Al Franken’s victory brings Democrats’ number in the Senate to 60, and has everyone thinking about how they can now defeat potential Republican filibusters against cap-and-trade and health reform. But why go through all the trouble of getting 60 when you can do just as much with 50?
The process of budget reconciliation is extremely complicated. The part that most Washington-watchers understand is that bills passed under it cannot be filibustered in the Senate — they require only a simple majority. The purpose of reconciliation, supposedly, is to adjust federal spending and revenue levels. But this is nearly always a pretext.
The original idea behind reconciliation in the 1970s was to use it as a tool for balancing the budget. As the process has evolved and been corrupted, budget reconciliation has instead become a tool for making substantive policy changes under the guise of revenue and spending changes, so as to avoid having to get 60 votes in the Senate.
The rules are simple: The budget must first contain instructions (as this year’s budget does) for the appropriate committees to find a tiny nugget of net savings, as little as a billion dollars or less. And then Congress makes plans to raise a massive sum, and plans to spend just slightly less, so as to produce those net savings.
A billion-dollar tail wags a trillion-dollar dog.
Republicans used this tool to cut taxes in 2001, and they tried to use it to lease a small portion of the Arctic National Wildlife Refuge for drilling (which would have raised revenue). Democrats have used it to raise taxes, as with President Clinton’s famous 1993 bill.
So how can reconciliation be used now? Frankly, any way the Democrats want to use it.
Disregard the rhetoric you hear this summer about the White House or Congress “preferring regular order” — you might have heard it from Robert Gibbs on Monday, but don’t believe it. Watch instead how Obama and the Democrats in Congress prepare for this fall. They can save themselves a lot of arm-twisting if they just use reconciliation for health care, or for cap-and-trade — or for both.
Whatever destruction it causes the economy, the cap-and-trade bill creates a small budget surplus for the government — $3.8 billion over the five-year budget window, according to the Congressional Budget Office. (They reach this number through some odd accounting that deserves a separate analysis). That’s nearly enough in savings already to meet the conditions in this year’s budget reconciliation instructions.
The budget instructions specifically mention “health care reform” in a section header, but that means nothing. Democrats can exploit the reconciliation instructions any way they like, as long as the appropriate committees find the proper amount in net savings ($4 billion in the House, $2 billion in the Senate). And given the massive price tag with which CBO has saddled health reform, cap-and-trade is a much easier target for reconciliation this year.
No one is discussing it now, and it may seem like a remote possibility, but it is a possiblity all the same. Do not believe the early proclamations that Waxman-Markey is dead in the Senate for lack of 60 votes, because it may not need 60 votes.
