Budget Reconciliation May Be Obamacare's Enemy

Democrats used the complicated process of budget reconciliation to pass part of President Barack Obama’s health care legislation in 2010, and avoid a Senate filibuster; now Republicans are weighing whether to use the same process to chip away at the law.

Senate Majority Leader Mitch McConnell has hired a top budget expert as his policy director, and a House Republican aide has indicated reconciliation will be a focus of the congressional Republican retreat this month.

“We’re going to use every tool that is out there, including reconciliation,” Republican John Barrasso of Wyoming said recently in a speech on the Senate floor.

But targeting the president’s signature policy achievement through reconciliation isn’t a foregone conclusion, nor would it necessarily succeed, according to several health policy experts — and not just because Obama would veto it: Reconciliation legislation can only be written after Congress first agrees on a budget resolution.

Even then, the process is limited by Byzantine procedural rules, Congressional Budget Office scoring and Senate parliamentarian interpretation — and reconciliation certainly wouldn’t be quick.

“A lot of people have been talking about reconciliation as some sort of magic wand they can wave and then all of the sudden Obamacare is gone, but that’s not the case,” said Gordon Gray, director of fiscal policy for the American Action Forum, a conservative policy institute.

A budget reconciliation bill has been an appealing instrument for many GOP lawmakers eager to show their disdain for the 2010 health care overhaul (PL 111-148, PL 111-152) because the process only requires a simple majority vote for passage in the Senate and limits debate to 20 hours.

However, G. William Hoagland, senior vice president of the Bipartisan Policy Center and former budget and appropriators director for Tennessee Republican Bill Frist when he was Senate majority leader, emphasized that in order to tee up a reconciliation bill, both chambers first must pass a fiscal 2016 budget resolution and negotiate a conference report, “which hasn’t been done in five years,” he said. Without one, it’s like “getting the cart out in front of the horse.”

Aligning Means and Ends

The reconciliation process, created by the 1974 Budget Act (PL 93-344), works this way: Congress writes “instructions” into its annual budget resolution directing various House and Senate committees to draw up legislative language to achieve the resolution’s goals — in effect reconciling the law with the budget. The committees have some latitude in their methods of achieving this, but they must meet numeric targets. Their work is then combined into one or more bills and sent to the floors of both chambers.

A reconciliation bill can pertain to a variety of budgetary and fiscal issues such as the health care law and a tax overhaul. But Gray says that “you only get so many bites at the apple in a given budget resolution.”

Furthermore, a reconciliation bill must adhere to various Senate rules, which are interpreted by the Senate parliamentarian and can only be overturned by 60 votes. The “Byrd Rule,” named for late West Virginia Democrat Robert C. Byrd, requires that any “extraneous” provisions may be blocked from the process, including those that do not produce a change in outlays or revenues, those that suggest changes in Social Security or that are outside the jurisdiction of the committee that submitted the provision.

Sarah Binder, senior fellow in governance studies at the Brookings Institution and political science professor at George Washington University, says the tricky Senate rules were adopted later because “when the Budget Act was written, there was no anticipation that this would be used as a short cut for a filibuster, or a mechanism for the Senate to work its will on the big issue of the day.”

Because of the potential roadblocks and the lack of wiggle room for mistakes when it comes to reconciliation, Republican leaders have been careful to settle on a strategy. “Republicans haven’t precisely shown their cards yet,” Binder said.

If Republicans want to use the process to fully repeal the law, it would be a largely symbolic move. Hoagland said that in order to get such legislation through the “Byrd bath” and on to the president’s desk, lawmakers would probably need to include language in the budget resolution that would remove the restriction on provisions that would increase the federal deficit past a 10-year period. The CBO has estimated in the past that a full repeal of the health care law would increase the deficit.

Lawmakers could take a more piecemeal approach, in an effort to move legislation that has some Democratic support, by peeling off portions of the law that wouldn’t be ruled extraneous, such as tax increases, insurance subsidies and Medicaid expansion. But provisions such as the insurance regulations would most likely not fall under the reconciliation umbrella, according to some experts.

Orders in the Court

Another factor in determining the Republican strategy might hinge on the outcome of a Supreme Court challenge to the health care law’s insurance subsidies, according to James C. Capretta, visiting scholar at the conservative American Enterprise Institute and former Office of Management and Budget associate director.

If the justices rule that the federal government cannot offer health insurance subsidies to individuals in states that did not create their own insurance exchanges, “Congress should be ready with a replacement plan, because subsidies would be in jeopardy for a large part of the country,” Capretta said. “They could use reconciliation to begin replacing [the law] with provisions they like better.”

A decision on the case is not expected until summer, but many Republicans will want to quickly take some action on the health care law. Reconciliation could prove too slow and complicated for dismantling the law, but the filibuster-proof process might be too tempting to resist altogether.

“I think they’ll use reconciliation for something,” Capretta said. “The question is, for what?”

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