Since 2011, when the Republicans retook the House of Representatives following a landslide, many people believed they had a mandate to repeal the Affordable Care Act, more popularly known as Obamacare. Since then, more than 50 attempts have been made to repeal all or part of Obamacare, the signature accomplishment of President Obama’s eight years in office. In the last Congress, Republicans successfully got a repeal bill through the House and Senate, only to see it vetoed by President Obama. On January 20, 2017, President Trump will be sworn into office, surrounded by Members of the Republican-controlled Senate and House. Will they finally be able to accomplish their goal? If things go according to plan, big changes are in store.
Starting last January, Speaker of the House Paul Ryan and the Republican Conference began outlining an agenda on six major topics, aimed at quickly implementing policy changes should a Republican win the White House in 2016. One of the items was repealing Obamacare and replacing it with a market-oriented health care system, which they believe would be inclusive, offering individual Americans greater control over their choice of doctors, health care plans and treatment choices. At the end of December, Speaker Ryan announced that the Congress would accomplish this goal by using budget reconciliation. This measure has also been used by the Democrats when they passed Obamacare.
To accomplish this, Congress is going to pass a “repeal resolution” in January. This repeal resolution is really a specific and limited budget resolution that will contain specific reconciliation instructions that will direct the appropriate committee to pass legislation in their jurisdiction that will repeal and replace Obamacare. Once the House and Senate pass this resolution – that’s a virtual guarantee, since it cannot be filibustered in the Senate – the committees will go to work. When they have completed their actions, the different components will be combined by the budget committee into a reconciliation bill, which also cannot be filibustered in the Senate.
Let’s unpack this before going on.
First of all, Congress can pass multiple budget resolutions in a single year – in fact it will certainly pass at least one more such budget resolution (probably containing reconciliation instructions for tax reform) in April. By using a budget resolution as a vehicle for repeal, the Congress can take advantage to certain key aspects of the budget law that make passing complicated – and contentious – legislation easier. This comes as a surprise to many people since Congress often failed to pass any budget resolution at all during some of the years of the Obama Administration.
Budget reconciliation is defined by the 1974 Budget Act. Reconciliation becomes possible only if the House and Senate agree to a budget resolution. Reconciliation instructions are written into the budget resolution. These instructions allow Congress to bring the spending and revenue levels in line with the budget targets. If individual appropriation bills exceed their targets, or if tax revenues are insufficient, the Budget Committee can offer a reconciliation bill (which must be signed into law by the President) to change the previously passed legislation to meet the targets agreed to in the budget resolution.
The budget resolution contains instructions, called reconciliation directives. The reconciliation directives specify which committees should develop reconciliation instructions, what the net dollar amount of change should be, and what the period to implement the change will be. To avoid any confusion, imagine that the reconciliation instructions require saving a specific dollar amount. The reconciliation directives will specify the committees that must draft the legislation needed to achieve the goal set by the reconciliation instructions. For instance, when the reconciliation process was used in the fiscal year 2010 budget resolution to pass Obamacare, the bill contained reconciliation instructions for the Senate and House. The resolution instructed the Senate Committee on Health, Education, Labor and Pensions (HELP) to report changes that reduced the deficit by $1 billion for the period of fiscal years 2009 through 2014. It also instructed the House Energy and Commerce Committee, the Ways and Means Committee and the Education and Labor Committee to do the same thing. Once these committees had carried out the instructions the budget resolution required, the various bills were put together in a reconciliation bill by the Budget Committee and sent to the House Floor for a vote.
The most important thing about reconciliation, and the feature that makes it so attractive to Congress, is that it cannot be filibustered in the Senate.
In addition, the Senate debate is limited to 20 hours. A simple majority is required for passage (51 votes), and all amendments must be germane and budget neutral. The germaneness and budget neutrality are derived from what is known as the Byrd Rule which tests whether provisions of a bill are extraneous. Items that fail these tests can be removed if a Senator raises a point of order. It is a powerful tool by which the Congress can cut spending, increase tax revenue and force the entire budget to conform to the agreed upon budget resolution blueprint.
While the authors of the 1974 Budget Act thought that reconciliation would be used merely to enforce the budget resolution, creative minds have found ways to take advantage of it. Both political parties have used the process to pass significant legislation – including major tax cuts and tax increases, the Welfare Reform act of 1996, and Obamacare.
Congress will be initiating the repeal process at the very beginning of the 115th Congress using the provisions of the 1974 Budget Act, providing multiple committees with jurisdiction over healthcare issues, as a way to complete their work in an orderly fashion. The Budget Committee will iron out any potential overlaps or possible contradictions between the various committee proposals, so Congress can vote to repeal and replace Obamacare.
Obviously with something so important to the lives of millions of Americans, an orderly process is essential to ensure a plan as equally flawed as Obamacare is not put in its place. In December, Speaker Ryan’s office said the process to repeal Obamacare should be done in two steps to ensure an efficient transition towards a better healthcare: “Once law, there will be a stable transition period to ensure no one has the rug pulled out from under them.”
No doubt, there will be significant controversy over the policy implications of the debate – even among Republicans. However, there cannot be much disagreement over the process being used, since using reconciliation to repeal Obamacare merely replicates the procedure used by the Democrats under Speaker Nancy Pelosi and Senate Majority Leader Harry Reid to pass it in the first place. Both parties have used this process for major changes – even on a bipartisan basis, such as the Welfare Reform bill, passed by a Republican Congress but signed into law by President Bill Clinton in 1996.
In a 2016 survey done by the Congressional Institute regarding American’s attitudes towards Congress, one of the biggest complaints was that of Congress, “not presenting a clear plan to voters and following through.” Republicans in Congress have presented a clear plan. The question the American people will apparently be asking is, “can Congress follow through?”
We’ll know in a month.