reconciliation


Yes, NPR, Repealing Obamacare is Possible

NPR this morning ran a segment on the supposed difficulties that might be involved in repealing Obamacare. Folks who are interested in this question might want to check out a piece I wrote for NRO back in October 2011 laying out the steps involved in using a reconciliation bill in 2013 to repeal Obamacare (assuming Republicans keep control of the House, pick up a majority in the Senate, and take the White House). As the NPR reporter noted, some parts of Obamacare have already gone into effect, and repealers would have to decide which of those to keep intact. But the most significant and expensive components of the legislation certainly could and should be repealed in 2013.

posted by James C. Capretta | 5:53 pm
Tags: repeal, replace, reconciliation
File As: Health Care

The Reconciliation Option

Over at National Review Online, I have a new column up on a special budgetary procedure known as “reconciliation,” which was mentioned by Mitt Romney and Rick Santorum at last Tuesday’s Republican presidential debate as an option for repealing Obamacare:

If, in the 2012 election, Republicans are able to maintain control of the House, pick up the majority in the Senate (a real possibility) but not a 60-vote supermajority, and win the White House (looking more possible by the day), the GOP would be in position to set in motion a reconciliation bill to repeal and replace Obamacare — and they wouldn’t need any Democratic cooperation to make it happen. The fact that leading Republican presidential candidates have now said that reconciliation is an option is a big deal, as it makes it very clear to all concerned that there is a clear path to victory for Obamacare opponents.

Seeing the threat that the reconciliation option could pose, Obamacare’s apologists have responded by suggesting it would be the height of cynical partisanship for Republicans to undo Obamacare in this fashion, since reconciliation supposedly played only a minor role in the enactment of Obamacare. Obamacare’s defenders also claim that, in any event, the GOP may not be able to pull it off because some aspects of Obamacare are non-budgetary and therefore aren’t eligible for repeal in a reconciliation measure, which is supposed to deal exclusively with budgetary matters. Sen. Kent Conrad, the Democratic chairman of the Senate Budget Committee, took the argument further and said that using reconciliation for repeal would be inappropriate because reconciliation is supposed to be used fordeficit-cutting efforts — and Obamacare’s full repeal would increase the deficit, according to the Congressional Budget Office (CBO).

As usual, there’s a lot of smoke and misdirection in these arguments, and not much clarity....

You can read the whole column here.

posted by James C. Capretta | 1:01 pm
Tags: Obamacare, repeal and replace, reconciliation
File As: Health Care

The Democrats’ Tangled Web

In 2009, Democrats chose to proceed with a health-care bill under the regular order — that is, they sought to pass the legislation under normal House and Senate rules. They did not put together a budget reconciliation bill with health care in it, something that could have passed the Senate with a simple majority vote. They conceded that such an approach would likely produce a flawed product, as many non-budgetary provisions in a health-care plan would not survive the reconciliation process. And so they decided to try and pass a bill without resorting to reconciliation, even though they knew they would need sixty votes in the Senate to succeed. It worked. They passed a bill in the House in November, and a somewhat different version in the Senate in December.

Then came Scott Brown. His stunning election to the Senate on January 19 upended the Democrats’ end-game. They were going to work out the differences between the House and Senate-passed bills in January and proceed to pass an agreed-upon version in both chambers as expeditiously as possible. But that plan was contingent on getting sixty votes again in the Senate. With Brown’s election, Senate Republicans increased their numbers from forty to forty-one, thus forcing Democrats to find at least one Republican Senator to support their final bill.

For the past two months, the White House and Democrats in Congress have been weaving ever-more complicated legislative webs all with the express intent of avoiding at all costs any need to negotiate with the now slightly enlarged Senate minority. In effect, what Democratic leaders want to do is — at the very end of the legislative process — switch from regular order to a reconciliation process in order to avoid having to deal seriously with any elected Republicans.

But it’s become increasingly clear that the Democratic scheming and maneuvering necessary to pull off such a high-wire act has created a web of entanglements that could very well doom passage of the entire effort.

In particular, there now appear to be two huge hurdles standing directly in the way of a plan to jam a bill through in the coming days.

First, there is the matter of the liberal abortion provisions in the Senate bill. As the Catholic Bishops conference has noted, the Senate-passed bill includes several provisions that would allow taxpayer funding of elective abortions. Consequently, the Bishops opposed passage of that bill when it was considered in the Senate, and now oppose its passage by the House. The problem for House Democrats is that every version of the end-game they are now considering is predicated on having the House take up the Senate bill and pass it unchanged for presidential signature.

That is entirely unacceptable to the Catholic Bishops. They oppose House passage of the Senate’s pro-abortion health bill. Period. And their opposition hasn’t come with procedural loopholes that would let members off the hook if they promised to pass a fix separately. That would be fool’s bargain, and the Bishops know it. So pro-life House Democrats, led by Congressman Bart Stupak, really have no choice here. They can’t support the Senate bill unless they want to be known for supporting the most pro-abortion bill ever considered in Congress. Their only real option is to force House leaders to amend the Senate bill before passing it to include strong restrictions on funding of abortion. Yes, that would mean the bill would have to go back through the Senate again before going to the president, but so be it. That’s not the Bishops’ problem. It would mean the president and the Democrats would have to really negotiate to get some Republican support, which is of course the norm for sweeping and important legislation.

The Democrats’ problems don’t end with abortion, though. Today, the Senate parliamentarian confirmed to Republican members that the Senate health-care plan must first be signed into law by the president before the Senate can take up a reconciliation bill making changes to it. This is the House Democrats’ worst nightmare. That means they can’t pass and hold the Senate health bill pending clearance by the Senate of a reconciliation bill making fixes. If the House votes to approve the Senate bill, that’s it.  The Senate bill will become law, signing ceremony and all.  Congress may or may not follow through by amending it later. In the meantime, House members will have voted to approve the Cornhusker Kickback, the Louisiana Purchase, the special treatment for Florida seniors, countless special deals for hospitals, a new tax on many collectively bargained health plans, not to mention a massive tax increase, Medicare cut, and job-killing mandates.

In short, if congressional Democrats are bound and determined to pass a sweeping government takeover of American health care on an entirely partisan basis, their only way forward is for the House to accept without change the highly unpopular Senate bill, and suffer the consequences. That will be a very bitter pill for many rank-and-file members to swallow.

There is an alternative, however. The White House and House and Senate Democrats could abandon reconciliation, fix the problems in the Senate bill, and then work with some Senate Republicans to produce a plan that can get a supermajority in the Senate. No doubt it would require more than cosmetic changes to the government-heavy plan Democrats have drafted. But it is not impossible. It has been done countless times before on major legislation. And it is certainly what the public is telling their elected leaders they want to see happen.

If, however, the Democrats continue to insist it’s their bill or no bill, the odds are increasing by the day that it will be no bill.

posted by James C. Capretta | 5:53 pm
Tags: reconciliation, Senate bill, House bill, U.S. Conference of Catholic Bishops
File As: Health Care

The Democrats’ Contorted and Implausible End-Game

Over the past year, many commentators have noted that the Democratic party has invested so much in the health-care effort that Team Obama would do just about anything to get a bill to the president’s desk. We are now witnessing the depths to which the administration is willing to sink to do just that.

What would appear to be the final episode in this long-running saga apparently commences tomorrow. We are told that the president will unveil yet another health-care plan while delivering yet another health-care speech in Washington. This latest presidential offering is being advertised by House Speaker Nancy Pelosi as “much smaller” than the bill the House approved last November.

But how will it be “smaller”?

Here, it is crucial to understand the process Democrats have now apparently settled on for the end-game.

For a time, House Democrats, including the Speaker, were arguing that the House could hold off approving the Senate-passed bill until after both chambers approved a series of “fixes” using the budget-reconciliation process. Once the reconciliation bill was cleared by Congress, the House would then approve the Senate-passed health-care bill, and both bills would then go together to the president for his signature. The final plan would then be a combination of the Senate-passed version of health-care reform as amended by the reconciliation bill, with both becoming law at the same time (the Senate’s health-care bill would presumably get signed first).

But this scheme was always built on the flawed assumption that the reconciliation process could carry a bill through to passage that is essentially a series of amendments to something that is not yet in law — namely the Senate-passed health-care bill, now being held in the House. The problems such contortions would raise are so numerous that it was always implausible Congress would head down this path.

For starters, the Congressional Budget Office (CBO) assesses the budgetary impact of bills by comparing them to current law. To buy off House liberals, the president’s proposal from last week called for upping the premium subsidies provided in the Senate bill. It might be possible to draft a sensible rewrite of the Senate bill’s subsidy sections and put it into a separate piece of legislation. If such a provision were in fact signed by the president after he signed the Senate health-care bill, then it would take precedence and override what’s in the Senate bill. But how in the world could CBO score such a provision for purposes of consideration in Congress? Current law has none of the Obamacare architecture that would make the subsidy program operational. Most especially, there’s no government-run insurance exchanges to even administer the subsidies. Nor is there a government-determined benefit package to set the boundaries for calculating the value of the premium assistance. In such a context, it would be all but impossible for CBO to produce a sensible cost estimate.

Senate Budget Committee Chairman Kent Conrad apparently saw the unholy mess that would unfold if this gambit were actually tried and decided to head it off at the pass. Last week he announced, rather definitively, that for the whole reconciliation-to-fix-the-Senate-bill scheme to work, the House would first have to approve the Senate bill and send it to the president for his signature. In other words, the Senate’s health-care plan must become law before any next steps are taken.

And that puts us back to where we were when Scott Brown stunned the political world with his election victory on January 19. If the Democrats are determined to press ahead with a government-takeover of American health care in spite of widespread public opposition, then House Democrats will have no choice but to approve the Senate-passed bill before doing anything else. Period.

Then, and only then, could the House and Senate take up a reconciliation bill to amend it. Democrats are apparently looking at a timeline that would have the House pass the Senate bill by mid-March, followed by two weeks of pushing a reconciliation bill through both chambers.

Is this scenario at all plausible?

Start with the prospects of House passage of the Senate health-care bill. The Speaker’s description of what the president will propose tomorrow as being “smaller” than what Congress has been considering to date is all spin aimed at generating some renewed interest among those moderates and conservatives in her caucus who voted no the first time around. She almost certainly needs several of them to switch their votes if she is to have any hope of passing something, and they have all expressed the desire to proceed with a “smaller” measure.

But what she will be asking them to approve is anything but small. As everyone who watched the Blair House meeting now knows, the Senate-passed bill is very lengthy, clocking in at 2,400 pages. That’s because it reflects the liberal ambition to rewrite American health care from top to bottom. It stands up another runaway entitlement program, which CBO says will reach $200 billion by 2019 and grow 8 percent every year thereafter. It would impose massive tax increases and job-killing mandates on employers. It would apply arbitrary, across-the-board cuts in Medicare’s provider-payment rates that the chief actuary of the program says will push many institutions into financial distress. It would, for the first time, ask federal taxpayers to pay for elective abortions, including through Community Health Centers.

And to top it off, the bill the House would have to approve first would still include all of the egregious deals struck with individual Senators to buy their votes for passage in December. The special Medicaid arrangement for Nebraska. The exemption of Florida seniors from the Medicare Advantage cuts. The $300 million for Louisiana. Those, and many others, are all in the Senate-passed bill that Speaker Pelosi will be trying to sell in coming days.

Of course, the Speaker will tell these members, don’t worry, the reconciliation bill will fix all these problems. But will it?

If anything, what the president is now pushing, and will presumably push again tomorrow, would make the Senate bill even more expensive, by upping the premium subsidies, closing the Medicare “donut hole,” and giving all states the same deal as Nebraska. These added costs would be paid for with an entirely new Medicare payroll tax, applied to investment earnings. In other words, just days after voting for a highly controversial, trillion-dollar health-care bill, House Democrats would be asked to vote for a reconciliation bill that taxes and spends even more. And then that measure would go to the Senate, where there are never any guarantees that something will emerge unscathed.

It’s hard to see how any of this would be reassuring to House Democratic moderates or conservatives. If they switch their votes to “yes,” they will rightly be seen by voters as putting a risky government takeover of American health care over the top. Plain and simple.

And there are alternatives. President Obama himself has drafted a scaled-back “Plan B.” If sensible House Democrats stand their ground and refuse to go along with the contorted and implausible partisan scheming of their leaders, it will lead to a much better outcome for the country.

posted by James C. Capretta | 5:05 pm
Tags: reconciliation, White House plan
File As: Health Care

‘Reconciliation’ Talk Reveals Democratic Desperation

House Speaker Nancy Pelosi and many of her allies outside of Congress have spent the past week trying to convince rank and file Democrats and others that Obamacare need not be dead if only the party had the will to pursue what might be called the “reconciliation solution.” Indeed, the Center on Budget and Policy Priorities recently circulated a short white paper aimed at bucking up Democrats on the reconciliation option. The authors argue that using the budget reconciliation process — which effectively means legislation can pass in the Senate with a simple majority instead of sixty votes — to approve a massive health-care bill is entirely consistent with prior practice.

And, it is true that the budget reconciliation process has been used to pass significant pieces of budgetary legislation in prior years, including welfare reform, tax cuts, and scores of important changes in the Medicare and Medicaid programs.

But there’s a big difference between what’s been done in past and what Democrats are trying to convince themselves to do this time around. Those reconciliation bills made amendments to current law. What the Democrats are now contemplating is something entirely different and totally bizarre: they want to try to pass a reconciliation bill which amends another bill which has not yet been approved by Congress.

Here’s the scenario they have laid out: The Senate has passed a bill, which is now sitting on the House side awaiting action. As the Speaker has implicitly admitted, in the wake of Scott Brown’s election to the United States Senate, Democrats have run for the hills on health care. There aren’t nearly enough votes in her caucus today to pass the Senate bill as it stands, and there’s a real question about whether they could even pass the bill they already adopted last November.

But the Speaker says today’s impasse need not be the last word on Obamacare. According to this way of thinking, it might be possible to pass the Senate bill a little later this year if the Senate would just agree to first pass a bill providing a series of amendments to the previously-passed Senate health-care plan. Those amendments would be considered under the special rules governing budget reconciliation measures, which means no filibuster. There would be only twenty hours of debate, and then it would come to a vote on final passage. If Senate Democrats could hold just 50 of their 59 Senators (the vice president can break 50-50 ties), they could pass it, or so the theory goes. Once the Senate cleared such a measure, House Democrats would then supposedly feel comfortable going ahead and voting to approve the Senate-passed health-care bill because another bill would be following right behind it to make politically crucial amendments. The president and the Democrats would then get their “historic” signing ceremony after all, only there would be two bills to sign instead of one (more pens for everyone!).

That the White House and congressional Democrats are even thinking and talking this way is an indication of how far they have fallen. They are clearly desperate, so desperate in fact that they are willing to float any kind of half-baked and far-fetched scenario in the press if it has even a remote chance of breathing life into the rapidly expiring corpse of Obamacare.

But this reconciliation gambit is so full of holes and such a perversion of the process that it’s hard to imagine anyone taking it seriously. For starters, the baseline for assessing such a reconciliation bill would be current law, which would not include the Senate health-care plan still sitting in the House chamber. You can’t pretend something is already in law if it isn’t. And so, when the Congressional Budget Office assessed such a bill, they would have to assign costs based on what it would do relative to today’s tax and entitlement structure, not some fictitious baseline that assumes passage of the Senate bill.

Moreover, any provision in a reconciliation bill that does not change tax receipts or budgetary spending can be stricken from it with just 41 votes in the Senate under the so-called “Byrd Rule.” The rule was adopted by the Senate more than two decades ago to limit the kinds of provisions that could ride on a budget reconciliation measure to those that actually make non-trivial changes to the federal budget. But if a reconciliation bill includes numerous amendments to another bill which is not even law yet, the whole bill or large portions of it could be irrelevant budgetarily, and therefore “Byrd”-able. For instance, the Senate-passed health-care bill includes the so-called “Cadillac insurance tax,” which raises about $150 billion in revenue over ten years. House Democrats want to exempt union-sponsored insurance plans from the tax through 2017. But if such an exemption were included in a Senate reconciliation bill, it would not change federal revenues because the underlying tax it is amending would not yet be in the law.

Clever lawyers and budget experts are almost certainly working overtime to see if they can find a way around what would seem to be fundamental obstacles to such a scenario. But even if they could, the idea that the Congress could employ such a distorted process to ram through a government takeover of American health care, in the wake of what happened in Massachusetts, is itself far-fetched. Rank-and-file Democrats have lost their stomach for this fight. They don’t want to push legislation they know their constituents have rejected, and implausible war-gaming by their leadership isn’t going to convince them to change their minds.

posted by James C. Capretta | 6:17 pm
Tags: reconciliation, Cadillac tax, Senate
File As: Health Care

The Baucus Employer Mandate and the Democrats’ Strategy

The Washington Post has another piece in today’s paper — there seems to be about one per week — on the ever-so-close “bipartisan plan” being negotiated by Senate Finance Committee Chairman Max Baucus and five of his committee colleagues.

Among other things, the Post provides a side-by-side analysis comparing the Finance Committee “plan” — though no one has really seen it yet — to the bills approved by the House Energy and Commerce Committee as well as the one approved by the Senate Health, Education, Labor, and Pensions Committee. According to the Post, the emerging Baucus proposal will not include an employer mandate. Rather, it will impose a “free-rider” penalty on employers whose workers end up getting subsidized coverage through the so-called “exchanges.”

As I have written previously, this is a distinction without a difference. The Baucus plan would require employers to provide some level of coverage acceptable to the federal government or pay a tax to partially cover the costs of premiums for workers with incomes below 300 percent of the poverty line. Any way you look at it, that’s a “pay or play” employer mandate.

The reason for the semantic game is politics, of course. Senator Baucus is desperate to get the sign-off of the three Republican negotiators in the gang of six — Senators Grassley, Enzi, and Snowe — and they don’t want to be accused of supporting a job-killing “employer mandate” with unemployment heading toward 10 percent nationally. And so the “free-rider” penalty is peddled as a non-mandate “responsibility” provision.

The only real difference between what Senator Baucus is trying to do and the emerging House bill is that the Baucus mandate wouldn’t apply to workers with incomes exceeding 300 percent of the poverty line. They wouldn’t be eligible for the subsidy program, and so employers wouldn’t face a penalty for not offering them qualified coverage.

Normally, liberals do not worry too much about the job-killing impact of employer mandates and taxes, but the Baucus plan’s differential treatment of workers by income is so transparently regressive that the Center on Budget and Policy Priorities (CBPP), a liberal-leaning think tank, and the Leadership Conference on Civil Rights have begun sounding the alarm that it would discourage the hiring of low-wage workers and minorities. As reported in National Journal’s CongressDailyAM (subscription required), Wade Henderson, the Leadership Conference president, said the Baucus plan “creates a powerful incentive for employers to fire or not to hire the very people healthcare reform is supposed to help.”

So will these groups oppose the Baucus plan and force the committee to go back to the drawing board? Apparently not. CBPP President Bob Greenstein said in the same CongressDaily story that he expects the Finance Committee to approve the Baucus mandate but hopes it will be changed down the road. In other words, he doesn’t want to slow down the Baucus process but is confident that House Democrats will never go along with the Baucus approach if they aren’t forced into it.

Which raises another question: What exactly are Senators Grassley, Enzi, and Snowe negotiating, anyway?

It is beyond obvious that what the Obama administration and most Democrats desperately want from the “gang of six” is “to keep the process moving.” They don’t view the product of the Baucus negotiations as the final word by a long shot. They just want to get it over with. In fact, Greenstein’s comment that the Baucus mandate can be fixed later is indicative of the prevailing sentiment among Democrats. If they can just get past the Finance Committee, they surmise, political momentum will build, and a final bill will become all but inevitable. At that point, the only question will be about “what” not “if,” and Democrats would control all of the details in a conference between the House and Senate.

In recent days, Senate Democrats have suggested that if the Baucus negotiations don’t make progress soon, they just might try to pass health-care on an entirely partisan basis in the Senate, using the so-called “reconciliation” procedure. That would allow them to pass a bill with a simple majority instead of sixty votes. They might be able to do so. After all, there are sixty Democrats in the Senate. But, then again, such a bill would carry a lot of political baggage. More than $1 trillion in new spending over the coming decade and growing obligations in the years following, new costly requirements on low-wage workers to buy insurance without any additional financial support, new taxes on the middle class, deep cuts in Medicare benefits, job-killing mandates in a recession, and, of course, a government-run option that would displace private coverage for tens of millions of happily insured Americans.

Indeed, the threat by Democrats to move a bill under reconciliation seems really to be just that — a threat intended to force Senators Grassley, Enzi, and Snowe to agree to something, anything, to keep the process moving. Which is why Senate Republicans should ignore it entirely. If Democrats really thought they could pass a government-takeover of American health care over the unified objections of Republicans, they probably would have tried to do so already. The public is already uneasy about what is being considered in Washington. The last thing they want to see is a partisan bill passed with limited debate in a highly charged environment.

No, it remains the case that it will be exceedingly difficult for the Democrats to try to pass a bill without any Republican support, especially in the Senate. Which means, for Republicans, the trick is to stick together. If they do, they will wield much power over whatever happens.

posted by James C. Capretta | 5:22 pm
Tags: Max Baucus, mandate, reconciliation
File As: Health Care