Why Elizabeth MacDonough Will Be the Most Powerful Person in America, by Sam Wice

by Guest Blogger — Wednesday, Nov. 30, 2016

In 2017, the most powerful person in America will not be President Trump, a swing vote on the Supreme Court, or a Congressional leader, but the non-partisan Senate Parliamentarian. This is because she will be the arbiter of the budget reconciliation process.

Budget reconciliation is a method of passing legislation in the Senate that avoids a filibuster. Originally, it was designed for the annual budget process, which sets the amount of money Congress can spend. However, the Senate majority party has used the advantage of budget reconciliation avoiding a filibuster to pass controversial legislation that could not get a filibuster proof majority. Nevertheless, the uses of budget reconciliation are limited and highly technical. The general restrictions are that budget reconciliation can only be used for spending, revenue, and the debt limit. Likewise, budget reconciliation can generally only be used once per fiscal year and all aspects of the legislation must be under the jurisdiction of the same committee.  Additionally, legislation that would increase the deficit cannot last longer than ten years. Because these restrictions are set by law, the Senate cannot easily change the restrictions like it did when removing the filibuster for most Presidential nominees.

Even with these restrictions, Republicans will likely be forced to use budget reconciliation to pass its policy goals. Even though Republicans control both houses of Congress and the Presidency, the filibuster will limit Republicans’ ability to pass legislation. With Senate Democrats unlikely to support President Elect-Trump’s major policy goals of repealing Obamacare, repealing Dodd-Frank, and passing tax cuts, Senate Republicans will likely need to pass the legislation through reconciliation.

Republicans’ attempts to use reconciliation will be a little easier because Congress failed to pass a budget last year. Thus, Senate Republicans will have two opportunities in 2017 to use budget reconciliation. For instance, Republicans could use the first budget reconciliation to repeal Obamacare and the second budget reconciliation to pass more complicated legislation such as a new healthcare system and/or the Trump tax cuts.

However, Republicans will likely not be able to fully pass any of President Elect-Trump’s polices through budget reconciliation. Elizabeth MacDonough will determine how much of the legislation Republicans can pass.

With Obamacare, Republicans could repeal the heart of Obamacare, but many of the regulations and exchanges would likely remain. Already, Congress has used reconciliation to pass a bill in 2015 to remove many of the taxes (including the requirement to purchase insurance) and subsidies included in Obamacare. Congress could easily include those provisions in another budget reconciliation bill. However, the federal exchanges are more of a gray area. They could be considered spending because they require appropriations to operate them. Alternatively, they could be considered more regulatory because they determine how people can access healthcare.  The decision will ultimately be up to the Senate Parliamentarian. Regarding the provisions most unlikely to be allowed in a budget reconciliation bill, it is good that Trump does not want to overturn the restrictions on preexisting conditions and children under 26 being included in their parents’ healthcare because those requirements do not involve revenue or spending.

With Dodd-Frank, most of the legislation likely could not be repealed through budget reconciliation because the law is largely related to regulation.  However, like the exchanges, the Consumer Financial Protection Bureau (“CFPB”) will be a gray area.  The CFPB could either be considered spending on an agency or creation of a regulatory agency.

In regards to the Trump tax cuts, the entirety of any tax cuts would likely satisfy the requirements of budget reconciliation because they are revenue matters.  However, the tax cuts could only last for ten years because they would likely add to the deficit.

At the end of the day, all these debates will not be academic and Elizabeth MacDonough will be the arbiter of what Senate Republicans can accomplish with a simple majority.

 

Sam Wice is an attorney adviser for the U.S. Government, a former analyst at the Congressional Budget Office, and a former Council member of the American Bar Association’s Section of Administrative Law and Regulatory Practice. The views expressed herein are those of the author and do not necessarily reflect the views of the U.S. Government.

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