The reconciliation insurance policy

THE RECONCILIATION INSURANCE POLICY…. I was talking to a Senate aide this week, trying to wrap my head around the details of the reconciliation process. The staffer conceded that she, too, can get tripped up on how reconciliation works.

It comes up from time to time, and in light of recent events, it’s becoming more of an issue all the time. Reconciliation, in the most general sense, allows legislation to be voted on, up or down, sidestepping a filibuster. In the context of health care reform, that matters a great deal — even if some center-right Democrats in the Senate sided with Republicans on reform, if proponents simply needed a majority vote, the bill would very likely pass no matter what Nelson, Bayh, Lieberman, and Landrieu thought. It’s why reconciliation language was added to this year’s budget a few months ago.

There is, however, quite a bit more to it than that. The NYT‘s Carl Hulse considers the reconciliation question, which is apparently about as convoluted as the reform proposal itself.

[Sen. Kent Conrad (D) of North Dakota], who is one of the Democrats bargaining with Republicans, has been advising that fashioning a health care plan under byzantine reconciliation rules is a bad idea. From his perspective, a major impediment is the fact that the plans devised by the Senate finance and health panels would have to produce $2 billion in savings over five years and not add to the deficit after that.

Considering the upfront costs of trying to bring all Americans under the health insurance umbrella, and the fact that some of the structural health care changes that lawmakers are eyeing might not produce immediate savings, the deficit rules could severely limit the scope of a bill.

“You would have a very difficult time getting universal coverage in reconciliation,” Mr. Conrad said.

And that is just the beginning. Under the Congressional Budget Act of 1974, reconciliation bills were given special Senate protection and allowed to pass by simple majority votes, after limited debate, to give senators the ability to make the kinds of tough decisions required to cut the deficit.

At the same time, Senator Robert C. Byrd, Democrat of West Virginia and longtime protector of the prerogatives of the Senate, created a complex set of rules intended to impede those who would dare to use reconciliation to rewrite federal policy rather than produce budget savings.

Under the Byrd Rule, provisions where the fiscal consequences are “merely incidental” to the true intent of the legislation can be struck from the bill unless 60 senators vote to waive the rule. Reconciliation measures are traditionally scoured for such provisions, in what is known around the Senate as giving the bill a “Byrd bath.”

Because Republicans would most likely be so incensed that Democrats were trying to force through a sweeping health plan by simple majority vote, they would no doubt challenge many elements of the bill and could strip them out.

Reform advocates could, in theory, work around the Byrd Rule, but that would require still more procedural acrobatics.

That said, Hulse reported that Senate Democrats, unsure of what’s likely to happen, are talking “reluctantly” and “very, very quietly” about the reconciliation possibility, looking at the tactic — which Hulse said is “doable” — as a “last resort.”

In other words, if it’s a choice between reconciliation or failure, some reform advocates think the choice is obvious. A former budget expert for Senate Republicans who now works for a health insurer, concluded that reconciliation is the Democrats’ “insurance policy for health reform.”

Mark Schmitt had a good item on this, too, this week.