Reconciliation is a legislative process of the United States Senate intended to allow a contentious budget bill to be considered without being subject to filibuster. Reconciliation also applies in the United States House of Representatives, but since the House regularly passes rules that constrain debate and amendment, the reconciliation process represented less of a change in that body.
A reconciliation instruction (Budget Reconciliation) is a provision in a budget resolution directing one or more committees to submit legislation changing existing law in order to bring spending, revenues, or the debt-limit into conformity with the budget resolution. The instructions specify the committees to which they apply, indicate the appropriate dollar changes to be achieved, and usually provide a deadline by which the legislation is to be reported or submitted.
A reconciliation bill is one containing changes in law recommended pursuant to reconciliation instructions in a budget resolution. If the instructions pertain to only one committee in a chamber, that committee reports the reconciliation bill. If the instructions pertain to more than one committee, the House Budget Committee reports an omnibus reconciliation bill, but it may not make substantive changes in the recommendations of the other committees.
History
The Congressional Budget Act of 1974 created reconciliation (See Pub.L. 93-344, § 310; 88 Stat. 297; 2 U.S.C. § 641.) but Congress came to use it in the 1980s. Congress used reconciliation to enact President Bill Clinton's 1993 (fiscal year 1994) budget. (See Pub.L. 103-66, 107 Stat. 312.) President Clinton wanted to use reconciliation to pass his health care plan, but Senator Robert Byrd insisted that the health care plan was out of bounds for a process that is theoretically about budgets. However, on August 25, 2009, Sen. Jeff Bingaman (D-NM), one of the members of the "Gang of Six" bipartisan group to work on a health care reform bill in the Senate has said that reconciliation may be used, is an acceptable option, and that he can support it.
One of the most important developments to emerge from the 1974 Act has been reconciliation, (a process whereby Congress changes existing laws to conform with tax and spending levels set in a budget resolution), which developed into an important procedure for implementing the policy decisions and assumptions embraced in the budget resolution, in a way that was unforeseen when the Budget Act was written. Under the original design of the 1974 Budget Act, reconciliation had a fairly narrow purpose. It was expected to be used in conjunction with the second resolution adopted in the fall, and was to apply to a single fiscal year and be directed primarily at spending and revenue legislation acted on between the adoption of the first and second budget resolutions. Congress has subsequently used the procedure to enact far-reaching omnibus budget bills, first in 1981, but most recently in 1990 and 1993.
Process
To trigger the reconciliation process, Congress passes a concurrent resolution on the budget instructing one or more committees to report changes in law affecting the budget by a certain date. If the budget instructs more than one committee, then those committees send their recommendations to the Budget Committee of their House, and the Budget Committee packages the recommendations into a single omnibus bill. In the Senate, the reconciliation bill then gets only 20 hours of debate, and amendments are limited. Because reconciliation limits debate and amendment, the process empowers the majority party.
Until 1996, reconciliation was limited to deficit reduction, but in 1996 the Senate adopted a precedent to apply reconciliation to any legislation affecting the budget, even legislation that would increase the deficit. Under the administration of President George W. Bush Congress used reconciliation to enact three major tax cuts. Efforts to use reconciliation to open the Arctic National Wildlife Refuge to oil drilling failed.
Byrd Rule
Further information: Sunset provision#The Budget Act and the Byrd Rule
Reconciliation generally involves legislation that changes the budget deficit (or conceivably, the surplus). The "Byrd Rule" (2 U.S.C. § 644) outlines what reconciliation can and cannot be used for. The Byrd Rule defines a provision to be extraneous in six cases:
(1) if it does not produce a change in outlays or revenues;
(2) if it produces an outlay increase or revenue decrease when the instructed committee is not in compliance with its instructions;
(3) if it is outside the jurisdiction of the committee that submitted the title or provision for inclusion in the reconciliation measure;
(4) if it produces a change in outlays or revenues which is merely incidental to the non-budgetary components of the provision;
(5) if it would increase the deficit for a fiscal year beyond those covered by the reconciliation measure, though the provisions in question may receive an exception if they in total in a Title of the measure net to a reduction in the deficit; and
(6) if it recommends changes in Social Security.
If a provision violates the Byrd Rule, then any Senator may raise a procedural objection and unless 60 Senators vote to waive the objection, then the offending provision will be stripped from the bill.
Still how does using the budget reconciliation process to enact substantial health care reform have any viability today? Well Pete Davis helps us understand the context:
When the Budget Act was enacted in 1974, reconciliation was envisioned as the final accounting at the end of the fiscal year containing spending cuts and tax increases to bring the budget deficit back to the level approved in the original budget resolution. The idea was to circumvent the normal impediments, like the Senate’s filibusters and never ending amendments, to achieve deficit reduction. The first reconciliation bill at the end of 1980 fit that conception, as tiny as it was, but the next reconciliation bill, President Reagan’s 1981 tax cut used reconciliation to enact the largest tax cut in U.S. history. Former GOP Congressman and OMB Director David Stockman’s brain child, using reconciliation to expand the deficit with massive tax cuts to take away the federal government’s credit card, worked like a charm legislatively, but spending took off anyway, particularly for defense, leaving record high peacetime deficits that persisted until 1997. The point is not to praise Reagan or to condemn him, but simply to note that by and large that 1981 reconciliation bill was “the Reagan Revolution.” And since that time there just haven’t been any comparable huge structural shifts in the direction of US domestic policy. It’s not really clear that modern conditions leave any other feasible route to such legislation until such time as some Senate majority decides to change the filibuster rule.
So should reconciliation be used to pass health reform? If reconciliation is the only way to get health reform through the Senate this year, requiring a majority vote instead of the normal 60 votes, I would answer with a lukewarm "Yes," but there are some big drawbacks. Number one, reconciliation is viewed by nearly all Senate Republicans and by some Democrats as a nuclear attack on the rights of the minority to full and complete debate and to offer amendments. Health reform could pass in mangled form, but the Senate's ability to pass anything else would diminish as disaffected senators would call a halt to business as usual to express their displeasure at having health reform rammed down their throats.
Number two, only health reforms that cut spending or raise taxes would pass muster under the "Byrd Rule" prohibitions against "extraneous" measures. That would leave out a lot of elements of any sensible health reform bill, including most insurance reforms, like outlawing pre-existing condition exclusions and requiring renewal; requiring employers to provide health insurance; preventive care; most new incentives for improved quality of care; President Obama's proposed Independent Medicare Advisory Council (IMAC); most health workforce improvements; and most of the administrative foundations of health reform. In theory, the Senate would pass these other essentials of health reform in a second bill subject to the normal 60 vote requirement. However, I doubt that bill would pass if the reconciliation bill did or was about to.
Number three, it will make it more difficult to use reconciliation later on for deficit reduction, which we will sorely need once the economy is safely in recovery. The OMB and CBO are expected to estimate a $1.579 trillion FY09 deficit and deficits in excess of $1.0 trillion in FY10 and FY11 as well. Those are deficits approaching 12% of GDP, a record not approached since World War II.
When the Budget Act was enacted in 1974, reconciliation was envisioned as the final accounting at the end of the fiscal year containing spending cuts and tax increases to bring the budget deficit back to the level approved in the original budget resolution. The idea was to circumvent the normal impediments, like the Senate's filibusters and never ending amendments, to achieve deficit reduction. The first reconciliation bill at the end of 1980 fit that conception, as tiny as it was, $11.6 b., but the next reconciliation bill, President Reagan's 1981 spending cuts of $137 b. over three years, was a major effort, but it was more than offset by Reagan's Roth-Kemp tax cut of $269 b. over the same period. In addition, spending took off anyway, particularly for defense, leaving record high peacetime deficits that persisted until 1998. Reconciliation bills devoted mostly to deficit reduction were enacted almost every year from 1982 through 1997.
Like President Obama, I would much prefer a bi-partisan bill, but Republican delays and right wing disruptions of town hall meetings make it clear, that this isn't so much about health reform; it's about raw political power and whether our government remains broken and unresponsive to the obvious need for health reform. Mr. Obama took his message directly to the right wing by inviting Michael Smercomish to interview him on radio at the White House. While during the interview on the radio Mr. Obama stated in part:
"Well, look, I guarantee you, Joe; we are going to get health care reform done. And I know that there are a lot of people out there who have been hand-wringing, and folks in the press are following every little twist and turn of the legislative process. You know, passing a big bill like this is always messy. FDR was called a socialist when he passed Social Security. JFK and Lyndon Johnson, they were both accused of a government takeover of health care when they passed Medicare. This is the process that we go through -- because, understandably, the American people have a long tradition of being suspicious of government, until the government actually does something that helps them, and then they don't want anybody messing with whatever gets set up.
And I'm confident we're going to get it done, and as far as negotiations with Republicans, my attitude has always been let's see if we can get this done with some consensus. I would love to have more Republicans engaged and involved in this process. I think early on a decision was made by the Republican leadership that said, look, let's not give them a victory and maybe we can have a replay of 1993-94 when Clinton came in; he failed on health care and then we won in the midterm elections and we got the majority. And I think there are some folks who are taking a page out of that playbook.
But this shouldn't be a political issue. This is an issue for the American people. There are a bunch of Republicans out there who have been working very constructively. One of them, Olympia Snowe in Maine, she's been dedicated on this. Chuck Grassley, Mike Enzi, others -- they've been meeting in the Senate Finance Committee. I want to give them a chance to work through these processes.
And we're happy to make sensible compromises. What we're not willing to do is give up on the core principle that Americans who don't have health insurance should get it; that Americans who do have health insurance should get a better deal from insurance companies and have consumer protections. We've got to reduce health care inflation so that everybody can keep the health care that they have. That's going to be my priorities, and I think we can get it done."
However even with all of that, President wants to get a bi-partisan bill done but if not his administration has hinted toward reconciliation but if they use this method, one must understand that all of the healthcare reform plans could not be passed through reconciliation no matter how much Democratic Senators want to pass tell us the American people that the entire bill could be passed in reconciliation. Still there are some Democratic supporters who are confused about the reconciliation with one Facebook friend of mine sending me the following information when I asked a question, I thought reconciliation was only for budget bills:
“Actually no. Bush did it with his tax cuts--The 2001 Bush Tax Cuts [HR
1836, 3/26/01], The 2003 Bush Tax Cuts [HR 2, 3/23/03], Tax Increase Prevention and Reconciliation Act of 2005 [HR 4297, 5/11/06], The Deficit Reduction Act of 2005 [H. Con Res. 95, 12/21/05]. Actually two of the bills had nothing to do with the budget. In 2007, Higher Education Reconciliation Bill & H.R. 2572 was not a budget bill and passed through reconciliation. In 1993, Clinton was looking to pass his healthcare bill through reconciliation http://www.pbs.org/newshour/forum/may96/background/health_debate_page1.html.
( An excerpt from the site: Early March 1993 - Sen. Robert C. Byrd, chairman of the powerful Senate Appropriations Committee, and a recognized guardian of Senate procedure, blocks the Clinton reconciliation bill strategy. He is convinced the strategy amounts to a "prostitution of the process" by pushing through "a very complex, very expensive, very little understood piece of legislation.") The Republicans wanted to Drill in the Arctic. They passed a bill in 1993 that had included this provision during reconciliation http://www.highbeam.com/doc/1P2-18829250.html. (Excerpt taken from the site--Conservationists Thank President Clinton: President's Veto of Budget Reconciliation Bill Saves Wildlife and Environment. Defenders of Wildlife today thanked President Clinton for vetoing the budget reconciliation bill, and thus saving the Arctic National Wildlife Refuge from oil and gas drilling. Rodger Schlickeisen, president of Defenders of Wildlife, said immediately after Clinton's announcement that: This veto should remind us all that it's not just politics, it's our wildlife and our environment that's at stake in the budget battles. By a stroke of the pen, President Clinton has singlehandedly saved one of America's greatest wildlife sanctuaries, the Arctic National Wildlife Refuge.) Reagan tried to use reconciliation when he used the Omnibus Budget Reconciliation Act of 1981 to end Social Security. Politicians have used reconciliation for various bills. Americans just have very short memories.”
Still what many people on the left don’t understand is that taxes and spending as well as anything that deals with increasing or decreasing the national debt are all budgetary issues which is why reconciliation was used and could be used for all the examples that my Democratic friend mentioned above and the others referenced in this piece. Now some politicians have acted as if the thought of using reconciliation to pass some parts of healthcare reform is new but in fact it isn’t so my friend is correct about that. However what people need to understand is that all of the healthcare reform bill could not be passed in the Senate by using reconciliation and if it does than as I told my Facebook friend, it would create a new precedent for the use of it because not all of the legislation in the healthcare reform bills in the House and Senate are budgetary matters as I have mentioned above.
Thus the notion that a public option can be passed in reconciliation is not entirely accurate or true but on how to pay for the public option can be passed in reconciliation because anything dealing with financial matters are reasons for reconciliation to be used. So I hope this clears up any confusion regarding what reconciliation can be used for and how it can be used to pass legislation in the U.S. Senate. I know that a lot of people want healthcare reform and don’t care how we get it but the reality is that reconciliation will not include key pieces of legislation needed in real positive healthcare reform that will benefit all Americans. I don’t mean to dish anyone’s hopes but I am just reporting one what information I have found and if anyone can find data or information to refute these findings than I am more than happy to listen and research the information you have.
So today reconciliation might play a key role in the healthcare debate but it will not solve all of the healthcare problems so Democrats will still need 60 votes to pass key pieces of healthcare reform that reconciliation cannot take up unless the Democratic Party wants to set a new precedent for how to use reconciliation.
More Examples of Reconciliation Bills
Reconciliation bills have included:
Omnibus Reconciliation Act of 1980, Pub.L. 96-499 (1980)
Omnibus Budget Reconciliation Act of 1981, Pub.L. 97-35 (1981)
Omnibus Budget Reconciliation Act of 1982, Pub.L. 97-253 (1982)
Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA), Pub.L. 97-248 (1982)
Omnibus Budget Reconciliation Act of 1983, Pub.L. 98-270 (1984)
Deficit Reduction Act of 1984 (DEFRA), Pub.L. 98-369 (1984)
Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), Pub.L. 99-272 (1986)
Omnibus Budget Reconciliation Act of 1986, Pub.L. 99-509 (1986)
Omnibus Budget Reconciliation Act of 1987, Pub.L. 100-203 (1987)
Omnibus Budget Reconciliation Act of 1989, Pub.L. 101-239 (1989)
Omnibus Budget Reconciliation Act of 1990, Pub.L. 101-508 (1990).
Omnibus Budget Reconciliation Act of 1993, Pub.L. 103-66 (1990).
Balanced Budget Act of 1995, H.R. 2491 (vetoed December 6, 1995)
Personal Responsibility and Work Opportunity Act, Pub.L. 104-193 (1996)
Balanced Budget Act of 1997, Pub.L. 105-33 (1997)
Taxpayer Relief Act of 1997, Pub.L. 105-34 (1997)
Taxpayer Refund and Relief Act of 1999, H.R. 2488 (vetoed September 23, 1999)
Marriage Tax Relief Reconciliation Act of 2000, H.R. 4810 (vetoed August 5, 2000)
Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA), Pub.L. 107-16 (2001)
Jobs and Growth Tax Relief Reconciliation Act of 2003, Pub.L. 108-27 (2003)
Deficit Reduction Act of 2005, Pub.L. 109-171 (2006)
Tax Increase Prevention and Reconciliation Act of 2005 (TIPRA), Pub.L. 109-222 (2006)
College Cost Reduction and Access Act of 2007, Pub.L. 110-84 (2007)
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