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House ‘Reconciliation’ Bill Was Anything But

Unless the House decides to consider another makes-no-sense-and-has-no-effect bill such as the “reconciliation” bill it passed last week, the fiscal 2013 budget process essentially is over and done with until after Americans go to the polls in November.

Yes, action on appropriations will be needed by the time the fiscal year begins Oct. 1. But even if there is some spending Sturm und Drang, the most likely outcome at that point will be a bipartisan shrug of the shoulders and a short-term continuing resolution that avoids a government shutdown before the election.

That will keep federal departments and agencies funded through part or all of the lame-duck session of Congress that now seems 100 percent inevitable.

So why did the House last week debate and pass the Sequester Replacement Reconciliation Act? Not only is the name a complete misnomer, but the bill won’t accomplish anything.

First, it has nothing to do with reconciliation. Reconciliation can only occur pursuant to instructions in a budget resolution conference report approved by both chambers of Congress. With the Senate unwilling to consider a budget resolution this year, there will be no such agreement.

In addition, reconciliation is the procedure the Congressional Budget Act allows to be used to make changes in mandatory spending and revenues. The House-passed bill focuses on appropriations, and those changes are supposed to be implemented in a different way.

That makes use of the reconciliation label and the implication of the bill’s importance both grossly incorrect and substantially overstated to the point of being all hype and spin. It would have been just as accurate to call what the House passed a constitutional amendment as it was to refer to it as reconciliation.

Second, even if the bill were enacted, it wouldn’t actually replace the sequester — the spending cut that will occur Jan. 2 because the anything-but-super committee failed to agree on a deficit reduction plan. It might be an alternative, but it’s definitely not a replacement.

There are two theories as to why the Republican leadership moved ahead with this bill last week even though it wasn’t what it claimed to be and will never be enacted.

The practical theory is that the House passing the “reconciliation” bill in 2012 will make it much easier for the Senate to move quickly in 2013 to do the same if Republicans are in the majority in the next Congress.

That’s procedurally incorrect and, therefore, makes no sense. As with all other legislation considered but not enacted, this bill will die when Congress adjourns at the end of the year. The new Senate won’t be able to expedite the legislative process by simply taking up what the House previously adopted because, technically, the House will not have yet adopted anything and will have to do so again.

In fact, to do reconciliation next year, the House and Senate will both have to agree on a budget resolution conference report, pass their own reconciliation bills, resolve their differences on those bills and then each agree to the compromise — and that assumes they won’t have to deal with a presidential veto.

That’s a process that won’t be expedited by what the House did last week. Indeed, the most likely timetable for that happening is for both chambers to include a 2013 budget resolution with reconciliation instructions for that fiscal year when they debate and pass a 2014 budget resolution, and that most likely won’t start to happen until April or May at the earliest.

That means that, assuming a 2014 budget resolution is adopted next year, reconciliation for 2013 wouldn’t occur until around June 2013 — five months after the Jan. 2 sequester will have gone into effect.

The other theory about why the Republican leadership insisted that the misnamed, misleading and do-nothing bill be debated and passed is that it’s all political. Passing the bill gave the House GOP another way to show its commitment to cutting spending and demonstrated a desire not to go ahead with the Pentagon spending reductions that are part of the sequester.

In other words, it was just an election-year ploy.

This makes far more sense. The bill the House voted on last week will be great for many GOP candidates on the campaign trail because it will allow them to talk about their willingness to cut domestic spending, not cut military spending and move ahead with the budget process.

But recognizing it’s a political effort is an admission that last week’s debate on the bill really has nothing to do with the federal budget debate. The “reconciliation” bill is the best indication yet that those efforts won’t restart until after Nov. 6.

And in other news: The Treasury last week reported that the federal government had a $59 billion surplus in April. Not only was the surplus larger than expected, it was also the mirror image of last April’s more than $40 billion deficit. No matter what the direction, an almost $100 billion turnaround in any month is news.

There was a time when an April surplus wouldn’t have been news. Most Americans pay their individual income taxes in April, and until the past few years, that made a surplus typical. That makes this April’s results noteworthy and worth watching. If it’s the start of a return to budget normality, the overall budget deficit could begin to be much lower compared with previous years.

Stan Collender is a partner at Qorvis Communications and founder of the blog Capital Gains and Games. He is also the author of “The Guide to the Federal Budget.”

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