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What’s so wrong with using reconciliation?

Despite vigorous and occasionally mendacious opposition from congressional Republicans, until recently President Barack Obama’s decentralized and "hands off" approach to health care legislation was working. Democrats had managed to pass health care bills in both the House and the Senate, and all that remained to be done was to reconcile the two bills into one final law.

Unfortunately for Democrats, the election of Massachusetts Republican Scott Brown to the Senate destroyed their "filibuster-proof" supermajority in the Senate. Gleeful Republicans and other Washington pundits opposed to health care reform began to boldly assert that health reform was dead. However, this proved premature not only because this seemingly saturnine state of affairs galvanized the president into direct action but also because there are three ways in which health care legislation could become law in 2010.

The first possibility would be for Democrats to win over some Republicans, but in contemporary Washington this would be like attempting to discover the elixir of life. The second possibility is for House Democrats to pass the Senate’s health care bill, but this too is unlikely. This leaves the third possibility, namely, budget reconciliation.

Budget reconciliation is a procedure created in 1974 as a way of making changes in federal policy to meet fiscal goals set by Congress. This procedure includes a limit of 20 hours of debate, so reconciliation bills in the Senate cannot be blocked by a filibuster and need only a simple majority to pass. This simple but salient fact has made this procedure an attractive one to Senate Democrats looking for a way around the unified Republican opposition to the health care bills passed by the House and the Senate in 2009.

There clearly are some practical difficulties-such as compliance with a rule created by Sen. Robert Byrd-associated with the use of budget reconciliation to pass health care legislation in 2010, but the two most common objections to the use of this procedure have little to do with these difficulties. The first objection, made vehemently by Republicans, is that using budget reconciliation is a "nuclear option" and that using this procedure to pass health care legislation would be equivalent to "jamming" the legislation through the Senate. This objection is without merit. As Sen. Harry Reid has pointed out, since 1981 budget reconciliation has been used 21 times and the vast majority of these reconciliation efforts have been made by Republicans. In particular, the so-called "Contract with America," the Bush tax cuts of 2001, and changes to Medicare all were undertaken with budget reconciliation.

The second objection, made by Republicans and others, is that there is something special and complex about the scope of the health reform being contemplated presently and hence legislation of this magnitude ought not to be passed with a controversial but legal procedure such as reconciliation. This objection too does not withstand careful scrutiny. As professor Sara Rosenbaum of George Washington University has noted, with very limited exceptions, most health care legislation in the last three decades has been undertaken with budget reconciliation. In fact, the 1986 COBRA law, which allows laid-off individuals to keep their health coverage, and the 1997 BBA law that created the Children’s Health Insurance Program were both enacted using budget reconciliation.

Rabbi Hillel once famously asked, "And if not now, when?" Well, the time to pass a meaningful health care bill is now. In the current political climate, the use of budget reconciliation to pass health care legislation is not only a good idea but also the only idea around for those who believe that we must pass comprehensive health care legislation in 2010.

Amitrajeet A. Batabyal is the Arthur J. Gosnell professor of economics at Rochester Institute of Technology; these views are his own.

3/19/10 (c) 2010 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or e-mail rbj@rbj.net.

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