Broke the Senate...

The Rule That Broke the Senate

Once a tool to ease partisan gridlock, reconciliation has become part of the problem, used to reinforce the very problems it was designed to help fix.

By JEFF DAVIS

This month, as congressional leaders ready their various budget and tax proposals for fiscal year 2018, Republican hopes hinge on the use of budget reconciliation—a way to expedite the lawmaking process for certain bills by immunizing them from the threat of filibuster and limiting the scope of amendments. In short, if the House and Senate can each pass the same budget resolution, it starts a process in which they can reconcile any differences between the two bills in a final proposal both chambers then vote on.

At the moment, the House and Senate proposals for fiscal year 2018 are quite sweeping in scope. The House resolution calls for $200 billion in mandatory spending cuts, while the Senate bill would cut taxes by $1.5 trillion. If Congress can agree on a final budget resolution, House and Senate committees will have no choice but to write legislation meeting whatever “reconciliation directives” they are given by the budget resolution.

There’s just one big problem: Budget reconciliation was never meant to be used like this. Once a tool to ease partisan gridlock, reconciliation has become part of the problem, used to reinforce the very problems it was designed to help fix.

As envisioned in the original 1974 Budget Act, budget reconciliation was limited in scope: a two-week exercise in late September of each year to tweak the spending and tax bills that had already passed earlier in that session. It was not built for legislation sweeping in scope and scale. Allen Schick, the Congressional Research Service specialist tasked with helping Congress draft the 1974 Act, later wrote that “reconciliation was intended to deal with legislative decisions made during the interval between adoption of the first budget resolution and consideration of [a] second resolution [in September, just before the start of the fiscal year].” But it was never used this way.

As re-imagined in 1980, budget reconciliation was a way to temper partisan gridlock: Its first major use happened under President Jimmy Carter and was largely supported by congressional Republicans as a way to circumvent the powerful Democratic “old bulls” who sat as committee chairmen. Reconciliation’s subsequent uses in the 1980s required the Republican president’s signature on a bill passed by a Congress in which Democrats controlled at least one chamber. Reconciliation shifted to the beginning of the annual budget cycle—instead of tweaking bills passed earlier in the year, reconciliation now had to look back at laws passed by prior Congresses. It was a useful legislative tool, but as its use became routine, it started being brandished as a weapon for increasingly partisan governance.

The turning point happened in the 1990s. President Bill Clinton’s first budget got zero support from congressional Republicans, and the ensuing reconciliation bill wound up passing the Democratic Congress by just one vote in each chamber—the first time budget reconciliation had been used successfully in what turned out to be a partisan manner. A number of measures that would otherwise have had trouble getting to 60 votes in the Senate—raising the income tax rate on top earners by 8.6 percentage points, increasing gasoline taxes by 4.3 cents per gallon, delaying federal retiree cost-of-living adjustments, and increasing taxes on Social Security benefits—were now law. It was a demonstration of how reconciliation could be used to push controversial policies through the Senate without requiring the 60 votes needed to break a filibuster.

The long-term implications of this shift were not visible at the time, but it has had wide-ranging and transformative effects on the way Congress works—or doesn’t. Reconciliation has helped to entrench congressional gridlock, discouraged bipartisan lawmaking, made it more difficult for complicated bills to become law and made budget deficits more inevitable.

***

Both statistical and anecdotal evidence indicate that partisan gridlock is a much worse problem in today’s Senate than at any point in the past century. The result is that Congress enacts fewer but longer laws. GPO has used the same typeface for the Statutes at Large for more than a century. In 1974, Congress enacted 404 public laws totaling 2,359 pages of statute. In 2016, the number of laws enacted was cut almost in half, to 214, but the number of pages had increased to 3,036. The average number of pages per law has almost tripled, from 5.8 in 1974 to 14.2 pages last year.

Legislators have responded to the diminished hopes of enacting legislation the traditional way by succumbing to the temptation to take the reconciliation shortcut through the Senate rather than going through “regular order,” which is the normal way of legislating—including allowing amendments, relevant committee hearings, a standard amount of floor debate and the use of the filibuster. One need only think back to the last few months of debate over repealing and replacing the Affordable Care Act—which Republicans tried to do through reconciliation rather than through regular order. In doing so, they not only lost the support of Senator John McCain, who wanted regular order used on any replacement bill, but also halted an inchoate bipartisan Obamacare fix in the Senate.

We’re stuck on something of a hamster wheel: Gridlock makes reconciliation a more attractive option; reconciliation has thwarted goodwill attempts at bipartisan lawmaking; the inability to pass bipartisan bills makes gridlock more likely; and the cycle continues.

This is less important when Congress and the White House are in different hands. For instance, two years after Clinton’s first reconciliation deal, Republicans took back the House and Senate, and House Speaker Newt Gingrich sent Clinton a reconciliation bill with $387 billion in entitlement cuts, which Clinton vetoed. There is little point in using a procedure that requires only 51 votes in the Senate to pass a bill if you still need 67 votes in the Senate to override a president’s veto.

The urge to use reconciliation as a filibuster workaround is stronger when the same party controls Congress and the presidency. This started to come to fruition in George W. Bush’s first term, when the reconciliation process was used to enact $1.25 trillion in tax cuts over 10 years (which passed with only 58 votes in the Senate), and again two years later, when those tax cuts were expanded and accelerated through reconciliation by a vote of 51–50 (with Vice President Dick Cheney breaking the tie).

The Bush tax cuts highlight another problem with reconciliation: The budget process that ushered in the age of reconciliation does not treat deficits as a problem. When the Budget Act was being written in spring 1974, the U.S. was only five years removed from a balanced budget, and there was no reason to believe that steadily increasing deficits and debt would be systemic. Accordingly, the 1974 process makes it just as easy to use the tool of reconciliation to increase deficits as it does to decrease them.

Senate Budget Committee Chairman Mike Enzi’s 2018 budget resolution orders the Finance Committee to produce a bill to “increase the deficit by not more than $1.5 trillion” over 10 years. It is doubtful that the legislators who created the reconciliation process in 1974 dreamed that it would be used for anything with such profound fiscal implications.

Today, Congress too frequently uses reconciliation to force specific policies through the Senate and makes the numbers fit the preferred policy, instead of the other way around. This started in FY 2001, when reconciliation was used to send one politically popular tax cut (repeal of the so-called “marriage penalty”) to Clinton’s desk for a veto. It reached peak granularity in the mid-2000s, when Republican senators tried to use reconciliation for the sole purpose of getting around a Democratic filibuster of legislation to open up the Arctic National Wildlife Refuge to oil drilling. (Chairman Enzi’s 2018 resolution is attempting the ANWR gambit again, ostensibly to reduce deficits by just $1 billion over 10 years, a rounding error in a major Cabinet agency’s budget.)

Reconciliation was supposed to be all about numbers, not policy. In its original usage, reconciliation forced congressional committees to change whatever policies they wished in order to meet the spending and revenue totals agreed to by a majority of Congress in the budget resolution. The “Byrd Rule” reform first enacted in 1985 and made permanent in 1990—and named after its author, Senator Robert Byrd—reinforced the numbers-only nature of reconciliation, automatically jettisoning any provision from a reconciliation bill that does not directly affect revenues or outlays—unless at least 60 senators vote to save the provision.

The Byrd Rule makes reconciliation singularly unsuitable as a vehicle for enacting complicated policies into law, which is a big reason why the Affordable Care Act has always had problems. After Democrats lost Ted Kennedy’s Senate seat in January 2010, they no longer had their filibuster-proof 60-seat majority to pass health care reform and were forced to implement the final version of the ACA through budget reconciliation. The reconciliation bill couldn’t address anything relating to the private insurance market or other important aspects of health care that don’t show up in the federal budget, which created several inconsistencies in the law that have never been fixed.

Further, reconciliation is supposed to be about short-term budget fixes, not semi-permanent trends. When reconciliation was first used, in FY 1981, the budget resolution’s “window”—that is, the length of time during which a budget resolution’s spending and revenue policies apply—covered only three fiscal years. The implementation of the 1990 budget agreement increased the window to five years. In FY 2002, that time span doubled to 10 years, in order to make the Bush tax cuts last as long as possible.

The problem is that budget scores and forecasts are like weather forecasts—the farther into the future they try to look, the less accurate they turn out to be. The economists at the Office of Management and Budget and Congressional Budget Office are required to estimate what interest rates, inflation, GDP growth, unemployment and demographic trends will be 10 years from now in order to model tax receipts and entitlement spending based on those assumptions. But no sane person would bet their own money on those forecasts being precisely accurate, or even generally accurate, a decade out.

In addition to keeping nonbudgetary provisions out of reconciliation bills, the Byrd Rule also prohibits reconciliation bills from carrying any fiscal provision that has an effect past the expiration of the budget window—which is why the Bush tax cuts expired after 10 years, forcing the “fiscal cliff” crises. Ten years is a long time by political standards, so fiscal policies with a 10-year sunset may feel permanent, but they aren’t, and Congress has a bad track record with the extension of such temporary, yet long-term, policies.

The reconciliation process showed its limits earlier this year. Nine months ago, the new Congress convened and, within its first 10 days, passed the first budget blueprint for the ongoing fiscal year 2017—done solely so that reconciliation could be used to repeal the Affordable Care Act later that year. Again, policy came before numbers: The reconciliation directives only said that the repeal bill should decrease the deficit by “at least” $1 billion over 10 years. Various incarnations of the reconciliation bill were scored as reducing deficits between $119 billion and $473 billion over 10 years, but none of them was able to get even 50 votes in the Senate. Meanwhile, the 2018 budget blueprint was kept on hold until after September 30, so as not to pre-empt the 2017 reconciliation bill.

Reconciliation initially represented a pragmatic approach to governance. Over time, its original use has been shoehorned as legislators seek to use its expedited processes to enact almost any kind legislation that affects spending or taxes—regardless of whether reconciliation is a suitable or responsible fit.

It was meant to allow a majority of Congress to work its will—if both chambers could come together, the thinking went, and declare appropriate levels of taxes and spending, the tool of reconciliation could be used to overcome legislative inertia and special interests and write a law to get to those numbers. But now, reconciliation is too often used to push controversial policies through the Senate without regard to its effect on spending and tax receipts.

Instead of the majority using reconciliation to rewrite policies that will fit within certain financial boundaries, it’s now used to implement policy changes in search of a majority—with the numbers falling where they may.