The Upcoming Budget Resolution: What Reconciliation Instructions Might It Contain?

Normally, by this point in the year, Congress would have already began the process of marking up the 2011 budget resolution. The process got pushed back due to the work on the new health care law, but that means Congress will begin working on it soon after they get back from recess next week. Potentially the most important part of the new budget resolution is what if any budget reconciliation instructions Democrats choose to add. If you want to pass a reconciliation bill in the Senate that can't be filibustered, to overcome Republican obstructionism, you first need to have reconciliation instructions included in a budget. What reconciliation instructions are included in the budget are critical to passing laws over potentially Republican and conservative Democratic obstructionism, and serves as a clear indication of where the Democratic leadership’s true priorities lay.

I, obviously, care deeply about health care reform, and the new law needs massive improvements made to it. That is why I strongly hope the new budget resolution contains reconciliation instructions dealing with health care. If health care reconciliation instructions are included, that at least gives Democrats the option to deal later in the year with several problems currently in their new law.

Below is a list of additions and improvements to health care reform that I believe can potentially be made using reconciliation (note: some might possibly violate the Byrd rule):

1. National public option


2. Medicare buy-in


3. Direct Medicare drug price negotiations


4. Force/encourage the adoption of a single provider reimbursement negotiator (an all-payer system) for all insurers in the state, or at least for all policies sold on the new exchanges


5. Remove the cruel five-year Medicaid waiting period for legal immigrants


6. Increase minimum medical loss ratio to 92%


7. Create a national exchange (to get around the Byrd rule, if need be, possibly improve the new OPM exchange and provide financial incentives to states not to start their own exchanges)


8. Reduce annual out-of-pocket caps


9. Strengthen risk adjustment mechanisms and/or add rewards for quality payments on the exchange


10. Improve the state opt-out provision (would potentially allow for state single payer)


11. Allow for extended COBRA coverage until 2014


12. Replace convoluted free rider provision with a real employer mandate


13. Tax direct-to-consumer prescription drug advertising

I would hope that any money saved by these ideas would be redirected as block grants to be used by states willing to start most reforms before 2014. Even if Democrats don't want to pursue the reforms I've outlined above, there are some serious issues they need to deal with. The money for the new high risk pools is insufficient and will run out well before 2014. Also, states are seriously struggling with budget problems, and providing some added short-term funding for Medicaid would be a smart potential use of health reconciliation instructions.

Other uses of reconciliation

While I care about health reform, there are many other potential uses of reconciliation that Democrats might be more willing to pick up this year. Basically, anything that deals with the budget should survive the Byrd rule and could potentially be dealt with using a reconciliation bill. Ideas include but are not limited to:

1. Cap and trade and/or a new greenhouse gas tax


2. Public financing of federal elections to deal with some fallout from the Citizens United ruling


3. Some form of banking regulation to deal with “too big to fail” (new taxes/fees on over-leveraging, firms over a set size, certain transactions, firms with commercial and “shadow” banking, etc., could make it unprofitable/impractical for banks to get too big to fail)


4. Reforms to corporate welfare farm subsidy programs


5. General tax reform to deal with egregious loopholes and corporate welfare programs

Reconciliation instructions are our best hope for progressive legislation

I would be very disappointed if we were denied the possibility of a real vote on the public option, as Harry Reid implied he would allow, because they did not include budget reconciliation instructions that could be used for health care. Although I know there is probably a strong desire to deal with other issues besides health care right now in Congress.

On the other hand, I would consider it an act of legislative malpractice--and a direct assault on everyone who votes for Democrats based on the policy promises--if the new budget resolution does not contain any reconciliation instructions at all. It would be unilateral disarmament against Republicans who have promised to obstruct at every turn. Reconciliation is currently the Democrats’ best tool to deliver on aspects of their party platform, and, if they throw that away, it would be a bold declaration that they have zero desire to govern or deliver for their supporters. Including reconciliation instructions for anything, regardless of what for, is the bare minimum that should be expected from Congressional Democrats to show they will not let the Republican political strategy of pure obstructionism shut down the legislative process.

I will be waiting to see exactly what reconciliation instructions are included in the upcoming budget and what they could be used for. It is something the entire progressive community should be focused on intensely because it will be a good indication of whether Congressional Democrats feel any obligation to fulfill their policy promises.