Earlier this week, I was doing some research into the Budget Reconciliation process. One of the process’ most important provisions is that reconciliation bills must be solely budgetary and cannot contain any provisions that enact, repeal, or amend regulatory law. That led me to question how Republicans were able to include provisions repealing the individual and corporate coverage mandates through reconciliation last year and how they believe they are able to get away with putting those same repeal provisions in the AHCA this year. I found the answer to this question, and it is as clever as it is criminal. The AHCA does not repeal the language that establishes the individual and corporate coverage mandates themselves; it simply reduces the fines for failure to comply with those mandates to $0.00. During the Republican’s drawn-out attempts to repeal the ACA last year, the Senate Parliamentarian, Elizabeth McDonough, ruled that such a maneuver passes muster under budget reconciliation rules.
There is a lot of scholarly debate as to whether a budgetary contortion of a regulatory law can render the underlying law budgetary (and hence make it amendable to reconciliation), rather than regulatory. I am a law school student and by no means an expert on Senate parliamentary procedure, but this ruling from the Senate Parliamentarian strikes me as grossly incorrect. It is true that the coverage mandates themselves (as regulations) are not being repealed, but the enforcement portions of those regulations are. Almost all regulations have some budgetary impact. And the direct-budgetary effect limitation on the budget reconciliation process was designed to draw a bright line between laws that are directly budgetary (and are reconcilable) and those that only have an indirect effect on the budget (and are not reconcilable). The individual and corporate insurance mandates definitely fall into the second (non-reconcilable) bucket.
It seems to me that a parliamentarian faced with this question should look at the goal of the overall provision in question — here, the mandate provisions themselves — which are undoubtedly regulatory in nature. Zeroing out the penalties for failure to comply with the coverage mandates constitutes a material change to the underlying regulations. And while zeroing out the penalties has an indirect budgetary effect, MacDonough’s ruling renders the direct budgetary-only requirement of the reconciliation process a meaningless exercise. MacDonough has started Senate procedure down a slippery slope where almost any regulation can be repealed through budget reconciliation because almost all regulations have at least a tangential budgetary impact. In other words, the parliamentarian (herself under tremendous pressure from the Republican Senate majority) decided a not-so-close procedural question in favor of the Republicans when the question, objectively viewed, should clearly have come out the other way.
Here’s hoping that when the Senate Democrats object to the inclusion of the coverage mandate repeals in the reconciliation bill that the parliamentarian comes down with a different (and correct) ruling this time. There is a lot more riding on this bill than there was when Republicans were putting on their dog and pony show last year. Let’s hope the parliamentarian has the guts to make the right call and sustain the Democratic objection to the inclusion of the coverage mandate repeals in the bill.
There is one other provision that, without question, has NO place in the reconciliation bill. The House is planning to amend the AHCA to include a provision that amends the Social Security Act (which houses Medicare and Medicaid) to explicitly allow the U.S. Department of Health and Human Services to grant waivers to individual states to allow states to require Medicaid beneficiaries to have a job to be eligible for Medicaid. This provision has no relationship with the budget — and should therefore be excluded from the reconciliation bill.