Progressives unify against Democrat leaders who won’t fight for policies like Green
Why using reconciliation to pass Biden’s COVID-19 stimulus bill violates the original purpose of the process
Speaker of the House Nancy Pelosi and other top Democrats meet with reporters before the House voted to pass a $1.9 trillion pandemic relief package on Feb. 26, 2021. AP Photo/J. Scott ApplewhiteReconciliation – it’s a term federal budget experts would understand, but for the rest of us, it sounds like what you do with a family member you haven’t talked to in years. It’s also the process congressional Democrats plan to use to pass President Joe Biden’s US$1.9 trillion COVID-19 rescue and stimulus bill in the Senate. We asked Raymond Scheppach, who is a public policy scholar at the University of Virginia and a former deputy director at the Congressional Budget Office, to describe reconciliation and explain why its use now is causing such controversy. What is reconciliation, and how is it used in Congress? Reconciliation is a legislative process originally intended to reduce federal budget deficits. In 1974, lawmakers decided they had to deal with a recurring problem: If more money was spent than expected or revenues didn’t meet projections, the nation’s deficit grew. But lowering deficits is politically difficult; to do it, Congress needed to either increase revenues, cut spending or both. That usually meant reducing entitlements and other mandatory spending – like nutrition assistance for children – or increasing taxes. So legislators created this process called “reconciliation” that could be used to reconcile actual spending with Congress’ previously adopted spending targets. Here’s the key part that addressed the problems legislators faced when cutting spending or hiking taxes: Budget moves made under reconciliation could not be filibustered. Lawmakers believed this could ease the political difficulty associated with lowering deficits over the long term. An important point: Reconciliation could be used only to change taxes, mandatory spending like farm price supports and entitlements such as Social Security or Medicare. President Joe Biden holds a meeting with business leaders about his COVID-19 bill in the Oval Office of the White House, Feb. 9, 2021. Saul Loeb/AFP via Getty Images Does using reconciliation for the COVID-19 bill represent a hijacking of the original purpose of the process? It’s important to look back at the 1974 Act to determine the purpose of the reconciliation provision and how it has changed over time. A provision that was created in 1974 to reduce deficits is now being used to do the opposite: dramatically increase deficits. So contrary to reconciliation’s original purpose, it was used for the 2001, 2003 and 2017 tax cuts, which substantially increased deficits. Congress could do that because the restrictions on reconciliation’s use in the Senate have been reduced over time so that now major tax cuts or omnibus spending bills are allowed. It was also inappropriately used to pass modifications to the Affordable Care Act, which significantly increased spending even though it also raised revenues sufficient to offset the spending. Even though it was budget-neutral, it did not reduce the deficit. The $1.9 billion Biden COVID-19 bill would also be an inappropriate use relative to the original intent of the provision, as it would substantially increase the deficit. In 2001, the GOP used reconciliation to push George W. Bush’s tax cuts through Congress. Here, on June 7 of that year, Bush leans over after he dropped a pen as he signed his $1.35 trillion tax cut bill at the White House. AP Photo/Ron Edmonds How often has reconciliation been used? The reconciliation provision has been used by both parties more than 21 times since the 1980s. In some cases, such as the 1990 and 1993 Omnibus Reconciliation Acts, the major purpose was to cut spending and increase revenues. Each of those laws reduced the deficit by a little over $700 billion over five years….