There are two things that will not be in Senate Budget Chair Kent Conrad's budget draft: Actual money for health care and the instructions that could activate the reconciliation process. Another way of saying that is that Kent Conrad has deleted all of the specifics from the health reform portion of the budget. So why are reformers so happy?Take the $634 billion reserve fund that was supposed to partially pay for health reform. In Conrad's budget, which is to say the Senate's first draft of a budget, there will be no $634 billion reserve fund for health reform. But there will be space for a health reform reserve fund. Conrad deleted the President's specific revenue streams, cost-cutting proposals, and ending number. He says that health reform must be fully paid for in the budget. That means that rather than $634 billion, Congress will need, as they always would eventually, to find the whole of the estimated trillion or so needed to pay for health reform over 10 years.Oh, right. The 10 years thing. Conrad offered a huge concession to reformers. He's pulling the budget's spending window back to a five-year perspective. That hides the size of the 10-year budget. But he's allowing health care to be scored under an 10-year time frame so that initial investments in system reform have time to pay themselves off. The system, in other words, doesn't have to be deficit neutral over five years, which will see bulk of the upfront investments, but over 10, when those investments should begin paying their dividends. To give you an idea of how important this is, Max Baucus's immediate response was “I’m very happy that health care reform does not have to be paid for in the first five years. We could not do meaningful healthcare reform [otherwise].”The next question is why Conrad deleted the President's specific revenue streams. The $300 billion that came from limiting itemized deductions for the rich, for instance, is gone. As is the proposal to squeeze Medicare's overpayments to private insurers. Some argue that that's actually a good thing: Watching the itemized deduction proposal get batted around in recent weeks was an important lesson. You can't let pieces of the bill -- particularly the hard financing pieces -- stand alone. It's easier to oppose a tax hike than universal health care. It has to be built, and then argued, in its totality.On the other hand, the Senate must now find north of $1 trillion for health reform over 10 years rather than $500 billion or so. That's a heavier lift.Lastly, Conrad's decision not to include reconciliation is both less meaningful and more politically savvy than it might initially seem. The key here is that the House budget will include reconciliation. And the two budgets must merge in conference committee. The Senate can still import reconciliation instructions from the House budget at a later date. What Conrad has just done, in other words, is undercut the Senate Republicans' ability to justify non-cooperation on grounds of reconciliation. Senate Democrats can now claim, credibly, that they are not considering the reconciliation process. Which means the balls is back in the Senate Republicans' court: They now have their opportunity to prove that this can be a constructive process conducted through the normal procedures of the Senate. If that proves impossible, Senate Democrats can sigh deeply and gravely lament the obstruction of their colleagues and return to reconciliation after conference committee.Related: Jon Cohn has more. And don't you feel like reading a longer explication of the reconciliation process? WHAT HAS KENT CONRAD DONE?
There are two things that will not be in Senate Budget Chair Kent Conrad's budget draft: Actual money for health care and the instructions that could activate the reconciliation process. Another way of saying that is that Kent Conrad has deleted all of the specifics from the health reform portion of the budget. So why are reformers so happy?Take the $634 billion reserve fund that was supposed to partially pay for health reform. In Conrad's budget, which is to say the Senate's first draft of a budget, there will be no $634 billion reserve fund for health reform. But there will be space for a health reform reserve fund. Conrad deleted the President's specific revenue streams, cost-cutting proposals, and ending number. He says that health reform must be fully paid for in the budget. That means that rather than $634 billion, Congress will need, as they always would eventually, to find the whole of the estimated trillion or so needed to pay for health reform over 10 years.Oh, right. The 10 years thing. Conrad offered a huge concession to reformers. He's pulling the budget's spending window back to a five-year perspective. That hides the size of the 10-year budget. But he's allowing health care to be scored under an 10-year time frame so that initial investments in system reform have time to pay themselves off. The system, in other words, doesn't have to be deficit neutral over five years, which will see bulk of the upfront investments, but over 10, when those investments should begin paying their dividends. To give you an idea of how important this is, Max Baucus's immediate response was “I’m very happy that health care reform does not have to be paid for in the first five years. We could not do meaningful healthcare reform [otherwise].”The next question is why Conrad deleted the President's specific revenue streams. The $300 billion that came from limiting itemized deductions for the rich, for instance, is gone. As is the proposal to squeeze Medicare's overpayments to private insurers. Some argue that that's actually a good thing: Watching the itemized deduction proposal get batted around in recent weeks was an important lesson. You can't let pieces of the bill -- particularly the hard financing pieces -- stand alone. It's easier to oppose a tax hike than universal health care. It has to be built, and then argued, in its totality.On the other hand, the Senate must now find north of $1 trillion for health reform over 10 years rather than $500 billion or so. That's a heavier lift.Lastly, Conrad's decision not to include reconciliation is both less meaningful and more politically savvy than it might initially seem. The key here is that the House budget will include reconciliation. And the two budgets must merge in conference committee. The Senate can still import reconciliation instructions from the House budget at a later date. What Conrad has just done, in other words, is undercut the Senate Republicans' ability to justify non-cooperation on grounds of reconciliation. Senate Democrats can now claim, credibly, that they are not considering the reconciliation process. Which means the balls is back in the Senate Republicans' court: They now have their opportunity to prove that this can be a constructive process conducted through the normal procedures of the Senate. If that proves impossible, Senate Democrats can sigh deeply and gravely lament the obstruction of their colleagues and return to reconciliation after conference committee.Related: Jon Cohn has more. And don't you feel like reading a longer explication of the reconciliation process? 
