Senate Democrats say they can now pass the Cut Inflation Act

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The Senate is now considering a climate, health and tax measure with $433 billion in new spending. Without Republican support, Democrats turned to a procedural process known as “reconciliation” — a budget tool that avoids a potential buccaneer.

Reconciliation paved the way for Congressional action almost two dozen times since it was first used in 1980. But the Congressional Budget Act (CBA) of 1974 that created the reconciliation comes with tricky rules. Here’s what you need to know about the process and the potential pitfalls ahead.

What is reconciliation?

Congressional Democrats have signed into law the Congressional Budget Bill on President Richard M. Nixon veto in 1974. This act gave Congress new power over federal budgeting, including the ability to develop a budget plan and change federal laws to ensure that Congress can meet its revenue and spending goals .

The law originally directed Congress must draft two budget resolutions in a fiscal year. The first resolution would propose a draft annual budget, which the second would refine. Budget resolutions establish general parameters for the annual federal budget, but they do not have the force of law. Instead, the CBA authorized an optional “reconciliation” bill that would make the actual changes to the law to bring federal revenue and spending in line with the second budget bill. For example, if the budget proposal included an increase in Medicaid spending to provide health care to the poor, lawmakers could use the reconciliation bill to revamp the federal tax code to help pay for the increased costs. health expenditure.

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Congress rewrote the Budget Act in 1985 to eliminate these second budget resolutions. But reconciliation remained on the books to change federal laws to meet Congressional budget goals. Lawmakers originally viewed reconciliation as a tool to reduce federal deficits, but Congress over the years has stretched in a way that often increases the deficit. For example, the GOP-led Congress in 2017 leveraged reconciliation to cut corporate taxes, valued cost the government nearly $2 trillion in revenue. And in 2021, Democrats passed the nearly $2 trillion economic stimulus package through reconciliation. This time, to secure Senator Joe Manchin III (DW.Va.) of the vote, the measure would actually reduce the deficit — by raising corporate taxes, cracking down on tax cheats and revamping how Medicare pays for prescription drugs.

Why can’t reconciliation be blocked?

Most Senate legislation requires a 60-vote supermajority to interrupt debate and proceed to a vote. When a majority in the Senate does not obtain 60 votes to end debate, it is generally said that a measure has been obstructed. But senators cannot obstruct reconciliation measures because the ABC limits debate to 8 p.m., divided equally between the parties.

The limit, however, does not include time spent reviewing amendments. This means that after debate time expires, senators typically engage in a “vote for rama” — often voting on amendments in the wee hours of the night and ending only with the consent of the 100 senators. The Senate then moves to a final simple majority vote on the measure.

The House and Senate last year – with only Democratic votes – adopted the budget resolution setting the parameters of a reconciliation bill. House Democrats stepped in first, passing a $2.2 trillion reconciliation bill last November titled “Build Back Better.” But Manchin torpedoed the bill last December — leading to on-and-off negotiations this year to whittle the reconciliation measure to his likings and those of Sen. Kyrsten Sinema (D-Arizona), another potential holdout. With a Senate evenly split 50-50, Democrats could afford no defections.

Much to the shock of even Washington insiders, Democrats finally coalesced around this revamped bill last month — renamed the Inflation Reduction Act. Democrats have scheduled a first vote to call the measure on Saturday, with Vice President Harris standing by if her vote is needed to break a tie. If all goes according to plan, the Senate then conducts up to 8 hours of debate, moves to vote-a-rama and heads to final passing votes no later than Monday. Observers expect the House to pass the measure then by the end of the week, despite objections from all Republicans. House leaders wouldn’t have to worry about a rama vote, since House rules allow a majority to prevent amendments if they so choose.

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Already in the 1980s, Senator Robert Byrd (DW.Va.) and others thought the majority parties were abusing the ban on the filibuster of reconciliation to stuff it with provisions unrelated to cutting federal deficits. Thus was born the ABC Byrd Rule to prohibit what the law calls “foreign” materials – generally policy changes that do not have a direct and substantial impact on the federal budget.

The Byrd Rule establishes a six-part test of what is considered “foreign”. But applying the law can be tricky, not least because one of the claws is worded vaguely, leading senators to defer to the chamber impartial parliamentary give an opinion on the conformity of a provision.

Before a reconciliation bill goes to the Senate, supporters and challengers of a provision usually try their arguments for the parliamentarian, which gives the bill a “Byrd Bathto scrub the provisions, she advises violating the Byrd Rule. And once a reconciliation is on the floor, the presiding officer historically relies on the parliamentarian’s advice to determine violations of the Byrd Rule in parts of the bill or proposed new amendments. Senators can challenge a decision, but it takes 60 votes to waive the Byrd Rule or reverse a decision.

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The Byrd bath has already been underway for several weeks to ensure that key elements of the bill comply with the Byrd rule, and the parliamentarian has now blessed the main climatic and prescription drug regimes, which are only a part of the drug price proposals.

Once the bill has been introduced, Republicans can propose tough amendments, in an effort to strip core provisions and force Democrats to cast votes that could be used against them in midterm campaigns. . But the Byrd rule could trigger amendments, and Republicans are unlikely to muster the 60 votes needed to waive the rule. Progressive Democrats could also try to strengthen the bill, but they are unlikely to succeed.

Finally, even if the GOP manages to win amendments, Democrats would have the option of erasing any changes with a final “substitute” known as “wrap around» amendment. But Manchin has sworn never vote for such overhauls again, so it all hinges on keeping the 50 Democratic senators on the same page.