Budget Reconciliation and Health Care Reform

Despite the assumption by Republicans that they represent a majority of the American people, the Democrats hold a majority of the seats in Congress. Up until now, buoyed by the lavish spending of health insurance companies, the Senate Republicans have been able to stall health care reform. Lately, however, there has been a shift in the polls. The public is increasingly indicating support for health care reform and for President Obama.

One major distortion spread by the Republicans is that the bill will vastly increase budget deficits. The Congressional Budget Office has ruled, however, that the Senate bill will actually reduce budget deficits. This is because the bill is essentially a budget bill. Due to Republican recalcitrance, the Democrats are now forced to use a procedure designed specifically for budget matters. It is called “Budget Reconciliation.” Now that they’ve passed a health care reform bill, the Senate Democrats plan to use budget reconciliation to pass the final changes to the bill.

Republicans threaten that if the Democrats use budget reconciliation to pass the health care reform bill it will be “all-out war.” I would like to know what they consider their wall-to-wall obstruction, distortion, and filibustering to be if not all-out war against President Obama and the Democrats.

Budget reconciliation is a legislative process of the Senate intended to allow consideration of a contentious budget bill without the threat of filibuster. Reconciliation generally involves legislation that changes the budget deficit. Any senator may raise a procedural objection to a treating a bill as a reconciliation bill. His objection will then be ruled upon by the Presiding Officer, who is officially the Vice President. The Presiding Officer customarily rules on the advice of the Senate Parliamentarian, but need not follow that advice. A vote of 60 senators is required to overturn the ruling of the Presiding Officer. Once the presiding officer rules that a bill is a budget reconciliation matter, the bill cannot be filibustered and requires only 51 votes of the full senate, or a majority of those present, to pass.

In case you question whether the health care reform bill is a budget measure, consider the fact that there are a large number of provisions in the bill dealing with revenue. There are several provisions imposing additional taxes on high-income individuals and couples, including Section 1905, which increases the Medicare tax on wages of individuals making in excess of $200,000 and married couples making over $250,000. There is an excise tax on voluntary cosmetic procedures, an increase in the adjusted gross income threshold for claiming an itemized deduction on medical costs, and a tax on the health insurance industry. These and other taxes will not only cover the cost of health care reform, but will actually reduce the overall deficit.

It is with ill grace that the Republicans object to the use of budget reconciliation to pass bills affecting the budget. They made repeated use of it when they were in power. Republicans used it to pass the 1996 Welfare Reform bill. They used it to pass the Jobs Growth and Tax Relief Reconciliation Act of 2003, in which Bush cut taxes for the rich and helped abolish the surpluses created during the Clinton years. Those tax cuts were strongly opposed by the Democrats, and by 450 economists, including 10 Nobel Prize Laureates. Another reconciliation bill by the Republicans was the Deficit Reduction Act of 2005, which slowed the growth in spending for Medicare and Medicaid, and changed formulas for student loans and other programs.

President Obama tried to change the environment in Washington and to work with the Republicans. He honestly believed that the relationship between the parties was far too poisonous and that this was bad for the country. The Republicans decided to rebuff his every effort. Now the Democrats have to act alone.