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‘Byrd rule’ shadow could fall on Biden coronavirus relief plan

Some $1 trillion in plan could probably survive reconciliation process if Dems can muster majority votes in both chambers

As Democrats prepare to pounce on the opportunity to move President-elect Joe Biden’s $1.9 trillion COVID-19 rescue package through Congress, legislative experts are scrutinizing budget law to see how much of the plan could be passed through the procedure known as reconciliation. 

The answer could determine whether Biden gets just half a loaf done or closer to his full proposal and have any hope of meeting targets like administering 100 million vaccine doses and safely reopening schools within his first 100 days.

Under a reconciliation package, there’s a school of thought that says only about $1 trillion of Biden’s proposal could make it through the complicated “Byrd rule” process in the Senate, mainly provisions for direct aid to individuals and households. 

New legislative provisions that Biden wants, like raising the minimum wage, could not survive a Byrd test, nor could the bulk of funds for vaccine distribution, schools and more that are considered crucial to finally turning a corner in battling the pandemic, the thinking goes. 

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The law is inconclusive on the possibility of including such discretionary funds in a reconciliation bill, and some experts say there’s no specific prohibition on doing so; in fact, it’s been done before. But there’s anecdotal evidence to suggest lawmakers could have a Byrd problem, including Senate parliamentary advice going back to the 1990s, if they went that route on the grand scale required to enact Biden’s plan.

Unless Democrats can win GOP support for the broader plan, as Biden has said he’d prefer, their only paths are to try to pass all or part of it through reconciliation or eliminate the legislative filibuster, as progressive groups prefer. 

The latter option seems unlikely, as moderate Democrats like Sen. Joe Manchin III of West Virginia have balked, and even left-wing icons like incoming Senate Budget Chairman Bernie Sanders, I-Vt., seem eager to dust off the reconciliation process.

“Damn right we will” pass legislation, even with the 60-vote filibuster hurdle, Sanders told reporters Tuesday. “There is a process called reconciliation.”

Reconciliation allows budget- and tax-related measures to pass in the Senate with a simple majority instead of the usual 60 votes. The biggest complication is the Byrd rule, which sets stringent limits on what reconciliation can be used for. The rule is named for former Sen. Robert C. Byrd, D-W.Va., was first adopted in 1985 and later codified in budget law.

Discretionary vs. mandatory

Based on a fact sheet distributed by Biden’s transition team, it appears nearly half of the proposed spending in Biden’s plan is typically classified as discretionary under the jurisdiction of the Appropriations committees.

While discretionary spending has occasionally appeared in past reconciliation bills, there’s been a general presumption that discretionary spending can’t be reconciled. Since the early 1980s, reconciliation has almost always been limited to making changes in mandatory spending programs and taxes. Changing the statutory debt limit is also allowed.

If discretionary spending remains off limits, it may be that close to $1 trillion of the provisions in the Biden plan would be subject to being knocked out of the legislation through Byrd rule challenges, which require 60 votes to waive.

Provisions that could fall to the Byrd rule include funding such as a proposed $170 billion for education; $160 billion for vaccines, testing and public health jobs; $40 billion for child care; and many more. 

The Byrd rule also bars measures that have no impact on the federal budget or are “merely incidental” to their impact on the budget. It’s widely agreed that the proposal to raise the federal minimum wage to $15 an hour would not survive the Byrd rule, for instance. 

Other provisions in the same boat include extending a moratorium on evictions, although the administration can do so temporarily without Congress, and an employer mandate to provide paid family leave — though tax credits to reimburse firms that opt to provide leave would be allowed.

Some provisions in the plan fall into a gray area where it’s less certain whether they would meet a Byrd test.

A proposed $370 billion in aid to state, local, territorial and tribal governments would normally be considered discretionary spending, but if it could be classified as mandatory spending it might meet the test. The $2 trillion aid package last March created a new program run by the Treasury Department to distribute $150 billion in state and local funds, which were classified as mandatory.

The Biden plan includes $5 billion for a low-income home energy assistance program, for instance. Funds for that program are discretionary but were included as mandatory funds in a 2006 reconciliation law.

The House included $1 billion for LIHEAP, as the program is known, in its version as part of the Energy and Commerce contribution. The final conference report included the funds, though it’s not clear if the money survived a Senate “Byrd bath” or just wasn’t challenged on the floor. 

Jurisdictional issues

Some budget experts believe it’s possible that authorizing committees, such as House Ways and Means and Energy and Commerce, could put funding that is normally classified as discretionary into reconciliation legislation.

The biggest problem with that, they say, wouldn’t be with the Byrd rule: It would be sparking a jurisdictional clash with the Appropriations committees. Lawmakers also would need to deal with across-the-board spending cuts to cure pay-as-you-go rule violations, which they’d need 60 votes to overturn.

G. William Hoagland, a former top GOP Senate aide, disagrees that discretionary funds could be made safe from Byrd challenges in reconciliation. One potential issue is that the mere fact of appropriating funds doesn’t mean the money will automatically be spent — or, in other words, produce the actual change in outlays required under reconciliation. 

In addition, committees aren’t allowed to meet their reconciliation instructions by making changes in programs outside their jurisdiction. Hoagland is skeptical that under reconciliation an authorizing committee would be allowed to create a new program, substituting mandatory spending for programs that were funded by discretionary funds in the past. That’s a potential problem for the national vaccination program Biden wants, for instance.

However, other sources say providing funds under certain “terms and conditions” intended to produce changes in spending, like grants to states, school systems and the like, would pass muster under the Byrd rule.

Even if the current Senate parliamentarian, Elizabeth MacDonough, agrees with past interpretations that reconciliation isn’t supposed to be used for appropriations, it’s possible Democrats will try to ignore her. Sanders, for example, has floated the option of getting the chamber’s presiding officer, in this case the vice president, to ignore parliamentary rulings that don’t go their way. 

Still a hefty price tag

Despite potential Byrd rule issues, some $1 trillion in Biden’s plan could probably survive the reconciliation process if Democrats can muster majority votes in both chambers.

Experts largely agree that the $1,400 tax rebate checks, extending and expanding unemployment benefits, extending an increase in Supplemental Nutrition Assistance Program payments, expanding or increasing various tax credits, and expanding and extending paid leave tax credits would fit under the reconciliation umbrella.

If Democrats pursue reconciliation, the House could adopt a bare-bones fiscal 2021 budget resolution and send it to the Senate, where it could be taken directly to the floor, skipping the Senate Budget Committee to save time and streamline the process. That measure would carry reconciliation instructions directing authorizing committees to produce legislation to flesh out Biden’s plan.

Biden is likely to make a case to Republicans to support his plan first before falling back on reconciliation. 

If that fails, a middle way is also possible. Democrats could attempt to reach a compromise with Republicans to pass appropriations legislation through regular order that would address the most pressing needs of the pandemic, such as funding for vaccines, testing, hiring of public health care workers and reopening schools. Then they could pivot to reconciliation to try to pass other provisions that Republicans oppose and that are clearly within the purview of that process.

Jennifer Shutt contributed to this report.

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