I posted this on Saturday morning but it kind off fell of the radar in the snooze, so I am re-posting it so more people can see it and hopefully learn something new!
This is long and researched diary about Reconciliation, sunsets & the Byrd rule. So read on if you need to refresh your info about ANY parts of the current health care bill process and Reconciliation (especially sunsets!).
We have heard about what can and cannot pass a reconciliation bill and the Byrd rule here. We have heard about sunsets and how ALL reconciliation bills need one (False). There are a LOT of misinformation, diaries like this are just one example:
and than there are "pundits" who are spreading myths who should know better especially the ones who worked on the hill before. Here is a nice gem from Lawrence O'Donnell last night on Keith Olbermann:
(If anyone knows how to embed MSNBC videos without getting errors let me know)
The summery of his talk: ANY reconciliation bill will need MULTIPLE 60 vote roll calls, including the PO (which he says wont survive without 60 votes).You are dead wrong Lawrence, I will go through that the reasons below. Not sure why he would do this because he should know better but on the other hand he has been VERY negative of the chances of any HC bills any time I have heard him (even couple of months ago).
I will try not to be too verbose or post excessive texts since the rules of the senate are boring anyway!!
The Byrd rule was created by senator Robert Byrd (D-WV) in 1985 to limit the laws that can pass through reconciliation (1974).
Here is provisions Byrd rules limits in a bill that can pass Recon.:
1. if it does not produce a change in outlays or revenues;
2. if it produces an outlay increase or revenue decrease when the instructed committee is not in compliance with its instructions;
3. if it is outside the jurisdiction of the committee that submitted the title or provision for inclusion in the reconciliation measure;
4. if it produces a change in outlays or revenues which is merely incidental to the non-budgetary components of the provision;
5. if it would increase the deficit for a fiscal year beyond those covered by the reconciliation measure, though the provisions in question may receive an exception if they in total in a Title of the measure net to a reduction in the deficit; and
6. if it recommends changes in Social Security.
I will go through the relevant parts of those rules (that may affect the public option as well) to make it short and sweet: Rule 1, 2, 4 , 5.
Any provision that violates one of those 6 NEEDS 60 votes to stay in the bill. So theoretically for example things like regulations can pass via reconciliation if they have 60 votes just for those provisions. That is just a side fact that hasn't been discussed a lot. For purposes of not repeating my self all provisions that address the budget are legally judged by CBO scores and nothing else.
First of all lets address Laurence's claims that there will need to be be 60 votes for reconciliation bills because the big bad repugs can just raise point of orders left and right and call for roll calls. Those point of orders have to have MERIT to be considered by the chair (Biden). If the chair (adviced by the parliamentarian) decides the republicans objections have no merit then there are NO roll calls (unless you want to over rule Biden's judgment, which will require republicans to produce 60 votes). If the parliamentarian advices Biden (but Biden has the legal final word) that an objection has MERIT then we would need 60 votes. In other worlds Biden has veto power over republican objections and stuff that have merit will NOT run afoul of republicans. More on the role of the parliamentarian, the chair and points of orders here.So lets proceed to what point of orders have merit! especially in regards to the public option.
The Byrd Rules:
- if it does not produce a change in outlays or revenues;
The PO does that, the weakest PO produces deficit Reductions of 25 billion and further deficit reduction in out years according to CBO. The strongest PO (tied to medicare +5) creates 110 billion savings over 10 years and far more in out years (CBO).
- if it produces an outlay increase or revenue decrease when the instructed committee is not in compliance with its instructions;
That is the instructions passed in US FY 2010 Budget .
Off top of my head the instructions are that a HC bill should reduce budget deficits by more than 1 billion over 5 years. That is not going to be a hurdle for the PO which saves a lot more.
- if it produces a change in outlays or revenues which is merely incidental to the non-budgetary components of the provision;
This does not effect the PO since it is a stand alone provision. For example if policy items are attached to something that reduces the deficits (like PO) they wont be able to pass with 50 because those policies are merely incidental to the item that reduces the deficits (ie trying to attach anti-trust or a mandate to the PO).
- if it would increase the deficit for a fiscal year beyond those covered by the reconciliation measure, though the provisions in question may receive an exception if they in total in a Title of the measure net to a reduction in the deficit;
Here is where Conrad and sunsets come in. The bold part highlights the years covered by the a budget reconciliation measure. It can be 5 or 10 years (or others), thanks to Kent Conrad it is 5 years as opposed to 10 in our case.
What does this mean? here comes the sunset parts!! Since we have a 5 year budget window ANY bill that creates "deficits" after that 5 year (which are years 5 to 10, since a budget window can't be more than 10 years) have a sunset provision after 5 years. Does the PO add deficits through years 2015, 2016, 2017, 2018, 2019, 2020? If it does add deficits it needs a 5 year sunset (sunsets in ~2014/2015) if does not it survives this point of order and does NOT need a 5 year sunset (but might need a 10 year sunset, more below). CBO judges and Reid has to design the PO specifically for that purpose which he is aware of:
Senator Reid will work with the White House, the House, and members of his caucus in an effort to craft a public option that can overcome procedural obstacles and secure enough votes."
Now comes the 10 year limit which the maximum budget window, assuming the PO can pass the 5 year sunset requirements (fairly easily, especially with a stronger PO's) it still needs a 10 year sunset right? or does it? :-)
Some texts incoming!: Sunset Provisions and when they come in use
Importantly for sunset provisions, the Byrd Rule also defines as extraneous provisions that "would increase the deficit for a fiscal year beyond those covered by the reconciliation measure." Since the Budget Act states the budget resolution covers at least the four years following the "budget year" which is typically the year following the year in which it adopted, that is the usual period of time. However, budget resolutions have covered periods as long as ten years, so a reconciliation measure may cover the ten years.This rule has the effect of allowing a point of order to be raised against any spending increase or tax cut that does not contain a sunset provision ending it after five or ten years (conceivably longer). (Otherwise, the provision would increase the deficit in a fiscal year after the period covered by the budget resolution.) Overcoming a point of order requires cloture, and thus a three-fifths majority of 60 in the Senate. In short, a net effect of the Byrd Rule is to require that any spending increase or tax cut be approved by a majority of 60 if it does not contain a sunset provision assuring no increase in the deficit after the budget resolution period (though there is an exception if the total effect on the deficit in a particular title is to not increase the deficit, the point of order is not triggered). With the sunset provision, only a simple majority is necessary in the budget reconciliation process.
Ok summary: The bold parts explain the "long term deficit" point of order, basically a senator can say the PO will bust the budget beyond 10 years and strip it!! the way to avoid that big bad point of order is to stick a 10 year sunset in the public option. After all how can it increase deficits beyond 10 years if it wont exist after that!
Or the provision can actually be good policy that BENDS the cost curve and REDUCES deficits beyond 10 years (CBO), like something called the public option! (especially PO+5). How long after 10 years you say? it is 50 years!
Here is a former senior bush senate staffer who regards himself to be big on HC issues. His article is basically discounting the sunset provision (as his commentators tell him) but he lists the years that the "long term" point of order covers so I will quote him:
There is a separate Senate point of order against legislation that increases long-term budget deficits. If CBO says that this bill increases the budget deficit by more than $5 B for any of the following periods: 2020-2029, 2030-2039, 2040-2049, or 2050-2059, then the bill dies unless there are 60 votes to waive this point of order.--Note: he forgets to mention the bill can get around this if it has a 10 year sunset (like bush tax cuts), something his commentators point out to him.
So If I go by CBO's word that PO bends the cost curve beyond its 10 year horizon it would pass this test and WONT need ANY sunset provisions at all! It will probably need a CBO score specifically for those decades listed above, the CBO obviously wont know that far in the future but they can make an educated guess. Like they do when they say the bills bend the cost curve beyond 10 years (they said senate's bill reduces deficits by ~600 billion in between 2020-2029). It can be done.
Besides health bills HAVE been passed through reconciliation and in one instance did NOT contain sunset provisions presumably because they scored well on long term deficits.
I am referring to COBRA, I could not find any reference to sunsets for that bill even though it was created via reconciliation, if anyone finds one I will correct this. Nevertheless this program was created from scratch (meaning it did not exist before) using reconciliation.
Consolidated Omnibus Budget Reconciliation Act of 1985, or COBRA, is a law passed by the U.S. Congress and signed by President Reagan that, among other things, mandates an insurance program giving some employees the ability to continue health insurance coverage after leaving employment. COBRA includes amendments to the Employee Retirement Income Security Act of 1974 (ERISA). The law deals with a great variety of subjects, such as tobacco price supports, railroads, private pension plans, disability insurance, and the postal service , but it is perhaps best known for Title X, which amends the Internal Revenue Code and the Public Health Service Act to deny income tax deductions to employers for contributions to a group health plan unless such plan meets certain continuing coverage requirements. The violation for failing to meet those criteria was subsequently changed to an excise tax
SCHIP(Children health insurance) was also Created using reconciliation:
SCHIP was then passed and signed into law by Bill Clinton on August 5, 1997 as part of the Balanced Budget Act of 1997, to take effect the following month
Hope that clears it out for some of the crowd who are talking about sunsets all the time like it is an automatic thing that cant be avoided. Or how a passing a Health-care bill through Recon. is unprecedented or undo-able (its policy!).
As far as sunsets go, to avoid the 5 year sunset trap I propose pushing the start date of PO from its (assuming) current 2014 to 2010 or 2011. This will have two big immediate benefits:
1- It wont need a 5 year sunset because it will have enough time to go into effect to reduce costs and not add to the deficits by 2014
2- People will have TANGIBLE and HELPFUL resulted sooner. They will get a taste of what their one trillion dollar investment has bought them sooner and it will pay off politically.
I might add other useful info/feedback from commentators later on!
Till than Adios!
Update X 1: The Obama Plan is in: no national exchange, no PO, premium regulations... Bleh.