WHAT RECONCILIATION MEANS
Yesterday the House of Representatives passed Joseph Biden’s 1.9 trillion dollar economic rescue package. It represents the new Democratic administration’s first major effort to deal with the effects of the pandemic on ordinary citizens and on the larger economy. It was passed in the House on an almost party line vote, Democrats for and Republicans against.
Next week the Senate, in which Republicans and Democrats are exactly tied (50–50), will get a chance to make changes. The general assumption seems to be that the bill will survive any elective surgery by the Senate. Then a final version will be approved by the House and the Senate and the Biden administration will have its first legislative victory.
The Biden administration will be able to do that because of a process called reconciliation which avoids the usual Senate requirement of a three fifths super-majority (60 votes) for any important bill it passes. Because Senators of both parties now tend to vote as blocs, that means that a minority of forty Republicans can kill any bill if Republican Leader Mitch McConnell agrees to let them vote on anything.
Reconciliation is endlessly complicated. It may seem more rational if we understand how it came about. It begins with Richard Nixon. Nixon, a former Republican California Senator, had been Vice-President for eight years under Dwight Eisenhower when he ran against John F. Kennedy in 1960. He lost in that close election but came back in 1968 and won.
Nixon, having seen the government’s budgeting problems under Eisenhower, was determined to change things. Going back to 1921 the government’s budget was created by an independent agency, the Bureau of the Budget (or BOB). Non-political civil servants created the budget first, sent it to the President who, at the last minute, could make changes before it was sent to the Congress to pass (Eisenhower famously came out against one of his own budgets because he hadn’t really read it before it was sent over.).
Richard Nixon came into office in 1969 convinced that the government employees in the huge government departments needed more control (under Donald Trump they became the horrible Deep State). He feared that many departmental officials, having been there for years, were simply too liberal. Nixon argued that they needed more control from someone elected by “all of the people”.
So, in 1969 the old Bureau of the Budget disappeared, replaced by a new much larger Office of Management and Budget. The new O.M.B. would be directed by political appointees named by the President. They would create departmental budgets whose spending limits (targets) would be determined by the President. And, the new, much larger, OMB would send people down to the departments whose job was to observe and report back about whether the president’s wishes were being carried out. Those people were referred to in the departments as the “Nazis”.
There was an obvious problem. Members of Congress knew that the Constitution left the determination of government funding to Congress. Richard Nixon was trying to exercise powers that belonged to them. The result was the Congressional Budget Act of 1974 which was designed to take back the Congress’s control over spending. It might seem surprising that Nixon, eager as he was to dominate the process, would sign such a bill but Nixon, under attack for the Watergate scandal, felt that he dare not antagonize anybody, particularly in the Congress. He signed!
The Act created new Budget Committees in both the House and the Senate, made up of members from each of the house’s permanent committees. Essentially, each house had a permanent committee for each of the government’s major departments (Agriculture, Defense, Labor . . .). The new budget committees would create a Budget Resolution by April 15th of each year that would cap spending for each department. Then in August there would be reconciliation so that if a department’s programs went beyond the amount of the earlier budget resolution, it would have to be adjusted to meet its target amount.
Then, to give itself even more control, the Congress included in the Act the right to create a limited number of bills through reconciliation. Those budget committees would be made up of the leading members of the permanent committees. If after the summer if there was a bill that the party majority really wanted, they could instruct their major committees to produce a bill.
That bill had to involve taxing or spending changes (which constitutionally the Congress controlled). Congress wanted the party in the majority to be able to make changes in spending with as little resistance as possible so that Presidents would have less chance to interfere. So those last minute changes could be passed with only a simple majority (one over half) and in the Senate they could not be filibustered (the Senators could not talk the bill to death).
So, think about President Biden and his 1.9 trillion dollar economic rescue package. 1.9 trillion is an almost unimaginable amount of money (a billion is a thousand million, a trillion is a thousand billion). The Republicans in the Senate, in public at least, will be almost unanimously opposed. If that rescue package went through as a regular bill it would require sixty votes, ten of which would have to come from Republicans because the Democrats only have fifty votes. That probably would never happen.
So forty seven years ago the Congressional Budget Act was created to keep Richard Nixon or a later president from talking power away from Congress. Now a Democratic President is using the reconciliation process to get help to Americans despite the resistance of Republicans in the Senate.
This rescue package is only one bill. It was intended in 1974 that there would be only one bill allowed as part of the Budget Committees’ end of year budget reconciliation. The Democrats may have to vote to end the Senate’s ability to filibuster with the three fifths (sixty vote) requirement. That is a story for another day.
H.J. Rishel 2/28/2021
