In the next week or so, Democrats will make sweeping changes to American health care using “budget reconciliation,” an arcane process that allows Congress to minimize debate, prevent amendments, and circumvent filibusters in the Senate, a top Republican budgeteer predicts.
“You would do the same thing, too,” said Rep. Paul Ryan (R, Wisc.), the ranking Republican on the House Budget Committee and the author of the Republicans’ alternative budget. “It’s basically an insurance policy to get their agenda passed. Why would they take this tool off the table when they don’t need to?”
Reconciliation, originally designed in the 1974 Budget Act as a means for helping the government save money and keep federal budgets closer to balance, allows for certain legislation to pass both houses of Congress on an expedited basis — and perhaps most importantly, to pass the Senate with a bare majority. Despite Republican threats of retribution in the Senate, the GOP is virtually powerless to prevent this from happening.
The reconciliation process begins with passage of a bicameral budget resolution that tells congressional committees to find savings or new revenues in their departments of jurisdiction. In the budget the House passed last month, for example, there exists such an instruction to find a miniscule $1 billion in savings. If that provision finds its way into the final budget that will be considered by both houses (probably next week), that is all it takes to pave the road to nationalized health care.
Then, later in the year, legislation to “reconcile” that $1 billion in savings with government policy can pass Congress without the threat of amendments, with comparatively little time for debate, and by a bare majority vote in the Senate.
In this case, the Obama administration plans to abuse a process that was designed to save money, not create expansive and expensive new policies. The idea is to implement two controversial policies at the once — carbon caps, which will raise government revenues, and nationalized health care, which costs money. Ideally, the one policy allows the other one to pass. If Congress can estimate for itself $1.5 trillion dollars in future revenues from selling mandatory carbon credits, it can then pass legislation under reconciliation to spend all but $1 billion of that money on an entirely new health-care system.
The final result: $1 billion “saved,” thus complying with the budget reconciliation instructions. A billion-dollar tail wags a $1.5 trillion dog.
Although the idea of reconciliation is to improve the budget’s bottom line by finding greater savings and revenues than the amount of the new spending, reconciliation has effectively become a tool in recent times for spending more or taxing less. When they controlled Congress, Republicans used the tactic to reform welfare in 1996 and to cut taxes with a majority vote in 2001. They repeatedly tried to use reconciliation to open Alaska’s Arctic National Wildlife Refuge for exploration — this was actually closer to the original intent of the process, because the drilling revenues would have increased the budget’s bottom line.
“We’ve seen mission creep with reconciliation under both Republicans and Democrats — there’s no question about that,” said Ryan. “But this takes mission creep to a whole new level. Now they’re talking about the possible nationalization of 17 percent of our economy in health care, 8 percent of the economy in energy, and the largest tax increase in history — all through a process which will have between 35 and 105 total hours of debate between the House and the Senate . . . That’s an enormous power grab.”
The biggest problem Democrats face is that they may not be able to find the votes in the Senate to enact carbon caps, because of objections by Democrats from energy-producing states such as Louisiana and West Virginia. In that case, they would have to come up with revenues from other areas in the budget. “They’ll simply have to come up with enough tax increases, or some kind of savings to pay for their health-care plan,” said Ryan. “They could get $100 billion and change out of Medicare advantage . . . that sort of thing.”
If such measures do not produce enough money for Obama’s new health system, there are many common budget tricks to get around this limitation. For example, the legislation can suddenly and dramatically cut funding for the new health-care program after a few years of operation — after which, Congress can simply add the funding back in, perhaps through reconciliation once again. This was the budget tactic that Democrats used this year when they expanded the State Childrens’ Health Insurance Program (SCHIP) – under current law, the program’s funding suddenly falls off a cliff in 2013, in order to satisfy deficit rules on paper.
Democrats control only 58 votes at the moment, and pending the outcome of the Coleman-Franken election contest in Minnesota, they may gain one more this spring. With at least one Democratic senator, Ben Nelson (D, Neb.), making noises that he might vote against a sweeping reform of American health care, reconciliation might be their best or their only option for creating a health-care system run in part by the government or with a much larger government role.
Some Senate Democrats have cautioned against the use of reconciliation to overhaul health care. Sen. Kent Conrad (D, N.D.), chairman of the budget committee is among them.
Sen. Robert Byrd (D, W.Va.), who actually participated in writing the Budget Act of 1974, was far more emphatic in his opposition, writing on April 2 that it “would violate the intent and spirit of the budget process and do serious injury to the Constitutional role of the Senate . . . As one of the authors of the reconciliation process, I can tell you that the ironclad parliamentary procedures it authorizes were never intended for this purpose,” Byrd wrote. “Reconciliation was intended to adjust revenue and spending levels in order to reduce deficits. It was not designed to cut taxes. It was not designed to create a new climate and energy regime, and certainly not to restructure the entire health care system.”
Republicans have tried to prevent the use of reconciliation on both carbon caps and nationalized health care. A budget amendment by Sen. Mike Johanns (R, Neb.) to prevent its use for carbon caps received 67 votes in the Senate, reflecting many Democrats’ fears of the economic devastation such caps could create for their states. An amendment by Sen. Jim DeMint (R, S.C.) to make health-care legislation through reconciliation more difficult, was accepted on voice vote.
But both of these provisions are very likely to be dumped when House and Senate negotiators draft a final version of the budget.