Policy Documents

Research & Commentary: Reconciliation and Obamacare

August 14, 2012

In the wake of the Supreme Court’s ruling regarding the individual mandate in President Barack Obama’s health care law, the conversation on Capitol Hill is focused on the parliamentary issue of reconciliation.

Reconciliation is a parliamentary method that can be used to bypass the 60-vote filibuster in the Senate. Since reconciliation bills are not subject to cloture votes, they instead require only 51 votes (or the votes of 50 Senators plus the vice president) in order to pass. Reconciliation was used to pass Obama’s law, as well as a host of other measures in the past several decades.

Under reconciliation, any provisions of the president’s health care law that affect the federal budget can be repealed. This would include the vast majority of Obama’s law—and the parliamentary barriers to its repeal have been considerably lowered since its passage, given that its deficit score from the Congressional Budget Office has increased thanks to the failure of the CLASS Act and the Court’s own decision regarding Medicaid. This makes the parliamentary procedure even easier to achieve in a hypothetical new Senate.

Reconciliation has been used more than a dozen times since 1990 to pass numerous legislative packages, including ones that increased the deficit. These include President Bill Clinton’s 1993 budget, the Personal Responsibility and Work Opportunity Act of 1996 (otherwise known as welfare reform), the Balanced Budget Act of 1997 (which included the creation of S-CHIP), President George W. Bush’s tax cuts in 2001 (currently scheduled to expire at the end of the year), and the Deficit Reduction Act of 2005, which included reforms to Medicaid and Medicare and was confirmed by a vote from Vice President Dick Cheney following a 50-50 split.

The following sources discuss several aspects of reconciliation. While it may seem to be a messy parliamentary procedure, it has been used many times before. There are relatively straightforward ways for a majority to construct a repeal of Obama’s law should they achieve the necessary seats.

The following documents offer additional information on reconciliation. 

 

Congressional Research Service: The Budget Reconciliation Process: The Senate’s “Byrd Rule”

http://democrats.budget.house.gov/sites/democrats.budget.house.gov/files/documents/reconciliation.pdf

One procedural hurdle a reconciliation-based repeal will have to overcome is [http://democrats.rules.house.gov/archives/byrd_rule.htm] the so-called Byrd Rule, which is codified as Section 313 of the Congressional Budget Act. This rule prohibits the use of the reconciliation method if it would reduce government revenues outside of the current budget window. Since this window is typically a decade, reconciliation cannot be used to enact “permanent” tax cuts – the very reason the so-called Bush tax cuts passed in 2001 and 2003 are about to expire. However, there are several ways around this restriction, including adopting a lengthier budget window.

 

James Capretta: The Reconciliation Option

http://www.nationalreview.com/blogs/print/280274

The Ethics and Public Policy Center’s senior fellow, James Capretta, writes at National Review on the reconciliation option and the possibility of repeal. As Capretta notes, those who think reconciliation is difficult in this circumstance seem to be fooling themselves about the possibility of deploying a legislative package that includes some deficit cuts – one option Capretta does not mention, but which CBO has already scored, for instance, is the block-granting of Medicaid’s long-term care to the states. So long as the total legislative package is estimated to cut the deficit, it would qualify for the reconciliation method.

 

Heritage Foundation: Senate GOP Will Use Reconciliation in an Attempt to Repeal Obamacare

http://blog.heritage.org/2012/06/28/senate-gop-will-use-reconciliation-in-attempt-to-repeal-obamacare/

Senate Republican Minority Leader Mitch McConnell has confirmed [http://www.politico.com/blogs/on-congress/2012/06/mcconnell-ill-repeal-obamacare-as-majority-leader-127753.html  he plans to use the reconciliation method to repeal Obama’s law if he becomes Majority Leader. The Heritage Foundation’s Mike Franc notes this may be easier due to the Supreme Court’s categorization of the individual mandate as a tax, writing: “The mandate is now a revenue provision. Therefore, it is germane and not subject to a Senate parliamentary point of order to strike it from a repeal bill.”

 

Congressional Budget Office: Letter to Sen. John Thune Regarding the CLASS Act

http://www.cbo.gov/sites/default/files/cbofiles/attachments/s720.pdf

When the Obama administration announced it would not be implementing the CLASS Act, a long-term care provision of the health care law, CBO announced that decision would have a tangible effect on the deficit. CLASS was expected to save $83 billion in the 2012–21 budgetary period. CBO considered the administration’s announcement as a new baseline to work from on the assumption that CLASS will not be implemented, deeming any repeal as having no budgetary effect toward a deficit increase. A similar assessment from CBO was given regarding [http://www.cbo.gov/sites/default/files/cbofiles/attachments/hr452_2012.pdf] the repeal of the Independent Payment Advisory Board.

 

Congressional Research Service: The Budget Reconciliation Process

http://assets.opencrs.com/rpts/RL33030_20050810.pdf

This lengthy 2005 memo from Robert Keith and Bill Heniff, Jr. runs through the history of the reconciliation process and its deployment in numerous scenarios. One item they do not note given the timing of their memo, but one likely to be mentioned during a hypothetical reconciliation repeal effort, is that Senate Democrats made the case loudly for the appropriateness of using reconciliation to pass Obama’s health care law in 2010, [http://www.cbpp.org/cms/index.cfm?fa=view&id=3059] as did many liberal think tanks. Opposing reconciliation as a method of repeal will require them to distance themselves from the method used to pass the measure in the first place.

 

Nothing in this Research & Commentary is intended to influence the passage of legislation, and it does not necessarily represent the views of The Heartland Institute. For further information on this subject, visit Health Care News at http://news.heartland.org/health, The Heartland Institute’s website at http://heartland.org, and PolicyBot, Heartland’s free online research database at www.policybot.org.

 

If you have any questions about this issue or the Heartland Web site, contact Kendall Antekeier, Heartland’s manager of external relations, at kantekeier@heartland.org or 312/377-4000.