April 22, 2015 -- The major difference between the House and Senate budget plans that needs to be ironed out in conference committee concerns what to use the powerful reconciliation procedure for—the expedited method of bringing revenue and spending into conformity with the policies in the congressional budget resolution.
Senate leaders want to employ reconciliation to repeal and replace the 2010 health care law. The Senate's fiscal 2016 budget resolution (S Con Res 11) reflects this, issuing reconciliation instructions to just two committees, Finance and Health, Education, Labor and Pensions, or HELP. Finance and HELP share jurisdiction over health care programs. Finance has jurisdiction over taxes.
The House Budget Committee wrote instructions in its plan (H Con Res 27) to 13 committees, including Ways and Means and Energy and Commerce, the committees with jurisdiction over health care programs, providing them with a broad directive to find deficit reduction in many different federal programs.
Several people with knowledge of the negotiations say the budget conferees are moving in the direction of limiting reconciliation to the health care law, as Senate leaders prefer. But that could change as House and Senate conferees seek to reach agreement before the end of the month. The House and Senate Budget Committee chairmen, Rep. Tom Price of Georgia and Sen. Michael B. Enzi of Wyoming, have said little about reconciliation recently. Both chairmen stressed the need to repeal "Obamacare" during the first conference meeting. But neither they nor any of the other Republican members of the conference committee even brought up reconciliation.
The two reconciliation approaches boil down to a choice between using the procedure for deficit reduction in general, or using it to produce the more limited savings that would be realized from repealing much of the health care law. Reconciliation is particularly potent in the Senate, where it allows budget-related legislation to be considered and approved with a simple majority of 51 votes instead of the usual supermajority of 60.
A third but related potential use of reconciliation that both committees have contemplated is to employ it to pass a GOP legislative response to a Supreme Court ruling on health care subsidies that is expected in June. Republicans hope the court will rule in King vs. Burwell that the federal government can't offer subsidies on a federal exchange, opening the door for the GOP to offer its own transition plan that could eventually replace the health care law.
Sen. Ron Johnson, R-Wis., said he would like to see reconciliation used for a response to the court decision "if it's possible." Johnson is urging the GOP to come up with a response plan sooner rather than later. He introduced legislation April 20 that would allow individuals to keep any health care plan they have until August 2017 if the federal subsidies are struck down. The bill also would repeal requirements for individuals to buy insurance and allow them to purchase any new insurance plan on the market even if it did not meet federal requirements.
Those who want to limit reconciliation to repealing and replacing the health care law argue that approach would allow Republicans to make clear to the public what they are trying to accomplish, even though it is certain that President Barack Obama would veto the measure. Combining repeal with other spending cuts would muddy the issue and give Democrats the opportunity to switch the focus away from the health care law to other elements of the reconciliation legislation, they say.
Georgia Republican David Perdue, a freshman member of the Senate Budget Committee, favors using reconciliation for the health care law. "I am very nervous about broadening the use of that at all," he said.
Broader reconciliation instructions, such as those envisioned in the House plan, would widen the field of mandatory spending programs that could be cut and make greater deficit reduction possible.
"Given the need to slow the growth of entitlement spending, the budget conference should adopt the House's approach to reconciliation -- instructing every committee dealing with mandatory programs to find at least some savings," the non-partisan Committee for a Responsible Federal Budget advocated in a report last week. "This way, Congress has maximum flexibility to enact deficit reduction from across the budget, allowing it to act on the mandatory savings assumed in the budget resolution, or a smaller set of savings with broader bipartisan support."
The reconciliation instructions in both budgets were written to provide a high degree of flexibility enabling the procedure to be used for a bill to respond to the Supreme Court decision. That is particularly the case in the House budget, which includes a special rule allowing any potential subsidy replacement plan to have its cost estimated relative to the January 2015 Congressional Budget Office baseline. If a plan were scored against an updated baseline after the court ruled against subsidies, the legislation would potentially constitute a spending increase. But scored against the January baseline, it would appear as a spending cut.
Sen. Rob Portman, R-Ohio, said he wants to retain flexibility to respond to a court decision in the final budget resolution. "I think in terms of the health care side of it, keeping it broad makes sense because we don't know what's going to happen with the court case," he said.