Monday in February: The President is required by law to submit a comprehensive federal budget no later than this date. (This is the budget that presidents preview in the State of the Union). There’s nothing binding about this budget; it’s the President’s proposal and Congress can change it just about any way it chooses.
Congress is not bound by the President’s budget, and through its budget process may adopt budgetary legislation reflecting different priorities than the President’s.
February-March: House and Senate Budget committees hold hearings and receive estimates from other Congressional committees about spending and revenue projections.
April 15: Target date for budget resolution issued by House and Senate budget committees. This resolution is the key to the whole budget process:
No spending, revenue, or debt-limit legislation for the upcoming fiscal year may be considered before a budget resolution has been adopted unless a waiver of the rules is granted. However, the House may consider annual appropriations bills without a waiver after May 15 if a budget resolution has not been adopted by then.
The funds contemplated in the budget resolution are divvied up among functional categories and to the 13 appropriations subcommittees in the House and Senate. The committees, which then further subdivide the pot of money they receive among their subcommittees, have to live within their allocations:
The total budget authority and outlays set forth in the budget resolution are allocated to each House and Senate committee that has jurisdiction over specific spending legislation. Any legislation, or amendment, that would cause these committee allocations to be exceeded is prohibited. Finally, the House and Senate Appropriations Committees subdivide their allocations among their respective 13 subcommittees. A point of order may be raised against any appropriations act, or amendment, that would cause these subdivisions to be exceeded.
Reconciliation as part of the Budget Process
Where does reconciliation fit into this? According to Heniff reconciliation comes into play with the budget resolution. Without the budget resolution, there’s nothing to reconcile. As I read this, the thrust of the Congressional Budget Act favors April 15 as the date to develop reconciliation directions.
Congress may include reconciliation directives in a budget resolution in order to initiate necessary changes in revenue, direct spending, and debt-limit laws. Reconciliation directives instruct one or more committees to recommend legislative language necessary to achieve the levels of revenues, direct spending, and debt limit agreed to in the budget resolution. The legislative language recommended by committees is packaged by the House and Senate Budget Committees "without substantive revision" into one or more reconciliation bills.... Reconciliation legislation is considered under expedited procedures that limit debate and place restrictions on amendments.
The last sentence (above) limiting debate and amendments is what makes reconciliation such an attractive option around health care, but we need to tie it to a budget resolution, unlikely to be available in the short run.
The Byrd Amendment
Congress being Congress, its members, of course, liked to use reconciliation to write new legislation, whether it belonged in the budget or not. In 1985, Senator Robert Byrd of West Virginia set out to put a stop to that. What became known as the "Byrd Rule" in the Senate outlawed the practice of including extraneous provisions in reconciliation instructions. I take it that provisions with direct budgetary impact (e.g., changes in Medicare funding or providing relief so that low-income families could obtain insurance coverage) would easily pass muster under the the Byrd Rule. Less clear to me is how other significant policy issues (e.g., abortion coverage) could be included in reconciliation instructions, since some of them, no matter how important substantively, are unlikely to have a major budget impact one way or the other.
Here’s how CRS’s Robert Keith explains the issue in a paper on theThe Byrd Rule:
During the first several years’ experience with reconciliation, the legislation contained many provisions that were extraneous to the purpose of implementing budget resolution policies. The reconciliation submissions of committees included such things as provisions that had no budgetary effect, that increased spending or reduced revenues when the reconciliation instructions called for reduced spending or increased revenues, or that violated another committee’s jurisdiction. In 1985 and 1986, the Senate adopted the Byrd rule (named after its principal sponsor, Senator Robert C. Byrd) on a temporary basis as a means of curbing these practices. The Byrd rule has been extended and modified several times over the years. In 1990, the Byrd rule was incorporated into the Congressional Budget Act of 1974 as Section 313 and made permanent (2 U.S.C. 644). A Senator opposed to the inclusion of extraneous matter in reconciliation legislation may offer an amendment (or a motion to recommit the measure with instructions) that strikes such provisions from the legislation, or, under the Byrd rule, a Senator may raise a point of order against such matter.
Things said and unsaid
In the Democratic panic that followed last Tuesday’s debacle in Massachusetts both Obama and Rep. Barney Frank seemed to walk away from comprehensive health care reform that would provide essentially universal coverage. Frank seemed to throw the entire effort under the bus; President Obama spoke about finding common ground and passing a couple of modest improvements, with no mention of universal coverage. Both seem to have walked back from that. Frank later said he could get behind reconciliation, while Obama seems to be playing his cards close to his vest, while having his people say he's still committed to health care reform.
Obviously the situation is not ideal; the Republicans have used every advantage available to them under the rules to delay and obstruct the legislation, while throwing such a fog of falsehoods around it that the idea of "death panels" actually was taken seriously in some quarters. In the face of this onslaught, Democrats looked flat-footed.
But the situation is not necessarily all to the bad. Both houses have acted. There’s no short-term statute of limitations on either bill (except that they must be passed before this Congress ends at the end of the year and the closer the election gets, the more obstructive Republicans will become while Democrats look on nervously). There’s a window of a couple of weeks to gauge the public mood and present health care reform as something that responds to public anxiety about jobs, economic security, and fear of the future.
I think what was unsaid initially is that both of these men (and many other professional national legislators) understood immediately that the hope that still existed among Democrats just a week ago for fast-track passage of health care was doomed, for at least two reasons: (1) the dust had to settle over Massachusetts; and (2) reconciliation could not be used as an immediate fix. While many of us on Kos (including myself) were hoping for a fast-track reconciliation approach, they understood intuitively that if reconciliation were to be used, we need some more time to figure out how to get it done. They just didn’t verbalize that understanding.
What are the others saying? Reid has said very little.
Pelosi has said in effect, "make no mistake there will be a health care bill." But she has also said we don’t have the votes in the House at this time to pass the Senate bill. People should be able to walk and chew gum at the same time and read those statements together: We’ll get a health care bill, but we don’t have the votes today.
What I take to be key in Pelosi's statements is "at this time." Christina Bellantoni in Talking Points Memo reported a few days ago that House Democrats do not trust the White House or Senate Democrats to carry through on a promise that, if they enact the Senate bill forthwith "we’ll include the House fixes in a reconciliation bill." I can’t say I blame House Democrats. The President has been very quiescent on the nuts and bolts of health care – making bold statements, but from all the evidence we have providing very little White House muscle to move the thing along. Senate Democrats, meanwhile, dithered around so long that they lost their filibuster-proof majority.
The message from Pelosi seems to be: let’s get reconciliation instructions agreed to in the Senate and then the House will act to send a bill to the White House for signature.
It seems crystal clear to all thoughtful observers that Obama and the Democrats can’t afford to fail on health care. That’s not a realistic option. The right will beat them about the head for their failure and the base is likely to sit on its hands in November. David Plouffe, newly installed in the White House to think about elections laid special emphasis on the importance of succeeding on health care in an opinion piece published in Sunday’s Washington Post. It was the first imperative he mentioned and he emphasized what everyone knows: even if we don’t pass health care, Republicans will attack it as though it passed. Why take the abuse without the credit?
Pass a meaningful health insurance reform package without delay. Americans' health and our nation's long-term fiscal health depend on it. I know that the short-term politics are bad. It's a good plan that's become a demonized caricature. But politically speaking, if we do not pass it, the GOP will continue attacking the plan as if we did anyway, and voters will have no ability to measure its upside. If we do pass it, dozens of protections and benefits take effect this year. Parents won't have to worry their children will be denied coverage just because they have a preexisting condition. Workers won't have to worry that their coverage will be dropped because they get sick. Seniors will feel relief from prescription costs. Only if the plan becomes law will the American people see that all the scary things Sarah Palin and others have predicted -- such as the so-called death panels -- were baseless. We own the bill and the health-care votes. We need to get some of the upside. (P.S.: Health care is a jobs creator.)
The latest from Talking Points Memo
Josh Marshall’s Talking Points Memo seems to confirm the analysis above. According to Brian Beutler writing in TPM, Democrats are brainstorming a way to expedite reconciliation.
Nancy Pelosi, and Senate Majority Leader Harry Reid...know the House won't pass the Senate health care bill unless it can be sure the Senate will act on separate piece of legislation amending a number of its key provisions. And they know that many of these changes--particularly to the tax structure of the Senate bill--would likely only pass by circumventing a filibuster using the so-called budget reconciliation process.
The duo are working through a number of possibilities, including a new idea, floated by several House members, to expedite the reconciliation strategy. But, as always, nothing's as easy as it seems.
The problem procedurally is finding something to attach reconciliation to:
[S]aid a House Democratic aide. "We passed a student loan bill in the House. That's sitting over in the Senate. One idea that has been discussed is to, on that bill, amend it to address the concerns about the Senate [health care] bill, primarily the Cadillac tax, and the Nebraska [Medicaid] deal; have the Senate pass that under reconciliation, have that come back to us, we pass it, and we also vote on the Senate bill."
The big benefit, obviously, is that if the Senate acts first, the House doesn’t have to rely on Senate promises to know what the final bill will look like.
But of course, there's a procedural snag: Senate budget expert Marty Paone say that the student loan bill is not a revenue bill and therefore can’t be used for reconciliation:
"That bill is not a revenue bill, only came out of Ed and Labor committee so it can't be used for tax provisions," Paone emails. He adds, "[T]he rules prohibit taking up a bill and turning it into a reconciliation bill. It has to be one that has met the House reconciliation instructions from the outset."
Congressional budget experts are arguing the House has to act first and that it would be easier to proceed from a House reconciliation bill that incorporated essential financing changes (e.g., Nebraska) since Section 7 of the US Constitution provides that:
All bills for raising revenue shall originate in the House of Representatives; but the Senate may propose or concur with amendments as on other Bills.
Paone touches on the House’s revenue-initiation prerogative just in passing, but it’s a significant issue:
According to Paone, the House will have to act first. "I think the House will need to pass a reconciliation bill first with the [Nebraska] changes and other financing changes because some of them entail tax changes so it must originate with them. Then the Senate could act on it as a reconciliation bill needing only a majority vote. Ideally they negotiate all such changes ahead of time so the senate does not have to amend but rather just pass it and send to the President."
This "after you Gaston" business is infuriating, but the larger point of the latest Beutler story in TPM is the essential thing to bear in mind:
[T]hreading the procedural needle--which must be threaded if the Democrats are to resort to Plan B--is more difficult than it sounds.
Where does this leave us? Your guess is as good as mine, but my bets would be on the following:
- The White House and the House and Senate Democratic leadership are not going to give up on health care reform.
- Pelosi and Reid will figure out a strategy to avoid the procedural hurdles and get reconciliation instructions in place in advance of passage of an actual health care bill.
- Reid will be able to fend off the Senate’s normal devotion to pork, so that the final legislation becomes a bit cleaner. He can also proceed knowing he only needs 50 votes (because he can always count on Biden to break a tie if need be).
- Pelosi and Obama will be able to crack heads of reluctant liberals and Blue Dogs and encourage them to put party, principle and their own self-preservation ahead of posturing.
- Obama will be wearing the biggest grin you’ve ever seen when he signs this sucker into law.