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House rules would exempt coronavirus, climate bills from budget limits

Changes could paper over differences within House Democratic Caucus between deficit hawks and progressives

Rep. John Yarmuth, D-Ky., talks before a House Budget Committee meeting in January 2020.
Rep. John Yarmuth, D-Ky., talks before a House Budget Committee meeting in January 2020. (Caroline Brehman/CQ Roll Call file photo)

The new rules package for the 117th Congress unveiled by House Democrats on Friday would grant a sweeping new exemption from deficit controls for legislation related to the coronavirus pandemic or efforts to curb climate change.

The text of the resolution, which House leaders expect to take up Monday, would provide House Budget Chairman John Yarmuth, D-Ky., broad authority to “adjust” cost estimates for certain bills so that their budgetary impacts don’t count as increasing deficits under House rules.

In practice, the new section means legislation that fits within the two broad new categories doesn’t need to comply with appropriations limits affecting discretionary programs, or pay-as-you-go rules for measures affecting tax revenues and “direct spending,” otherwise known as mandatory programs.

Pay-as-you go rules would be preserved for other legislation that increases deficits, which has been a sore spot with left-leaning groups and some progressive House Democrats. Last month, Rep. Alexandria Ocasio-Cortez, D-N.Y., told CQ Roll Call that the potential return of pay-as-you-go was “probably the biggest concern of mine” when it comes to the new House rules package.

But the new exemptions are so broad that it’s possible wide swaths of a $1.5 trillion infrastructure package similar to one that passed the House over the summer could be spared, for instance. That measure contained new spending and tax incentives for clean energy programs and financing, water and wastewater infrastructure and more.

The new language stipulates that “measures to prevent, prepare for, or respond to economic, environmental, or public health consequences resulting from climate change” wouldn’t be considered deficit-spending that requires offsets.

The same language applies to measures intended to address the “COVID-19 pandemic.” That could include much of the initiatives contained in earlier House Democratic relief packages that ranged in size from $2.4 trillion to $3.4 trillion in increased deficits.

President-elect Joe Biden and top House Democrats, including Ways and Means Chairman Richard E. Neal, D-Mass., have suggested that a huge pandemic response package could be combined with longer-term infrastructure and climate policies next year.

Such exemptions from budget limits could go a long way toward papering over differences within the House Democratic Caucus on the new rules, which the party will have a very slim majority to try to adopt.

In describing the broad impacts of the rules changes, Speaker Nancy Pelosi, D-Calif., and Rules Chairman Jim McGovern, D-Mass., said in a statement that the package will “ensure Congress can respond to the dual threats of the climate crisis and the COVID pandemic by exempting those bills from budget rules, while overall continuing to adhere to fiscal responsibility.”

The practical effect of the rules changes may not be all that significant, since the House regularly waives existing pay-as-you-go rules and uses emergency designations to get around appropriations caps. More than $3 trillion in pandemic relief measures became law last year alone, for instance.

But the changes could make it easier for House Democratic leaders to bring expensive bills to the floor, since rules governing floor debates will be tougher to adopt given the party’s razor-thin majority.

Reconciliation changes

The rules changes also would drop a fixture of prior Congresses, which said reconciliation directives to authorizing committees as part of a budget resolution could not “cause an increase in net direct spending” over the period covered by the budget.

Reconciliation directives can be cobbled together into three separate filibuster-proof legislative packages for each fiscal year budget cycle: one for changes in mandatory spending, one for legislation affecting tax revenue, and one for raising the statutory debt limit. Tax and spending changes can also be combined into one reconciliation bill, though the limit on one per budget cycle stands.

The rules change says that the combined effect of the changes can cause mandatory spending to increase overall, as long as it is offset with tax increases. But since the Budget Committee is charged with determining the deficit impact of legislation under House rules, the broad pay-as-you-go exemptions for climate change and coronavirus-related measures also could potentially apply to reconciliation bills.

Getting such legislation through the Senate is another matter, given the “Byrd rule” that bars reconciliation measures which increase deficits beyond the fiscal years covered under the budget resolution. That rule in the past has required lawmakers to let deficit-increasing policies expire, such as the 2001 and 2003 tax cuts enacted under President George W. Bush and parts of the 2017 tax overhaul under President Donald Trump.

To use reconciliation procedures, a joint budget resolution agreed to by both chambers is required first, however. If Republicans hold onto the Senate after the Jan. 5 Georgia runoffs, that prospect is unlikely.

One rules change from the last Congress that would hold over into the 117th is a provision allowing the House to automatically spin out a debt limit bill to the Senate without a separate vote as long as the House adopts its own budget resolution.

The current debt limit suspension ends July 31, making that an item the new Congress and the Biden administration will need to deal with at some point next summer or fall.

The House rules changes also wouldn’t add any new language regarding earmarks in spending, tax or tariff bills, preserving flexibility for Democratic leaders to bring back the earmarking process as they’ve pledged this year.

Lindsey McPherson and David Lerman contributed to this report.