Senate


‘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

From Awful to Worse

In the new Weekly Standard, I have a piece co-written with my New Atlantis and EPPC colleague Yuval Levin. We discuss how Harry Reid's latest proposal is even worse than his original one. An excerpt:

Apparently, in exchange for dropping the "public option," moderate Senate Democrats have tentatively agreed to open up Medicare to people age 55 to 64 (retirees can currently sign up for it at age 65). In other words, rather than build on the failed cost-control model of Medicare, they now want to actually further burden Medicare itself. Why take a roundabout path to failure when a direct one is available? The irrationality of this solution is staggering. But, of course, it's a solution to Reid's political problem, not to the nation's health care financing crisis. Moderate Senate Democrats don't want to vote for anything called a "public option," but some of Reid's more liberal colleagues won't give up the dream of marching toward a single payer health care system. So he has offered up an even more direct path to such a system, but given it a different name and frame than the "public option."...

According to the Census Bureau, only 4.3 million people age 55 to 64 were uninsured in 2008. But the total population in this age range was 34.3 million--so the Medicare buy-in is not a means to help the uninsured but a means to socialize the health insurance of a vast swath of the public.

Initially, a voluntary Medicare program might attract only a small number of enrollees, especially because those who opt in would be required to pay the full premium. But over time, employers would likely find it convenient to put their early retirees into Medicare to shed some of their costs, providing only wraparound coverage as they do for retirees over 65. Once the opt-in is established, moreover, pressure would build for Congress to ensure "premiums" are affordable. Directly or indirectly, the government would find ways to subsidize enrollment. If established, a Medicare option for the 55- to 64-year-old population would quickly become the default option for the entire age group, and a case for further lowering the age of eligibility would emerge.

And when that happens, those who have fought all year against a new government-run insurance plan will have lost the battle, and those seeking means of actually cutting the growth of health care costs will pretty much have lost the war. The Reid bill already assumes a 15 million-person jump in enrollment in Medicaid, bringing the total enrollment to 60 million Americans. If 20 to 30 million new people end up on Medicare, on top of Medicare's current 45 million enrollees, then more than one-in-three Americans would be covered by government-funded health insurance. A single-payer health care system would be all but inevitable.

The entire piece is here.

Meanwhile, I recently discussed the unfolding Senate process in an interview with The New Ledger; you can hear the podcast here.

posted by James C. Capretta | 11:09 am
Tags: Medicare, Harry Reid, Senate, Yuval Levin
File As: Health Care