Friday, July 6, 2012

FACT CHECK: Budget Reconciliation and Obamacare.


You have probably heard that the Republicans plan to use the Budget Reconciliation process to repeal Obamacare if they get control over Congress and the White House in November.  Can they really do that?  Maybe.  Let me explain.

Budget Reconciliation is a procedure that would allow them to pass legislation repealing all or part of Obamacare with just 51 votes in the Senate instead of a filibuster proof 60 votes.  Since they are unlikely to have more than about 50 or 51 Senate seats even if they win control over the Senate in November, Budget Reconciliation would be the only realistic way they could overturn Obamacare even with Romney in the White House.  Democrats are certain to retain enough votes in the Senate to deny Republicans the 60 votes required to end a filibuster and pass repeal legislation.  If Obama is re-elected, it will be impossible for Republicans to put together enough votes to repeal Obamacare because he would almost certainly veto any repeal legislation and the Republicans would need a two-thirds vote in BOTH the House and the Senate to override Obama’s veto, which would be impossible for Republicans to obtain.

Republicans claim they can use Budget Reconciliation to repeal Obamacare because the Supreme Court called the law a tax—according to them making it subject to reconciliation—and they say they are justified in using the process because Democrats used it to pass Obamacare in the first place.

Are they right?  Let me address the two issues:

Did the Democrats pass Obamacare using Budget Reconciliation?

Answer: NO and YES.

Here is what happened.  After a year of deliberation and wrangling, the Democratic-controlled House and Senate each passed a different version of health care reform in 2009.  On November 7, the House passed its version of the bill on a 220-to-215 vote. On December 23, the Senate voted 60 to 39 to end debate on the bill, eliminating the possibility of a filibuster by opponents. The bill then passed on a party-line vote of 60 to 39 the next day. 

Soon after the Senate passed the Affordable Care Act, Scott Brown was elected to take Ted Kennedy’s seat and the Democrats consequently lost their filibuster proof 60 votes in the Senate. Consequently, the most viable option for the proponents of comprehensive reform was for the House to abandon its own health reform bill, and instead approve the Senate-passed bill.  They knew they could not get an amended bill passed by the Senate since they would not have 60 votes to end a Republican filibuster.  However, a number of House Democrats who had reluctantly backed the president on health care reform didn’t like a number of provisions in the Senate version of the bill such as a provision that would have provided a higher rate of Medicaid reimbursements for Nebraska – the so-called “Cornhusker Kickback” that was designed to win the support of Democratic senator Ben Nelson of Nebraska.

House Speaker Pelosi made a deal to get the reluctant Democrats to go along with passing the Senate version of the bill.  If they would vote for the Senate bill, then the Democratic leadership agreed to immediately introduce and pass separate legislation under Budget Reconciliation amending the Affordable Care Act to address those members’ grievances.  The House passed the Senate bill on March 21, 2010 by a vote of 219 to 212.  The Patient Protection and Affordable Care Act was signed into law by Obama on March 23, 2010.  

to make changes to the Affordable Care Act. The Democrats used reconciliation to pass the amendments. On March 26, 2010, the Senate approved the amendments, 56 to 43, and the House passed them, 220 to 207.  Obama signed the Health Care and Education Reconciliation Act of 2010 into law on March 30, 2010.

So Obamacare—The Patient Protection and Affordable Care Act—was actually passed in normal fashion without the use of Budget Reconciliation.  However, Democrats did use Budget Reconciliation to amend the Act shortly after it was signed into law.

Can the Republicans really use Budget Reconciliation to repeal Obamacare?

Answer:  They may be able to use Budget Reconciliation to repeal some parts of the law but probably not all of the law but then only if they win control of the Senate and the White House and retain control of the House.

Under Senate rules, the Budget Reconciliation process cannot be used if the bill:

  1. does not produce a change in outlays or revenues;
  2. produces an outlay increase or revenue decrease when the instructed committee is not in compliance with its instructions;
  3. is outside the jurisdiction of the committee that submitted the title or provision for inclusion in the reconciliation measure;
  4. produces a change in outlays or revenues which is merely incidental to the non-budgetary components of the provision;
  5. would increase the deficit for a fiscal year beyond those covered by the reconciliation measure; and
  6. would make changes in Social Security.

Some portions, and perhaps all, of the Affordable Care Act may be immune to attack via Budget Reconciliation because they fall under these restrictions.  For, example, the current law reduces the deficit over time.  Any changes might result in increasing the deficit which would not be allowed under Budget Reconciliation.  Also, provisions of the act like restrictions on insurance companies being able to deny coverage for pre-existing conditions probably would be exempt since they don’t produce a change in federal outlays or revenues.  The Senate’s Parliamentarian, Elizabeth MacDonough will have to rule on whether the changes in any repeal legislation met the requirements for Budget Reconciliation.  If she reuled they did not, the Republicans would need 60 votes to override her ruling, something Republicans would not get.

However, many of the key provisions of the law – including the individual mandate to purchase health insurance, the creation of insurance exchanges where low-income families can buy subsidized policies, and Medicare and Medicaid funding measures –probably would meet the reconciliation requirements.

In short, the Republicans probably could repeal some, but not all, of Obamacare using Budget Reconciliation.  Unfortunately, the provisions they could repeal would be some of the most critical to the operation of the law.

In short, the best way to protect Obamacare is to make sure that Obama is re-elected so he can veto any legislation Republicans might pass to repeal the law.  And, NO--the Democrats DID NOT use Budget Reconciliation to pass the original law.

3 comments:

Anonymous said...

I linked this article to a man I know who followed this very closely at the time. Here's his reply:

I've read the article and the basic facts are correct, but he leaves out the important context that greatly influences how one interprets those facts. The margin of victory for the Democrats was razor thin in both the House and the Senate for their initial versions of the law. In the Senate, they needed every single vote, in fact. In the House, the margin was 5 votes, meaning that if three members had changed their votes, the vote would have gone the other way. The votes for passage in the House were not assured until literally the night of the vote. And, there were substantial differences between the House version and the Senate version. The Senate version did not have enough support to pass in the House, and vice-versa.

So, having passed two different bills, the House and Senate needed to negotiate a compromise that would pass both in both chambers. The politics of that was going to be difficult because Reid could not afford to lose a single vote, and Pelosi could afford to lose only two votes. The politics became impossible when Scott Brown was seated after winning the special election in Massachusetts. At that point most people thought Obamacare was dead. Pelosi did not have the votes to pass the Senate bill without substantial changes, and Reid did not have the votes to pass the amended bill.

That's where the chicanery came in I mentioned over the phone. Reid and Pelosi made a deal. Pelosi would abandon the House bill, pass the Senate Bill verbatim, and Reid would agree to the changes demanded by the House, and make them in a separate bill to be brought up later. In itself, there is nothing wrong with that. The problem is that those changes are changes of substantive policy, and could not legitimately be passed as a "budget reconciliation bill". That Bill, the Health Care and Education Reconciliation Act of 2010, is a substantial part of what we now know as Obamacare. Take a look at it yourself and see if you think this bill deals with budgetary issues only, or issues of substantive policy. Reid could not have passed it under ordinary rules. In fact, he passed it with only 56 votes. That should never have happened. Without the promise of that Bill, Pelosi did not have the votes to pass the original Senate bill verbatim, as she did, and Obamacare would never have happened.

I might point out that the blog post is lifted almost word for word without attribution (unless I missed that) from an earlier article from the Fiscal Times. I suppose the plagiarism point is beside the point if the point is to refute the idea that Obamacare was passed "without bending or breaking any rules".

We will never know what the Democrats would have been able to do if they had played by the rules. Suppose the Democrats looked at the changes demanded by the House Democrats and said, "Nope, can't do it. We can't repass the bill in the Senate even as it now stands let alone with these changes because we don't have the votes now that Brown is in. You are just going to have to accept this bill as it is, no changes." The conventional wisdom at the time was that this approach was not going to fly, and that the bill was dead. But that is not how it was done. The legitimacy of the way it actually was done hinges on whether you accept HCERA 2010 as a legitimate budget reconciliation act. I read a lot about that at the time, and my take on it was that it was a transparent charade to call that bill a BRA, a necessary, useful, and successful charade from the point of view of the proponents, but one that did not pass the laugh test and was not really believed even by the proponents.

The Attack Democrat said...

A few comments on your friend’s response:

1. Obamacare (the Patient Protection and Affordable Care Act) was actually passed with 60 votes. Budget Reconciliation was used to pass the Health Care and Education Reconciliation Act which amended Obamacare. So, technically Republicans are wrong if they say Budget Reconciliation was used to pass Obamacare, although it was used to amend Obamacare.
2. Republicans tried to prevent Democrats from using Budget Reconciliation to pass of the Health Care and Education Reconciliation Act of 2010 (HCERA). They introduced amendments to HCERA and sought rulings from the Senate Parliamentarian that the legislation couldn’t be passed under the Budget Reconciliation rules. They got a favorable ruling from the Parliamentarian with regard to two provisions of the Act that dealt with Pell Grants. So, the Parliamentarian of the Senate, who is usually called on to advise on rulings on whether an Act can be passed using Budget Reconciliation, agreed with Democrats that HCERA met the requirements of Budget Reconciliation accept in two cases. Democrats dropped those provisions. People can disagree with the Parliamentarian’s ruling but that was his ruling nevertheless.
3. Democrats could have used Budget Reconciliation even if the Parliamentarian had ruled that the entire HCERA violated the Budget Reconciliation process rules. The Parliamentarian is appointed by the Senate Majority Leader, who was Democrat Reid at the time. If the Reid disagreed with the Parliamentarian, he could have just fired the Parliamentarian and appointed a new one who would change the ruling. Additionally, the official ruling on whether something is appropriate under Budget Reconciliation is made by the Presiding Officer of the Senate who traditionally follows the ruling of the Parliamentarian but isn’t required to do so. Biden, acting as the Presiding Officer could have overruled the Parliamentarian. Of course, that wasn’t necessary because the Parliamentarian with two exceptions (the Pell Grant provisions) ruled that the HCERA met the Budget Reconciliation requirements. No one can be sure whether the Democrats would have taken such drastic action but they could have.

The Attack Democrat said...

Some additional comments:
1. Republicans act as if Budget Reconciliation had never been used in the past to pass legislation dealing with health care. That’s just not true. A number of health care laws have been passed over the last 30 years using the Budget Reconciliation process, so using it to make changes in the Affordable Care Act wasn’t unusual. Here are a few examples:
1982 — TEFRA: The Tax Equity and Fiscal Responsibility Act first opened Medicare to HMOs
1986 — COBRA: The Consolidated Omnibus Budget Reconciliation Act allowed people who were laid off to keep their health coverage, and stopped hospitals from dumping ER patients unable to pay for their care
1987 — Omnibus Budget Reconciliation Act (OBRA '87): Added nursing home protection rules to Medicare and Medicaid, created no-fault vaccine injury compensation program
1989 — OBRA '89: Overhauled doctor payment system for Medicare, created new federal agency on research and quality of care
1990 — OBRA '90: Added cancer screenings to Medicare, required providers to notify patients about advance directives and living wills, expanded Medicaid to all kids living below poverty level, required drug companies to provide discounts to Medicaid
1993 — OBRA '93: created federal vaccine funding for all children
1996 — Welfare Reform: Separated Medicaid from welfare
1997 — BBA: The Balanced Budget Act created the state-federal childrens' health program called CHIP
2005 — DRA: The Deficit Reduction Act reduced Medicaid spending, allowed parents of disabled children to buy into Medicaid
Source: http://www.npr.org/templates/story/story.php?storyId=124009985
2. The Majority in the Senate resorts to the use of Budget Reconciliation when a few Senators use the threat of filibuster to block the passage of important legislation. Some argue and I agree that today the threat of filibuster is used too frequently and has been abused making it almost impossible to get any major legislation passed. Should it have taken 60 votes in the Senate to pass Obamacare? I would point out that many Republicans think it should not take 60 votes in the Senate to abolish Obamacare and have threatened to use the Budget Reconciliation Process to accomplish what they very likely will not have the votes to accomplish—repealing Obamacare. Would it be okay for Republicans to use Budget Reconciliation to amend Obamacare in order to eliminate some of the things like the individual mandate? Would those who are so angry with Democrats for using Budget Reconciliation to amend Obamacare think it would be equally wrong for Republicans to do the same thing?