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Reconciliation for Health Care Should Not Be an Issue

How is it possible that the part of the Congressional budget process designed to bring people together and create closure is creating so much angst and leaving so much up in the air this year?

[IMGCAP(1)]This is not about the usual budget subjects like the deficit, spending, taxes or even something ridiculous like earmarks. I’m talking about reconciliation, the procedural issue that could derail the fiscal 2010 budget debate all by itself. Although that seems less likely to happen now than it did before the recess began, reconciliation will still be something discussed at length over the next few weeks while the House and Senate work out their differences on the fiscal 2010 budget resolution.

Given all of the demagoguing that has taken place and the misinformation that has been spread about reconciliation, a little plain talk, history and perspective might be helpful.

Reconciliation is the process Congress may use to enforce what it decides in the budget. It applies only to mandatory spending and revenue and, as the word “may— indicates, is discretionary. Congress may use reconciliation if it wants to make sure the committees with jurisdiction over mandatory spending and revenues actually make the changes assumed in the resolution. Congress may also decide not to use reconciliation and instead simply hope that those committees make the changes.

That’s a huge difference. Using reconciliation means that some budget-related policy change has a much better chance of actually happening. Not using it typically means that, even though something is included in the budget resolution, the chances of it being adopted are much less.

Reconciliation, which was part of the Congressional Budget Act when it was adopted in 1974, wasn’t used until the start of the Reagan administration. Although it hasn’t been used every year since then, reconciliation has become such a regular part of the budget process that it’s now generally considered a staple. It has been used by Republican- and Democratic-controlled Congresses alike for both spending and revenues.

The most important and obviously controversial part is that reconciliation bills can’t be filibustered because the debate is limited by law. That would mean nothing if there were 60 votes to do what was in one of these bills. But in the current environment when there may not be 60 votes to declare today Tuesday, being able to pass spending and taxing changes with a simple rather than a super majority changes the politics significantly.

This is why reconciliation is such a hot topic this year. The House-passed version of the 2010 budget resolution allows health care reform to be included in a reconciliation bill and, therefore, adopted in the Senate with 51 votes; the Senate-passed budget resolution does not. This critical difference now has to be ironed out in the conference and many believe that passing health care reform this year depends on which set of rules are used.

But the truth is that, when it comes to health care, reconciliation shouldn’t be an issue at all.

First, contrary to what some have been saying, reconciliation has become such a standard part of the budget process that using it for health care would be neither surprising nor precedent-setting. When they were in the majority, Republicans insisted that reconciliation was allowed by Senate rules and used it in 2001, 2003 and 2005. Back then, Sen. Judd Gregg (R-N.H.), who has been one of the biggest opponents of using reconciliation this year, made what in retrospect is an almost infamous floor speech about the appropriateness and legality of using reconciliation.

Second, health care reform will have a substantial impact on federal finances and so can’t be said to be unrelated to the budget, which is one of the critical criteria for using reconciliation. In fact, given that at least two of the largest mandatory federal spending programs — Medicare and Medicaid — are health care programs, health care reform and reconciliation would seem to be a perfect fit.

Third, a process is already in place to deal with the issue if the budget impact of health care reform isn’t deemed to be substantial enough to be included in a reconciliation bill: the Byrd rule. Sen. Robert Byrd (D-W.Va.) was so concerned about reconciliation being misused that he authored an amendment to the Congressional Budget Act preventing “extraneous— provisions from being included.

Ironically, House Members have complained about the Byrd rule for years because, by making it easy for certain provisions to be stricken from reconciliation bills in the Senate, it prevented the House from doing the things it wanted to get done. Now some in the Senate are complaining that reconciliation will make it easier for something to happen.

Finally, including it in reconciliation does not prevent the committees with jurisdiction from producing a bill outside the reconciliation process. In fact, including health care in reconciliation may very well provide a strong incentive for these committees to produce a bill on their own. Reconciliation would then only be used if they can’t and only if what is proposed satisfies the Byrd rule.

No one should be surprised, therefore, if reconciliation instructions on health care reform end up being included in the conference report. Given the overall situation, it might be more surprising if they were not included.

Stan Collender is a partner at Qorvis Communications and author of “The Guide to the Federal Budget.— His blog is Capital Gains and Games.

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