DC Deciphered

You can’t hurry love (or so the old song goes), but can you hurry health care reform?* Republicans are hoping the answer to that question is yes.  But why are they in such a hurry to get it done??  The answer is not what you think.  Or, at least, it’s not only the reasons that you think.

Yes, part of the reason they’re in such a rush is that they were hoping to sneak a bill through before the public had time to learn what was in it & push back against it. (Thankfully thousands of really great, dedicated activists around the country made sure this ploy didn’t work out).  And yeah, there’s also the fact that Trump and numerous other Republicans promised that repeal would happen on “day one” once they were in control of Washington.  So they’re eager to show their voters that they’re making good on that promise.  But those aren’t the main reasons Republicans are in such a hurry to get health care done.

The main reason Republicans are in such a rush is that any delay on health care reform threatens Republicans’ true top priority: major tax reform.**  More specifically, it threatens their ability to pass tax reform on a purely partisan basis using reconciliation.  By now, everyone who is tuned into the health care debate is probably familiar with the term “reconciliation.” You know that the GOP is using this procedure – reconciliation – in order to be able to pass their bill through the Senate with only 50 votes (plus VP Pence), preventing a Democratic filibuster of the bill.  And maybe that got you thinking: if reconciliation makes it so much easier for the majority party to pass a bill without having to deal with the other side, why isn’t it used more often??

Well, it’s because reconciliation isn’t a procedure the Senate can just pluck out of thin air to use any time it wants.   Reconciliation is not a standalone procedure – it actually only happens as part of the yearly budget process.  So normally this means that reconciliation can only be used once a year when a budget resolution is passed.  A budget resolution is the first step in the congressional budget process.  It’s where Congress basically lays out a blueprint or guideline for the budget.  But the budget process is not complete until later, when Congress actually passes bills appropriating the funds. It’s in this first step – the budget resolution – where the Senate may include a set (and one set only) of “reconciliation instructions” that allows them to later pass something through reconciliation.

Okay, so that seems fairly simple so far: pass a budget, pass a health care bill – just finish it up by the end of the year which is still months away, right? (The fiscal year starts October 1).  Well, as Stan Collender (who is the guru when it comes to the congressional budget process) has been explaining in a collection of articles going all the way back to November of 2016, it’s actually not that simple.  The reason for that is – Republicans’ partisan ambitions are not limited to health care reform.  They also plan to pass their massive tax reform bill through the Senate with all Republican votes, i.e. by using reconciliation.  And they also plan to do it this year.  But how is that possible when I just told you that reconciliation can only be used once a year?

This is one of those instances where GOP obstructionism & gridlock was more devious than we even realized at the time it was happening.  Republicans never passed a budget resolution for 2017, which should have been done last year.  That meant that they were permitted to pass a 2017 budget this year, after Trump and the new Republican Congress were sworn in.  And they did just that in January.  It is that 2017 budget that they are using for the health care bill reconciliation.  They’ll use an upcoming 2018 budget resolution for the tax reform reconciliation. Two reconciliations in one year, two major reform bills passed into law this year, just as the President promised.  At least, that was the plan anyway.

As Collender notes in his article explaining the plan, it is unprecedented for reconciliation to occur twice in one year.  It has literally never been done in the 40+ years that Congress has operated under this budget process.  And hopefully it’s going to stay that way.  See, here’s the kicker:  Republicans can’t move on to the 2018 budget & their tax reform bill until they are completely finished with the health care bill.  The rules of reconciliation say that the once a new budget resolution is adopted, the previous one is no longer in effect.  In other words, there cannot be two sets of reconciliation instructions in effect at the same time.  So if the GOP were to get started on passing the 2018 budget & tax reform, that would put an end to the reconciliation instructions from 2017, i.e., the ones they are currently using to pass health care.

The original GOP plan was the have health care long done by now, to pass the second (2018) budget resolution in May or June and to already be well at work on the 2018 budget and the tax reform bill.  Obviously things are not going according to plan.  Because they are stymied on health care, they have not even been able to pass the 2018 budget resolution or get much movement going on tax reform (the committees are in the planning stages behind the scenes, but this is far from where they hoped to be on both the budget and taxes). So the GOP is already behind schedule.

And unless they can finish health care within the next couple of weeks, they will have to decide whether to abandon it and move on to tax reform or to stick with health care and put off tax reform until next year.*** (An added hitch:  tax reform becomes much more difficult if there’s no health care bill, which is why they didn’t just begin with tax reform in the first place).

But tax reform is the most crucial item on the GOP agenda.  Cutting taxes has obviously long been an ideological imperative for the party and for many of its top donors, but getting this done is also vital for this President because tax cuts are the top priority for the business community.  For many in the business world, the promise of tax cuts is the main reason they’ve been willing to give Trump a chance.

Though many on Wall Street have already given up hope of it happening this year and have started looking ahead to 2018, it’s unclear how long their patience with Trump will continue if they don’t start to get positive signs on this issue.  There is also recent reporting that some of Trump’s top advisers will leave the White House if tax reform fails to go through in the first year as well.

So it is this desire to push through two massive policy reforms on a purely partisan basis in an entirely unprecedented manner – and the very tight timetable for doing so – that is the true reason behind Republicans’ great rush to get health care reform completed.  But it seems Republicans may now be discovering that just like love, health care reform don’t come easy.

*****

Notes:

*Let’s stipulate that what Republicans are trying to do isn’t actually so much to reform health care as it is to undo the reforms made by Democrats.  But it turns out to be quite complicated to get 50 Senators to even agree on how to do that, especially when at least a few of them appear to have qualms about causing tens of millions of people to lose their health coverage.

**Let’s also stipulate that “tax reform” mostly means corporate & upper income tax cuts.  And yes, this is in addition to the significant tax cuts included in the GOP health care bill, which are mostly directed to the same constituency.

***There’s no requirement that Congress passes a budget for 2018.  They can delay the budget and do what they’ve been doing for many years now, which is to rely on “continuing resolutions,” where spending levels just remain where they are.  But conservatives – who are always looking to cut government spending & now finally thought they had their chance with Trump in the White House – would not be happy with that outcome.

****This is a little bit far into the weeds, so I didn’t include it in the main post, but technically, each set of reconciliation instructions can be used for 3 separate bills covering 3 specific subjects, one bill each for: spending, revenue, and debt limit.  Or those subjects may be combined into only one or two bills.  In our case, the GOP health care bill will cover both spending and revenue in one bill.  (And the debt limit bill will be used in the near future to raise the debt limit).

So in that sense, there can regularly be more than one bill passed using reconciliation in a single year, but all would stem from only one set of reconciliation instructions, i.e. they are all part of the same reconciliation.