Herszenhorn Discusses Reconciliation For Health Care

Ever since Scott Brown's victory in Massachusetts, there has been a lot of talk about Democrats using budget reconciliation to pass a comprehensive health care bill in the Senate.  A New York Times article by David Herszenhorn describes reconciliation as an "evening out."

Budget reconciliation relies on policy changes to "even out" federal spending and revenues, so that the government can meet goals set in the annual budget resolution adopted by Congress, which generally means hitting targets for reducing the deficit

In the past, reconciliation has been used to pass deficit reduction packages such as the Omnibus Budget Reconciliation Acts of 1990 and 1993, the 1996 welfare reform, and more recently, the 2001 and 2003 Bush tax cuts.  Obviously, the focus has been on the fact that legislation pushed through reconciliation would be filibuster-proof, requiring only a simple majority to pass.  But the process is not that simple.  There are other procedural hurdles that the Democrats would have to overcome.

In general, reconciliation measures must comply with rules that are stated in the previous budget resolution.  Additionally, the Byrd rule requires that all provision of a reconciliation measure have a direct budgetary impact that advances the fiscal goals of the budget resolution.  Any provision that violates the Byrd rule is automatically struck from the reconciliation package.  Thus if the Senate wanted to include some of President Obama's new provisions, such as the Health Insurance Rate Authority, they would not be able to pass it through reconciliation since the provision would not have a direct fiscal impact. 

Another hurdle Herszenhorn mentions is that the Byrd rule requires any reconciliation package to be at least deficit-neutral in every year after the period it covers (in this case, five years.)  The passed Senate bill reduces the deficit over ten years, but much of the savings are back-loaded, and if they adopt Obama's proposal to delay the excise tax on high-cost insurance plans until 2018, it would become much harder for the Senate to achieve savings in 2015 and beyond.

Beyond the procedural difficulties of reconciliation, the more widely noted aspect is the political storm the potential use of the process has stirred up.  Republicans have criticized the use of reconciliation as an attempt to jam a partisan piece of legislation through Congress, while Democrats have pointed to Republican measures, especially the 2001/2003 tax cuts, which used reconciliation to get passed.

Regardless of the arguments over whether it would be right to use reconciliation, Senate Democrats would still have the arduous task of navigating the minefield of reconciliation's rules.