John McCain’s shocking decision to oppose “skinny repeal” — the most recent Senate Republican effort to roll back Obamacare — immediately bought him considerable goodwill among rank-and-file Democrats. But in some ways, it was a surprising choice: He had just returned to Washington from cancer treatment to vote in favor of a motion to proceed on Obamacare repeal efforts. Yet just a few days later, he was opposing the legislation.
Some of McCain’s liberal sympathizers came up with a compelling story to explain it: By voting for the motion to proceed, and against the actually skinny repeal proposal itself, McCain had blocked Republicans from using budget reconciliation to pass any legislation in 2017. In this telling, McCain didn’t just block the health care proposal he voted against — he made it impossible for Republicans to repeal Obamacare while avoiding a filibuster, because any additional health care plans would need 60 votes in the Senate. Here’s a version of the highly viral Reddit post that explained this theory:
The only problem is that none of this is true. Republicans’ plan to use budget reconciliation to pass health reform and tax reform still works, as a matter of Senate rules. They can still move legislation with only 50 votes.
None of the health proposals rejected in the Senate — not the Better Care Reconciliation Act (BCRA) (the repeal-and-replace plan that Republicans had been crafting for months), nor Obamacare Repeal Reconciliation Act (which would have entirely repealed all the coverage and tax parts of Obamacare), nor the Health Care Freedom Act (skinny repeal, targeting the individual and employer mandates and the medical device tax but leaving most of the rest of Obamacare in place) — were actual bills. All of those were amendments to an underlying bill, the American Health Care Act.
Because that underlying bill has not failed yet, the Obamacare repeal effort can still proceed through reconciliation.
“The failed vote was on the ‘skinny repeal’ amendment, not on passage of the bill,” Alan Frumin, who served as parliamentarian of the United States Senate from 1987 to 1995 and then from 2001 to 2012, including during the original Obamacare fight, says (emphasis his). “The reconciliation bill, H.R. 1628, is on the calendar, reachable on a non-debatable majority vote motion to proceed; all 20 hours of debate have expired; amendments are still in order.”
In other words, the Senate can still pass a health care bill with a bare majority and avoid a Democratic filibuster. All Republicans have to do is come up with a plan.
How the Republican plan came together
Shortly after Donald Trump's shocking victory, congressional Republicans in November 2016 devised a strategy that would enable them to achieve their two biggest legislative priorities: repealing the Affordable Care Act and slashing tax rates.
The plan would proceed in two steps. First, Congress would pass a dummy budget resolution as soon as it convened. What that resolution said about spending wouldn’t matter; all that mattered was that it contained “reconciliation instructions.” Those instruct committees in each house to produce legislation. Democrats could not filibuster that legislation as long as it stuck to a given set of budget-related topics. So the legislation could pass the Senate with 51 votes, or even 50 plus the vice president, without needing any Democratic support.
The plan was to use this power to quickly pass an Obamacare repeal bill along party lines, hopefully by spring. Then Congress would pass another, real budget, with detailed spending levels and more reconciliation instructions. This time, reconciliation would be used to pass a big tax reform package, cutting rates for individuals and corporations, among other big changes. This, too, could pass with only Republican support. So Republicans would be able to easily, without any cooperation from Democrats, accomplish two big policy goals.
That, obviously, has not happened. The dummy budget was passed swiftly in January. But after repeated attempts, Senate leaders have not been able to come up with a health care bill that would get 50 Republican votes.
Nobody really knows how long reconciliation lasts
The process, however, is not over. Republicans can still open debate on the House health care bill again, introduce another health care amendment with a novel proposal (like Graham-Cassidy, which would block-grant Obamacare money to the states), and pass the bill with 50 or 51 votes.
The only problem is that reconciliation authority lapses eventually. And no one is entirely sure when “eventually” is.
The reconciliation process is tied to budget resolutions, and currently Congress is operating on the fiscal year 2017 budget they passed in January. The reconciliation instructions are clearly usable right now. But everything else is a matter of controversy:
- Some think that reconciliation expires on September 30, 2017, the last day of FY 2017. After that, according to this theory, the House and Senate will have to pass a new resolution to pass reconciliation legislation.
- Others argue that reconciliation doesn’t expire until a new resolution is passed. Under that theory, Republicans can keep working on health care under the 2017 budget as long as they like, so long as they don’t pass a FY 2018 budget resolution with separate reconciliation instructions in the meantime.
- Still others have contended that Congress could pass a FY 2018 budget resolution and still work on its FY 2017 reconciliation bill. This would enable them to work on two reconciliation bills simultaneously; say, health care and tax reform.
The budget procedure experts I spoke with thought the second interpretation — that reconciliation lasts until a new budget resolution is passed — was the most plausible, but acknowledged there’s considerable uncertainty on the question. “Many think Sept 30. Others think not until new resolution passes or 115th Congress adjourns,” Marc Goldwein, senior vice president and senior policy director for the Committee for a Responsible Federal Budget and a leading budget procedure expert, says.
Asked for comment, Frumin, the former parliamentarian, simply replied, “????”
Sarah Binder, a professor of political science at George Washington University, a senior fellow at the Brookings Institution, and a leading congressional procedure expert, says the likeliest option is No. 2: Reconciliation lasts until the next budget resolution. “My sense has been that a reconciliation bill remains ‘alive’ until a conference agreement on the next fiscal year's budget resolution is adopted by both chambers,” she says, noting that in 2006, congressional Republicans rushed to pass a tax cut bill through reconciliation before a FY 2007 budget resolution was adopted.
"Once that occurred," according to a contemporaneous article in CQ Almanac, "the reconciliation protections afforded the tax bill in the fiscal 2006 resolution would end."
“I suppose it's possible that the parliamentarian would advise that the bill ‘expires’ Sept. 30 at the end of FY17 regardless of whether or not a FY18 budget resolution has been adopted, but I'm skeptical,” Binder continues. “We are on uncharted ground. The Congressional Budget Act doesn't explicitly address this, and so the question is subject to interpretation by the parliamentarian.”
Reporting by my colleague Tara Golshan suggests that most congressional Republicans also buy the interpretation wherein they can pass something until a new 2018 resolution is prepared; you don’t need to pass a budget to keep the government funded, so Congress could under this interpretation just keep delaying a new resolution until they’re done with health care and want to move on.
That gives Republicans lots of time, if they want it, to try to craft yet another Obamacare repeal package. The main obstacle isn’t the rules but the actual viewpoints of Republican senators, and the fact that the most persuadable person on the issue, John McCain, is not going to be in Washington for weeks, if not months.
Tax reform will likely require a new budget resolution
It’s possible, however, that Republicans will eventually want to just cut their losses and move on from health reform to tax reform. To do that, though, they’d likely need to pass a new budget resolution first.
The problem is that Republicans are halfway through the process. The House has already passed its reconciliation bill, the American Health Care Act. But the 2017 budget resolution that started this process in the first place required significant savings from two Senate committees: the Finance Committee and the Health, Education, Labor, and Pensions Committee. Tax reform isn’t likely to involve the latter committee at all.
The Senate bill also has to save about as much money as the House bill ($133 billion in on-budget savings over 10 years). Tax reform is meant to be budget-neutral, not deficit-reducing, which makes reaching that number through tax provisions very tough.
Congress could react by passing a new fiscal year 2017 budget with different instructions, wiping the slate clean. But it’d probably be easier to just move ahead with the fiscal year 2018 budget. After all, if they’ve given up on health care, then tax reform is basically the only major priority they have left. They can include changes to social safety net programs to pay for tax cuts, if they want to reform food stamps, Supplemental Security Income, and the like in the process. Once they conceded defeat on health care, they would only really need one reconciliation bill to try to do tax reform with.
Of course, tax reform is itself a massively complex undertaking that could prove just as difficult to crack as health care has. But that’s a matter of politics, not Senate rules. The rules are clear that Republicans can use reconciliation to pass permanent tax changes (provided they don’t increase the deficit after 10 years) with only 50 votes.
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