Sunday, August 23, 2009

Considered Forthwith: Budget Committees and reconciliation

Welcome to the 20th 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.

Since we are all interested in passing the public option through reconciliation, this seems an opportune time to look at the House and Senate Budget committees that have jurisdiction over reconciliation. This process, which has existed since 1974, is not used every year, but is being actively considered this year. The major function of the budget committees, however, is to handle the budget resolution, which was done months ago. (CF regrettably missed that opportunity to discuss the Budget Committees.)

Members and Jurisdiction

Normally I list all of the members of the committees and their jurisdictions here. This will be a lengthy and substantive entry, so here are links to the House members, Senate Democratic and Republican members and official statements of jurisdiction of the House and Senate committees.

Kent Conrad is the chair and Judd Gregg is the ranking member of the Senate Committee. John Spratt is the House committee chair and Paul Ryan is the ranking member.

Neither committee has any subcommittees.


Reconciliation is not the main function annual function of the committees. That would be writing the annual budget resolution, which is discussed below. The Budget and Impoundment Control Act of 1974 established the modern budget process including the optional reconciliation process and the budget resolution. Reconciliation... utilized when Congress issues directives to legislate policy changes in mandatory spending (entitlements) or revenue programs (tax laws) to achieve the goals in spending and revenue contemplated by the budget resolution. First used in1980 this process was used at the end of a fiscal year to enact legislation to fine tune revenue and spending levels through legislation that could not be filibustered in the Senate. The policy changes brought about by this part of the budget process have served as constraints on the levels of mandatory spending and federal tax revenues which also has served since 1981 as a vehicle for deficit reduction.

Reconciliation is immune to a filibuster because debate is limited to 20 hours by the statute. That's why we are considering using reconciliation to pass health care reform, or at least the public option. With out the filibuster threat, the Democrats only need to muster 50 votes plus the vice president's tie breaker for passage.

The health care reform bill was included in both the House and Senate budget resolutions for fiscal year 2010. More on the process of this below. The important point is that reconciliation was included in the budget resolutions, so the reconciliation process may take place this year.

Under the rules of reconciliation, the budget committees direct the authorizing committees to submit their pieces of the reconciliation bill. It is up to the budget committees to combine these bills into one omnibus bill to be reported to the full chamber with fiscal reports from the Congressional Budget Office and the Joint Committee on Taxation. (Honestly, I cannot make heads or tales of the current reports on the reform bills. However, I do see a few key Blue Dogs, including Max Baucus and Kent Conrad on the committee.) The work of the Budget committees, however, is largely administrative since they are not allowed to make substantive changes to the bills that make up the omnibus. If the public option, for example, is in one bill, then it will be in the omnibus.

From there, the bill goes through the normal floor votes and conference report process with the exception of the 20 hour limit on debate in the Senate and the possibility of points of order outlined next.

At the moment, our current debate is not so much whether the public option can pass under reconciliation. The current whip count seems to indicate that a majority are in favor of establishing a public health insurance agency. The real problem is whether the public option may even be included in a budget reconciliation bill. This is due to the Byrd Rule. The Byrd Rule rule, originally propagated by Senator Robert Byrd in the mid 1980s, defines what constitutes "extraneous matter" that would be subject to a point of order by any Senator. These six tests for identifying extraneous matter are:

* do not produce a change in outlays or revenues;

* produce changes in outlays or revenue which are merely incidental to the non-budgetary components of the provision;

* are outside the jurisdiction of the committee that submitted the title or provision for inclusion in the reconciliation measure;

* increase outlays or decrease revenue if the provision's title, as a whole, fails to achieve the Senate reporting committee's reconciliation instructions;

* increase net outlays or decrease revenue during a fiscal year after the years covered by the reconciliation bill unless the provision's title, as a whole, remains budget neutral;

* contain recommendations regarding the OASDI (social security) trust funds.

A point of order can be waived if 60 members vote in favor of waiving it. If the point of order is upheld, the provision would be struck from the bill. Of course, that essentially defeats the point of running the public option through reconciliation to get around the filibuster threat. Now, there are some exceptions to the Byrd Rule that can eliminate the point of order. They are:

* a provision that mitigates direct effects attributable to a second provision which changes outlays or revenue when the provisions together produce a net reduction in outlays;

* the provision will result in a substantial reduction in outlays or a substantial increase in revenues during fiscal years after the fiscal years covered by the reconciliation bill;

* the provision will likely reduce outlays or increase revenues based on actions that are not currently projected by CBO for scorekeeping purposes; or

* such provision will likely produce significant reduction in outlays or increase in revenues, but due to insufficient data such reduction or increase cannot be reliably estimated.

When a member makes a point of order, the presiding member rules whether or not it is in order (i.e may even be voted upon). In making this decision, the presiding member confers with the parliamentarian. The parliamentarian is a non-partisan professional who has gone through years of training in the rule and procedures of Congress. When the parliamentarian makes a decision it is highly likely that the presiding officer will rule the same way. The presiding officer, of course, may rule the other way. However, this sets a dangerous precedent. Essentially, the presiding officer is saying that it is fine to disregard the finer points of the chamber rules as interpreted by the person who was hired to know this information.

It seems very likely that the public option would violate one or more of the tests of the Byrd Rule. Therefore, the supporters will need to show that it meets one of the exceptions. In other words, they will need to show that it will save money in the long run despite the required start up costs. This will also necessarily require splitting the bill into the financial components and the sections that do not affect the federal budget.

In this case, the parliamentarian's decision would be heavily influenced by estimates from the Congressional Budget Office and the Joint Committee on Taxation (linked above and the subject of next week's entry). This seems like a good time to discuss CBO, over which the committees have jurisdiction.

Congressional Budget Office

CBO was also created by the 1974 budget reform act to serve as a source of objective budget information and long-term spending and revenue projections for Congress. Their reports do not include policy recommendations. In other words, the numbers are what they are. However, the CBO director, under Congressional testimony can be pressed for recommendations based on the office's reports and studies.

CBO is not to be confused with the Office of Management and Budget (OMB), which does similar work for the President. The CBO budget for FY 2009 is $44.1 million and employs 235 people, most of whom hold advanced degrees in public policy or economics. OMB's FY 2009 budget is about $72.8 million and has a work force of 489 full time equivalents, meaning that their employees work the equivalent of 489 40-hour weeks. Why have two budget offices? Long-term budget projections are as much art as science. Two sets of experts can come to radically different conclusions on budget forecasts. Therefore it is advisable to essentially get a second opinion.

One major role of the CBO is to produce a cost estimate on every bill that is reported from any committee. In mid July, CBO released a report on the Democrats' health care reform plan. The Senate Budget Committee promptly held a hearing with CBO director Douglas Elmendorf. The result of this hearing was the revelation that the current plan might be a drain on the budget, which sent the fiscal conservatives into a panic and made them waver in their support for a government-run health insurance company. The July 16 hearing was really a turning point in the debate. This hearing also illustrates another key power of the Budget committees: through their hearings the members have the opportunity to shape budget debates.

Like any economic projection, these numbers are only estimate. Furthermore, CBO is quick to point out that the July projections are not based on complete information:

The figures released yesterday do not represent a complete cost estimate for the legislation. In particular, the estimated impact of the provisions related to health insurance coverage is based on specifications provided by the committee staff, rather than on a detailed analysis of the legislative language.

That means that additional information may change the budget forecasts. I have also heard an argument that allowing the Bush tax cuts (which were also passed under reconciliation incidentally) could cover the costs of the public option.

To be accurate, the July time line looked like this: CBO released a preliminary analysis of the House bill July 14. The Senate Budget Committee held their hearing July 16. CBO released it's latest report July 17.

To keep up to date with CBO's health care reform reports, bookmark this page. The climate change reports are here.

The other major roles of CBO include overseeing the Troubled Assets Relief Program (TARP, or the bank bailout), making long-term projections on the budget and entitlement programs, issuing monthly budget reports to Congress on current incomes and outlays, and assisting with the annual budget resolutions.

Budget resolutions

For a full rundown of the budget process, please see my primer on the budget process.

A major role of the Budget committees is to produce the annual budget resolutions. These are brief statements outlining the amount of money that may be spent on each of 21 "budget functions." The budget functions are listed herehere. If the President and Congress are of the same party, the budget resolutions will be largely based on a President's budget. If relations between Congress and the President are strained, the budget could be declared "dead on arrival" and the budget resolution will be radically different from the President's budget.

In addition, any reconciliation plans must be included in the budget resolution. Under the original 1974 budget reform act, two resolutions were required and reconciliation happened in the second resolution in the fall. This was problematic, The point of reconciliation is to reduce spending or increase resolution. However, by the fall the appropriations committees have already settled on the outlays and it proved difficult to cut funding that had already been appropriated. After that experience, Congress shifted to using only a single budget resolution in early spring.

Once the Budget committees report the budget resolutions, they go to the full chamber for a vote. The resolution is not subject to a filibuster in the Senate as debate is limited to 50 hours. These resolutions become rules of the chamber and it takes a supermajority votes to exceed spending limits to spend more than the amount listed in the resolution.

Ongoing studies

Finally, the committees continue to oversee the budget process and study proposals to change the current budget or the process in general. For example, the House Budget Committee has held hearings on PAYGO (a law requiring all spending to be covered by revenue or spending cuts elsewhere), the economic case for health care reform, and Budgeting for Nuclear Waste Management. The Senate Committee has held fewer hearings and several recent ones have focused on Chairman Conrad's home state of North Dakota.

Finally, if anyone is still under the delusion that the Republicans operated like the party of fiscal responsibility under George W. Bush, consider these numbers from the House Budget Committee which were current as of November, 2008 just after the election:

Budget Surplus or Deficit:
Fiscal Year 2001: surplus of $128 billion
Fiscal Year 2008 as projected in 2001: surplus of $635 billion
Fiscal Year 2008 (actual): deficit of $455 billion
Fiscal Year 2009 projected in the Administration's July 2008 Mid Session Review: deficit of $482 billion

Debt held by the public in January 2001: $3.4 trillion
Debt held by the public in November 2008: $6.3 trillion
Statutory debt limit* in January 2001: $5.6 trillion
Statutory debt limit* now: $11.3 trillion
*(Statutory debt limit includes debt held by the public and intragovernmental holdings)

Foreign-Held Debt:
Foreign-held debt: $2.7 trillion - more than two and half times its level in 2001
More than 80 cents of every dollar of new debt is bought by foreign investors

Interest on National Debt:
Fiscal Year 2008 debt service as projected in 2001: $27 billion
Fiscal Year 2008 debt service (actual): $249 billion

For more about other committees, check out my previous work:
Senate Energy and Natural Resources Committee
Senate and House Armed Services Committees
Small Business Committees
Senate Environment and Public Works Committee
House Select Committee on Energy Independence and Global Warming
The Committee Primer
House Education and Labor Committee
Senate Finance Committee
Senate HELP Committee
Senate Judiciary Committee
House Energy and Commerce Committee
House Ways and Means Committee
House and Senate Appropriations Committees
House Intelligence Committee
House Judiciary Committee
House and Senate Ethics Committees
House Science and Technology Committee
House Financial Services Committee
House Rules Committee
The Role of Committees

Crossposted on Docudharma, Congress Matters and Daily Kos.

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