Sunday, May 17, 2009

Considered Forthwith: House Ways and Means and reconciliation

Welcome to the eighth installment of "Considered Forthwith."

This weekly series looks at the various committees in the House and the Senate. Committees are the workshops of our democracy. This is where bills are considered, revised, and occasionally advance for consideration by the House and Senate. Most committees also have the authority to exercise oversight of related executive branch agencies. If you want to read previous dairies in the series, search using the "forthwith" tag. I welcome criticisms and corrections in the comments.

For the next few weeks, health care reform through reconciliation will be a common theme in this series. Check out this Front Page story on Congress Matters for a description of the reconciliation process.

This week, I will look at the House Ways and Means Committee. The chair is Charlie Rangel of New York and the ranking member is Dave Camp of Michigan. In general, Ways and Means deals with tax issues, trade, Social Security, and health insurance. http://

A note on the names of committees: The Senate counterpart to the House Ways and Means Committee is the Senate Finance Committee. The Senate counterpart to the House Financial Services Committee, which deals with banking and other financial institutions, is the Senate Banking Committee.

Here are the members of the Ways and Means Committee:

Democrats: Charles B. Rangel, NY, Chairman; Fortney Pete Stark, CA; Sander M. Levin, MI; Jim McDermott, WA; John Lewis, GA; Richard E. Neal, MA; John S. Tanner, TN; Xavier Becerra, CA; Lloyd Doggett, TX; Earl Pomeroy, ND; Mike Thompson, CA; John B. Larson, CT; Earl Blumenauer, OR; Ron Kind, WI; Bill Pascrell Jr. , NJ; Shelley Berkley, NV; Joseph Crowley, NY; Chris Van Hollen, MD; Kendrick Meek, FL; Allyson Y. Schwartz, PA; Artur Davis, AL; Danny K. Davis, IL; Bob Etheridge, NC; Linda T. Sanchez, CA; Brian Higgins, NY; John A. Yarmuth, KY

Republicans: Dave Camp, MI, Ranking Member; Wally Herger, CA; Sam Johnson, TX; Kevin Brady, TX; Paul Ryan, WI; Eric Cantor, VA; John Linder, GA; Devin Nunes, CA; Pat Tiberi, OH; Ginny Brown-Waite, FL; Geoff Davis, KY; Dave G. Reichert, WA; Charles W. BoustanyJr. , LA; Dean Heller, NV; Peter J. Roskam, IL

Last week, Considered Forthwith looked at the Appropriations Committee to see how Congress spends money. Conversely the Ways and Means Committee (and the Senate Finance Committee) are concerned with ways to raise money. In other words, these are the people who deal with tax policy.

The Ways and Means Committee is one of the most powerful committees owing to its broad jurisdiction, particularly its role in setting tax policy, directing entitlement programs, and overseeing international trade. Because the committee is so strong, members are not usually permitted to sit on other committees.

Constitutional authority

Article I, Section 7, of the Constitution:

All Bills for raising Revenue shall originate in the House of Representatives; but the Senate may propose or concur with Amendments as on other Bills.

Article I, Section 8, of the Constitution:

The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and...To borrow Money on the credit of the United States.

16th Amendment:

The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.

These points are important. The Founders, or at least the Federalists among them, recognized that Representatives are more closely tied to the people. (See in particular Federalist 52-57.) This is because most legislative districts are smaller than states, so House members are closer to the people they represent. Additionally, House terms are much shorter than Senate terms. This allows the people the opportunity to vote out House members much earlier than Senators. (It is also noteworthy that Senators were selected by state legislatures until 1913.)

Therefore, the authors of the constitution decided that tax measures should originate in "the people's house." This power to write the original tax measure makes the Ways and Means Committee more powerful than the Senate Finance Committee.


The point of reconciliation is to save money and/or increase revenue. This can be done through raising taxes and fees and/or savings in entitlement programs. As I detailed last week, entitlements include Social Security, Medicare, and Medicaid. To clarify, Medicare covers hospital costs for elderly Americans and some disabled people. and Medicaid is a similar program for low income Americans. Social Security includes both the familiar monthly payments to retired Americans and coverage for disabled people who are not covered by veterans' benefits.

One of the jurisdictions of the Ways and Means Committee is Social Security and Medicare. Medicaid falls under the jurisdiction of the House Energy and Commerce Committee's Subcommittee on Health.

Presumably, any health care reform will include reforms to Medicare and Medicaid, so these committees will play a key role in the process. By extension, that means some key players will be Ways and Means Chair Rangel, Subcommittee on Health chair Fortney Pete Stark of California, Energy and Commerce Committee Chair Henry Waxman and Subcommittee on Health Chair Frank Pallone Jr. (Hint, these are people to contact if President Obama and House Speaker Nancy Pelosi decide to pursue the reconciliation route.)

As we are aware, reconciliation bills are effectively not subject to a filibuster. However, reconciliation must be undertaken to save money or raise revenue. Additionally, reconciliation instructions must be included the chamber's budget resolution in order for the process to begin and it is not used every year. (For example, the process was authorized in the 1974 budget act, but not first used until 1980.) Reconciliation instructions were included in the fiscal year 2010 House Budget Resolution, but not the Senate resolution. Regardless, with Democratic majorities in the Senate and the committees, a reconciliation bill has a good chance of passing the both the House and Senate.

So how can we say that spending money on a public health care program will reduce costs? The problem with Medicare and Medicaid is that they do not cover primary care like routine doctor visits. Many uninsured people will not see a doctor when they get sick. When their conditions worsens, a very expensive visit to the emergency room is the next step. Instead of a payment of a couple hundred dollars for a visit to a doctor to deal with a minor problem, Medicaid is paying thousands of dollars for an ER visit and hospitalization for acute cases.

Unfortunately, public health coverage does not necessarily cover all health care costs. This means that people least able to afford huge medical bills are stuck with enormous debt. This, in turn, increases the rate of personal bankruptcy. If more people are caught up in the cycle of bankruptcy and ruined credit ratings, fewer people are able to obtain credit to keep the economy rolling.

There will most likely be upfront costs associated with health care reform. However, the long-term benefit will be lower health care costs (and thus fewer payments from Medicaid/Medicaid or whatever program emerges) and fewer personal bankruptcies. For a more in depth discussion of this rationale, check out this old diary of mine.

(On a personal note, I used to work at a job that required me to run credit checks. The single largest reason for ruined credit was unpaid medical bills.)

The full breakdown of the committee's jurisdiction is available here. Here's the highlights and I will get into the meat more in the subcommittees section.

The committee handles legislation related to taxation, both new laws and revisions to the existing tax code.

As noted above, the committee handles any changes to the Social Security and Medicare laws. In addition, the Temporary Assistance for Needy Families (TANF) program. TANF is a block grant to states that is used to encourage people to transition from welfare to work. Recipients must work while receiving the assistance and payments are limited to five years. There are also incentives to encourage marriage to reduce "non marital births." I do have some problems with this. For one thing, there is the danger that people will marry for money, not love. For another, same sex marriage is obviously not included.

Tariff and international trade legislation also falls under the committee's jurisdiction. This covers trade agreements like NAFTA, customs, import restrictions and dumping, grants of normal trade relations status, and budget authorization for international trade organizations.

The committee also has jurisdiction over laws covering a number of child protection programs. These include adoption assistance (including adoption of special needs kids), child support payments, foster care, and child welfare.

Finally, the committee has jurisdiction over unemployment compensation programs and low income energy assistance.

That's fairly comprehensive and illustrates the importance of this committee.

Powers no longer retained by the committee
Since the Ways and Means Committee was established as a standing committee in 1802, the jurisdiction of the committee has changed several times. Two key changes occurred in 1865, when appropriations was taken from the committee and given to the newly formed Appropriations Committee, and in 1974 when the committee ceased to appoint members of other committees. That power is now retained by the parties. Specifically, the House Democratic Steering Committee controls committee assignments for the party and the Republicans have a similar committee to make their own assignments.

There are six subcommittees under the House Ways and Means committee.

Subcommittee on Trade. Sander Levin of Michigan is the chair and Kevin Brady of Texas is the ranking member. As the name indicates, this subcommittee deals with the international trade bills handled by the committee. The formal jurisdiction is available here.

Subcommittee on Oversight. John Lewis of Georgia is the chair and Charles W. Boustany Jr. of Louisiana is the ranking member. Like most of the other committees, Ways and Means has an oversight subcommittee that investigate allegations of wrong-doing in the Executive Branch and monitor their activities. The subcommittee's oversight functions include, but are not limited to, the Internal Revenue Service and the Social Security Administration. The committee chair and the chair of any other committee with jurisdiction must approve any hearings or investigations of the subcommittee. In other words, if Rangel doesn't want an investigation, it won't happen. The full jurisdiction is described here.

Subcommittee on Health. Pete Stark of California is the chair and Wally Herger of California is the ranking member. This is the subcommittee that deals with health care, health delivery systems, and health research. Hint: this is the subcommittee that would deal with health care reform. Chairman Stark is very supportive of health care reform and is not enamored of the high levels of military spending. Also see this recent press release from the committee's website addressing the long term solvency of Madicare. Here is the full description of the subcommittee's jurisdiction.

Subcommittee on Social Security. John S. Tanner is the chair and Sam Johnson of Texas is the ranking member. This one is straight forward. They handle any bills dealing with Social Security, disability insurance and Railroad Retirement. Whenever the media decide to get paranoid about long term gloom and doom predictions about the projected year Social Security will go bankrupt, this is the subcommittee that has to deal with it. The current projection for bankruptcy is 2037. The subcommittee's jurisdiction is described here.

Subcommittee on Income Security and Family Support. Jim McDermott of Washington is the chair and John Linder of Georgia is the ranking member. This is the subcommittee that deals with child protection services, adoption, TANF, welfare, food stamps, and energy assistance. The full jurisdiction is described here.

Subcommittee on Select Revenue Measures. The chair is Richard E. Neal of Massachusetts and Pat Tiberi of Ohio is the ranking member. This is essentially and "other" subcommittee. The entire jurisdiction is described as:

The jurisdiction of the Subcommittee on Select Revenue Measures shall consist of those revenue measures that, from time to time, shall be referred to it specifically by the Chairman of the full Committee.

Basically, if a revenue measure is referred to Ways and Means and it does not fall under the jurisdiction of any other subcommittee, this one gets the bill. All things considered, this is not typically the glamor subcommittee.

That's it for this week. Next week will probably be the House Energy and Commerce Committee. There is a lot going on there, including Medicaid and the cap and trade proposal.

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