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A primer on reconciliation

From NBC's Ken Strickland
Increasingly, liberals and progressives pushing for a public option in any health-care reform want to use a tool called budget reconciliation, so reform could be passed by just 51 Senate votes instead of the filibuster-proof 60 (requiring conservative Democrats and maybe even a moderate Republican like Olympia Snowe).

Putting aside the political debate about reconciliation -- and whether or not Democrats should use it -- the bottom line is this: Reconciliation can be used and has been used by both parties. It's written into law.

But the biggest question is this: Can it be used to successfully produce a comprehensive health-care reform bill?

This is an attempt to give a stripped-down, dumbed-down, Cliff Notes-like explanation of what reconciliation is, what hurdles opponents can place before it, and how it might be handled on the floor should Democrats decide to use it.

What is reconciliation and why is it used?
As mentioned above, it takes 60 votes to pass anything controversial in the Senate, due to the threat of a filibuster. But in 1974, in an effort to cut the nation's soaring deficits, Congress passed a law creating a procedure that could NOT be filibustered and would only need a simple majority of 51 votes to pass.

Without a filibuster-proof procedure, lawmakers reasoned, the Senate would face difficulty passing bills that would make cuts in Medicare and Medicaid -- popular programs which take up a significant portion of government spending. In an "explanation" of why reconciliation is needed, the Senate Budget Committee wrote in 1998:

These changes are considered difficult because the very nature of the programs involved often necessitates changing tax rates or placing restrictions on very popular social programs in order to achieve budgetary savings.

In addition to needing only 51 votes to pass, floor debate is limited to only 20 hours. Adding amendments that are unrelated to the bill are also prohibited. These rules are intended to speed up the legislative process and prevent opponents from gumming it up with deliberate procedural dawdling.

So how did health-care reform fall under reconciliation?
If deficit reduction is the original purpose for using reconciliation, how did a health-care bill get involved? Simply put, Democratic leaders made it about controlling spending and at the same time created a path to push the bill through if they realized they couldn't find 60 votes to pass it the traditional way. It's an escape hatch, of sorts.

From President Obama on down, Democrats have long proclaimed that a key component of fixing the economy was reining in health-care costs -- "bending the cost curve," as they like to say. Equally importantly, Obama's only line in the sand thus far has been that any health-care bill cannot "add one dime" to the deficit. (Ding, ding. Did someone say "deficit"?)

So when Congress passed its budget earlier this year, it included "reconciliation instructions" for the Senate Health and Finance Committees to produce legislation that reduces the deficit by $2 billion. So in simple terms, as long as long as the bill that could cost as much as $900 billion can find a way to make an extra $2 billion to put towards reducing the deficit, reconciliation can be used. 

While Republicans argue that the Democrats' health-care plan is as much as about social policy and big government, there is a fiscal component. Reconciliation has also been used in a similar ways by Republican leaders to restructure social programs like welfare reform.

Indeed, reconciliation has been used with tax cuts, student loans programs, the creation of a children's health insurance program, and it even played a part in the implementation of digital television when coupons were provided for the purchase of converter boxes. 

Death by a thousand cuts
It's clear that reconciliation would put any health-care bill on the fast track for passage. It can't be filibustered; it only needs 51 votes to pass; and debate is limited to 20 hours. But opponents have weapons of their own -- which could potentially gut the bill and could still require 60 votes to approve key sections of the legislation.

Remember, reconciliation was originally created to address fiscal policy -- not social policy. So every line in the bill must adhere to strict rules to ensure things stay within those boundaries. In short, if it's not about spending government money or taxing people, an opponent can raise an objection to have that section struck from the bill.

Example #1: Expanding Medicaid or cuts to Medicare would more than likely pass muster, because those programs are run with taxpayer dollars. Example #2: A provision requiring insurance companies to issue coverage regardless of health status could be killed because there's no obvious direct connection to spending or saving federal dollars. (These are, of course, unscientific best guesses.)

When a senator wants to challenge a section of the bill, he or she objects by raising a "budget point of order." There are more than a dozen that could apply to a health-care bill. 

During the 20 hours of debate when the bill is on the floor, the senator stands and says, "I'd like to raise a budget point of order" against a section of the bill. If the parliamentarian sustains or agrees with the objection, that section is removed from the bill or amendment. (More on the parliamentarian's critical role below.) There is no limit to how many objections can be raised.

However, the parliamentarian's decision can be appealed, with 60 votes. So if the parliamentarian rules against the senator, that senator could ask for a vote to override the decision. If there are 60 votes, the questionable item can stay in the bill. While it may take only 51 votes to pass the final bill, but there may be 60-vote hurdles en route to final passage.

The most well-known point of order is referred to as "the Byrd Rule." Named after its creator, West Virginia Sen. Robert Byrd, the rule generally allows sections of the bill to be struck if they do not have a direct impact on deficit reduction.

Provisions can also be challenged where the impact on spending is "merely incidental."  (Simple question: Would a financially self-sustaining public option or co-op have a "merely incidental" impact on the deficit?)

So popular is the Byrd Rule that it has its own lexicon. If someone thinks he/she can strike a section of the bill, that section is considered "Byrdable." Once it is struck from the bill, it's called a "Byrd Dropping." A bill that has been riddled by the Byrd Rule has gone through a "Byrd Bath."

(Bonus phrase: The Byrd Bath leaves the bill looking like "Swiss Cheese" for all the holes created within the original legislation.)

The parliamentarian's critical role
The Senate parliamentarian and his staff obviously play a critical role in any reconciliation bill. When objections are heard on the floor during debate, they make the call. They alone determine the definition of "merely incidental." And if someone disagrees with the decision, it takes a super-majority of 60 votes to overrule. 

The Senate parliamentarian is viewed by most observers, even Republicans, as a non-political role. Alan Frumin, the current parliamentarian, was promoted to the top spot by then-Republican Majority Leader Trent Lott. The top Republican on the Budget Committee, Sen. Judd Gregg, said of Frumin this month, "I think he'll be a fair arbiter and honestly call the shots."

Because reconciliation has been used almost 20 times since 1980, the people writing the bills are well-studied in the best ways to fly around the Byrd Rule and would presumably write their legislation as to not have it drown in the Byrd Bath. But nothing is certain until the bill is on the floor and rulings are finally made. Why?

Because of the complex nature of bills brought under reconciliation, it is not uncommon for the committee writing the bill to get an early read from the parliamentarian's office on whether specific provisions can pass the smell test. 

According to someone who's been through reconciliation before, it's in everyone's advantage to give the parliamentarian plenty of time to understand the bill before any ruling.

But any early guidance is only that: guidance.

When the bill reaches the floor, there's always the possibility that an opponent will raise an objection to a provision that the bill's sponsors hadn't considered.

In other words, just because you may have your opponents' playbook on Saturday doesn't mean they won't create new plays on Sunday. No one goes to the floor knowing how it all plays out, one reconciliation vet explained.

The sidecar
If Democratic leaders decided to use reconciliation, the Conventional Wisdom is that the health-care bill would be split into two different bills.

One bill would be the reconciliation bill itself, which would deal with all the measures that address government spending and saving. That would included things like expanding Medicaid, making cuts to Medicare, creating government subsidies for low- and middle-income families, and imposing taxes and fees on businesses.

The other bill, what Sen. Judd Gregg calls "the sidecar," would address all the other intangibles, especially the measures addressing insurance reform. But because it would not be passed under the rules of reconciliation, the sidecar would be subjected to filibusters, and would more than likely require 60 votes for passage. The reconciliation part of the bill could be done in a week; the sidecar could take a few weeks.

The tea-leaf-reading from Majority Leader Harry Reid's folks suggested that reconciliation would be used as a last resort: the escape hatch.

This reading may give you a sense of why.