July 3, 2012
For years, Republicans and Democrats have used an arcane budget rule known as reconciliation as a bulldozer of sorts to blast through threats of a filibuster and achieve major budget and tax measures. Reconciliation has been used more than 20 times to pass measures ranging from a sweeping welfare reform and children’s health insurance program to massive tax cuts in 2001 and 2003.
The Democrats used reconciliation again in March 2010, to amend the Affordable Care Act three days after the landmark legislation was passed by Congress and signed into law by President Obama. But until now, the rule was never envisioned as a legislative jackhammer to literally wipe out a major piece of legislation before it fully took effect. .
In the wake of the Supreme Court’s 5-to-4 ruling that validated the health care reform law largely by concluding that the penalty it would impose on people who refuse to buy insurance constituted a tax, enraged and galvanized Republicans are vowing to repeal the legislation any way they can.
Senate Minority Leader Mitch McConnell of Kentucky confirmed on Fox News Sunday that budget reconciliation would be the weapon of choice in killing off the health care reform law – provided, of course, the Republicans manage to unseat Obama, take back control of the Senate and retain control of the House in November. By employing this fast-track procedure, the party in power can pass major tax and budget legislation with a simple 51-vote majority, instead of the 60-vote super majority that’s typically needed to overcome a filibuster and get anything done in the Senate.
“Look, reconciliation is available because the Supreme Court has now declared [the penalty] a tax,” McConnell said. “They have unearthed the massive deception that was practiced by the president and the Democrats, constantly denying it was a tax.”
Budget reconciliation, a provision of the 1974 Congressional Budget Act, is designed to force committees to make changes in revenue or entitlement spending, such as Medicare and Medicaid. It was conceived by lawmakers as a way to bring down the deficit by easing the path for budget and tax deals.
The rules for budget reconciliation in the Senate restrict the procedure to provisions dealing with the budget. They also set strict protocols for consideration of the bills in both chambers. Under the procedures for reconciliation bills, debate in both houses is limited to 20 hours, and no Senate filibusters are allowed. The late Senator Robert Byrd (D-WV), the patriarch of the Senate and a master of its rules, helped design a set of six conditions under which any portion of a reconciliation measure could be deemed "extraneous" to the budget – neither adding to nor subtracting from the deficit – and could be removed unless it garnered at least 60 votes.
Yet Congress has employed reconciliation many times to make major policy shifts that went far afield of simple deficit reduction initiatives. A sharp break with past practice took place in 2001, when Congress used the budget maneuver to enact a large tax cut proposed by President George W. Bush that greatly increased federal deficits and debt. Prior to that, every major reconciliation package enacted into law reduced the deficit. In 2003, Congress used reconciliation to pass another round of deficit-boosting tax cuts.
PASSING THE HEALTH CARE BILL THROUGH RECONCILIATION
Democrats seized on the strategy again two years ago while trying to put together majorities in the House and Senate to pass Obama’s health care reform proposal. After a year of deliberation and wrangling, the Democratic-controlled House and Senate each passed a different version of health care reform in 2009. On November 7, the House passed its version of the bill on a 220-to-215 vote. On December 23, the Senate voted 60 to 39 to end debate on the bill, eliminating the possibility of a filibuster by opponents. The bill then passed on a party-line vote of 60 to 39 the next day.
For a variety of complex political reasons, the most viable option for the proponents of comprehensive reform was for the House to abandon its own health reform bill, and instead approve the Senate-passed bill. But in order to placate a number of House and Senate Democrats who had reluctantly backed the president on health care reform, the Democratic leadership agreed to pass separate legislation amending the Affordable Care Act to address those members’ grievances.
One amendment struck out a widely detested provision that would have provided a higher rate of Medicaid reimbursements for Nebraska – the so-called “Cornhusker Kickback” that was designed to win the support of Democratic senator Ben Nelson of Nebraska. Another amendment permitted dependent children through age 26 to be included on parents' plans.
But this time, the Democrats used reconciliation to pass the amendments. After Republican Scott Brown succeeded the late Democratic Sen. Edward M. Kennedy of Massachusetts, the Democrats could no longer count on a 60-vote majority, and turned to reconciliation as a safeguard. On March 26, 2010, the Senate approved the amendments, 56 to 43, and the House passed them, 220 to 2007.
The reconciliation tactic could now be used by the Republicans as a way to scuttle the Affordable Care Act next year. Of course, that depends on a GOP sweep: winning the White House and both chambers of Congress. That’s a tall political order but nonetheless plausible as Mitt Romney, the presumptive GOP nominee, closes in on Obama in the polls. “The single best thing we could do for the American health care system is to get rid of ‘Obamacare,’ get rid of that half a trillion dollars in Medicare cuts, get rid of the half a trillion dollars in taxes,” McConnell said over the weekend.
McCONNELL LAYS OUT THE PLAN
Asked by Fox News Sunday host Chris Wallace whether he could undo Obamacare through budget reconciliation, McConnell replied, “Yes, the Chief Justice said it is a tax, and taxes are clearly what we call reconcilable. That's the kind of measure that can be pursued with 51 votes in the Senate. And if I'm the leader of the majority next year, I commit to the American people that the repeal of ‘Obamacare’ will be job one.”
Democrats have vowed to fight and thwart any GOP effort to dismantle the new law, including a vote scheduled in the House shortly after the July 4th recess to repeal the legislation. McConnell said he would press for a similar vote in the Senate before the November election, but that has no chance of passing as long as the Democrats retain control.
“I don't think the American people want to have this debate again,” White House Chief of Staff Jack Lew said over the weekend. “I don't think they want to be pulled back to decades of debate to get to where we are. We now have a law. The law is constitutional. We should implement it.”
To be sure, there are portions of the huge Affordable Care Act that may be immune to attack via reconciliation, and the Senate’s Parliamentarian, Elizabeth MacDonough, will have to rule on them. But most of the key provisions of the law – including the individual mandate to purchase health insurance, the creation of insurance exchanges where low-income families can buy subsidized policies, and Medicare and Medicaid funding measures – undoubtedly would be subject to reconciliation.
“The vast bulk of the important stuff is budgetary” and thus subject to reconciliation rules, Richard Kogan, a senior budget experts with the left-leaning Center on Budget and Policy Priorities, told The Fiscal Times on Monday. “It either costs money or saves money, and it’s either on the revenue side or the spending side – and it’s budgetary.”