September 16, 2009 01:20 AM UTC

Reconciliation: An Introduction

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• by: roguestaffer

(Wonky, yes. But for those of you political nerds (us included) who really want to understand, this is good stuff. – promoted by Colorado Pols)

Reconciliation: an Introduction

We can all agree that we’re on the homestretch of the health care reform debate, even if the final decision is still off in the distance.

I’ve seen questions about how the reconciliation process would work in the Senate. Along with those questions, I’ve seen a lot of mistaken thinking on how that process would work. Essentially, people seem to think that it’s the knife that will cut the Gordian knot of Senate procedure and debate.

It’s not. Let me explain, based on my experience in the Hill.  

Originally, reconciliation was a process by which Congress reconciled (hence the name) the first budget resolution (the one it passed at the beginning of the fiscal year) with the second budget resolution (the one it passed at the end of the fiscal year).

That’s it; that’s all it was. And that’s all it would have been, had the regular order of the Senate not gotten seriously off-track.

The “regular order” of the Senate is merely the daily routine of the body. In the regular order, debate on an issue before the body is unlimited (that’s why they call it The Greatest Deliberative Body in The World). If 40 or more senators refuse to stop debating an issue, you need 60 senators to invoke cloture and close debate.

[Sidebar: The 40 or more senators refusing to stop debate? That’s a filibuster. That said, filibusters DO NOT work the way you think they do. No one stands up and talks for 40 hours. That only happens in Hollywood. I’ll explain how the whole filibuster process works another time. If you think I’m wrong – I’m not. I wish I was, but I’m not.]

So what does reconciliation do?

Simply this: it limits debate on an issue to 20 hours, followed by an up-or-down vote, thus rendering filibusters moot.

For example, here’s how health care reform would work under the reconciliation process:

Congress would include reconciliation instructions in the original budget. Those instructions would direct specific committees – say, the Senate Finance Committee and the Senate Health, Energy, Labor & Pensions Committee (otherwise known as HELP) – to draft legislation that would reform health care which hit certain spending targets by a certain deadline. Once that legislation was finished, it would get sent to the Senate Budget Committee. That committee would put it all together into an omnibus bill. In turn, that omnibus bill would head to the Senate floor for 20 hours of debate, followed by that up-or-down vote.

As it turns out, Congress did include those instructions in the original budget, and they essentially stipulate that if there hasn’t been health care reform legislation signed by October 15, the Senate can proceed with a reconciliation package.

So why wouldn’t we use that wonderful tool for every piece of legislation?

Because of the Byrd Rule.

First drafted in 1985, the Byrd Rule (named for Robert Byrd) imposes a set of strict restrictions on reconciliation by limiting what you can consider. The basic theory of the Byrd rule is that any legislation considered under the budget reconciliation process should principally affect federal revenues. A tax cut, for instance, can be considered under the reconciliation process. A new federal holiday cannot. But between those two examples sit crucial ambiguities.

The rule states that legislation is unfit for reconciliation if it:

“produce[s] changes in outlays or revenue which are merely incidental to the non-budgetary components of the provision.”

Here’s the dilemma: how do you define “merely incidental”? What, exactly, is a “provision”?

Nowhere in the Senate rules is there an exact definition of what a provision is. It’s well below a title, or a section of a bill; heck, it’s even below a paragraph. But what it is exactly, no one knows. Furthermore, there’s no clarity in the Senate rules as to how you define what “merely incidental” is. No one at all has developed an exact meaning as to what those two words mean.

That matters. That absolutely matters. Here’s why.

The Byrd Rule allows any senator to challenge the acceptability of any provision (remember, that’s undefined) of a reconciliation bill based on whether or not its effect on government revenues is “merely incidental” (remember, that’s also undefined).

So, if you enter the reconciliation process with a health care reform package, it’s absolutely unclear what would be left behind after each and every provision – however that’s defined – is challenged, and after a good number of them are deleted totally.

For starters, the tax portions would still be around. And so would the government subsidies. That said, is regulating private insurance “merely incidental” to the government’s revenues? What about the construction of a public option? Or individual mandates? How about incentives for preventive treatment – are those “merely incidental”?

It’s really difficult to say with certainty, and anyone who does, doesn’t know the process. It turns out that the most important person in the whole mess is…the Senate Parliamentarian! The ultimate decision in all these matters is left up to him, and his rulings are, charitably speaking, unpredictable.

Even though the GOP was able to ram through all manner of things through reconciliation (both sets of tax cuts, trade authority, etc.), they fired two parliamentarians whose Byrd Rule decisions angered them. Are we willing to do the same – and what does that say about the process if we are?

I know a bit more about the process, having been there on the Hill. Based on what I know, here’s what would likely be cut from any health care reform package that goes through reconciliation.

My guess is that the most important part of the reform package – the Health Insurance Exchanges, where the public option resides – would be thrown out. The insurance market reforms would likely be thrown out as well, as would be prevention and wellness incentives. I’d also wager that delivery system reform, and a whole lot more that currently is part of either the Senate Finance or Senate HELP packages would get tossed out as well.

Thing is, at day’s end, no one can predict what would be lost – it may be that the resulting legislation would be a bill that simply doesn’t work – much like a computer without an operating system.

Before you start rending your clothes and gnashing your teeth, let me look at something that could survive the reconciliation process: Howard Dean’s 2004 health care plan.

Dean proposed combining the Children’s Health Insurance Program (S-CHIP) and Medicaid into one program called the Families and Children Health Insurance Program, and making everyone up to 185% of the federal poverty line eligible for it. Dean also would’ve allowed people between the ages of 55 and 65 to buy into Medicare, and creating a tax credit for people in the middle.

That proposal alone would be a lot less than what we’re looking at in any of the health care reform proposals. They would cover and help far fewer people than the House bill would.

Nevertheless, they would help millions of people. The genius is that they’re directly related to federal programs and directly reliant on federal expenditures. Fund them through Medicare and Medicaid changes, add a small surtax on the wealthy, and it’s tough to see anything that the Senate parliamentarian would object to in that.

I know that that isn’t a great outcome. It’s, however, the best that you can expect from the reconciliation process.

Bottom line, that’s the best way to think about the reconciliation process: as a way to aggressively expand public programs, rather than the place to reform America’s health care system. Depending on how you look at it, it’s not the outcome you may have been hoping for. It’s an outcome, however, that still helps millions of Americans – and isn’t that the point of the whole thing?