Reconciliation Myths.

"A Primer on Reconciliation," put together by Ken Strickland of NBC at First Read does a nice job of explaining the arcane process and some of the limits that will make it both difficult and risky to push health reform through that process, despite the appealing feature that it can bypass Republican obstruction.

However, Strickland repeats a common misperception about the history of the process, and getting that history right is useful for understanding the limits. Strickland writes, "In 1974, in an effort to cut the nation's soaring deficits, Congress passed a law creating a procedure that could NOT be filibustered and would only need a simple majority of 51 votes to pass. Without a filibuster-proof procedure, lawmakers reasoned, the Senate would face difficulty passing bills that would make cuts in Medicare and Medicaid."

The thing is, deficits were not "soaring" in 1974. The federal budget deficit that year was $6 billion, or four-tenths of 1 percent of GDP. This year's deficit will be about 13 percent of GDP. Reconciliation was not designed to force cuts in Medicare and Medicaid, which were not yet growing rapidly. When I was in the middle of the reconciliation process in 1993, trying to push a complex provision, I suddenly understood the process in a way I never had from the books: It was an effort to impose a modern, public-management type of budget process on top of the existing congressional process without disturbing the powers that be. It was a kludge. Before 1974, the president wrote a budget, but there was no overall congressional budget. The authorizing committees created programs, the appropriations committee funded some of them, others, like Social Security and Medicare, were funded automatically, based on the rules of the programs. There was no overall plan for spending or taxes. The Budget Committee (also created in 1974) was empowered to produce a plan, but in itself that plan would have no power.

To make sure the plan had some connection to the existing process, the Budget Act required Congress to pass a budget resolution, subject to a time limit in the Senate not to force cuts, but to make sure that some kind of budget was created. (Strickland treats the time limit as if it was separate from the 50-vote requirement, while in fact they are the same thing -- there is no 60-vote requirement in the Senate, just a rule that debate is unlimited unless 60 senators vote to end it.) That resolution then creates a set of instructions to each of the relevant committees -- it sets an overall limit for the Appropriations Committee, and then tells each of the other committees how much money it has to save, or spend, in its programs. The biggest of those instructions usually goes, in the Senate, to the Finance Committee because it's jurisdiction (now) includes most of the money the government raises and half of what it spends. Those committees can meet the instructions however they want, but their actions are then put together in a "reconciliation" bill.

This wasn't originally meant to be a grand process for big policy changes. Rather, it was designed to "reconcile" the modern budget process with the arcane congressional process. In 1981, Ronald Reagan's budget director, David Stockman, figured out that the process could be used to package together and force a vote on the big budget cuts they envisioned. Later that decade, Sen. Byrd created the rule that bears his name to put some boundaries around the process, although it has still been used for both bipartisan (1990 and 1997 budget deals) and single-party bills, including welfare reform and tax cuts. But even in those cases, legislation has been sharply trimmed to accomodate the constraints of the process -- for example, that's why the Bush tax cuts had to be set to expire.

The reason this history is important is because it is a reminder that reconciliation was not designed to create a "50-vote Senate." It was really a limited scheme intended to connect the old spending process with the new.

In the lead-up to the Iraq War, there was a saying among neoconservatives: "Everyone wants to go to Baghdad. Real men want to go to Tehran." Now, among progressives, one might say, "Everyone wants to do health reform. Real men want to use reconciliation" to cut out all Republicans and a few Democrats. But legislative strategy, like foreign policy, is not a test of manhood. It's a very arcane and limited process that will leave many key provisions behind, and a weak and limited health plan.

One way or another, we'll have to compromise. We'll either compromise with the most conservative Democrats and one or two Republicans, or we'll compromise with the limits of a process that was designed for a totally different purpose. The political question is simply going to be which compromise is worse.

-- Mark Schmitt

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