Analysis: Splitting up Budget Package Carries Procedural Risks

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Democrats face procedural obstacles in any attempt to break up their clean energy and social safety net expansion bill and pass it in “chunks” — a path suggested by President Joe Biden on Wednesday. 

It’s not such an easy task if party leaders want to maintain the special status afforded the measure under budget reconciliation rules, which enable the majority to get around the Senate’s 60-vote threshold to cut off a legislative filibuster.

Speaker Nancy Pelosi nodded to the problems inherent in what Biden suggested at her weekly press conference Thursday. “Remember this, this is a reconciliation bill,” she said, “so when people say, ‘let’s divide it up,’ they don’t understand the process.”

There are a few pathways to breaking up the existing $2.2 trillion package, with an initial tranche moving first followed up by pieces Biden pledged to come back and push for later. All of them pose complications for Democrats and the White House in one form or another, which will make it difficult for the party leadership to get another shot before the November midterms.

Break new ground, part I

The initial fiscal 2022 budget resolution paving the way for the filibuster-proof bill included “instructions” to about a dozen committees in each chamber to agree on provisions totaling no more than $1.75 trillion in deficit spending. The initial plan was for gross spending and tax breaks worth about $3.5 trillion, with half of it paid for.

Of course that didn’t work out, thanks to Sens. Joe Manchin III, D-W.Va., and Kyrsten Sinema, D-Ariz., so the bill was scaled down closer to $2 trillion overall, with all but roughly $160 billion offset. So in theory, there is substantial room under the existing budget instructions for a separate package. However, in practice it doesn’t quite work that way, according to budget experts who spoke on condition of anonymity to speak candidly.

For one thing, there’s longstanding guidance from the Senate parliamentarian’s office, going back two decades, that says for each budget resolution, there can only be one set of reconciliation bills — one for spending, one for tax revenue, and one for the debt limit. Alternatively there could be a combination bill with two or more of those kinds of provisions, like the current package.

Related to that requirement, if lawmakers intend to carve up a budget’s reconciliation instructions into separate bills, the budget resolution needs to spell that out.

For example, the fiscal 2006 budget resolution specified that lawmakers would produce a bill to cut spending by at least $34.7 billion over five years, and a separate bill to cut taxes by no more than $70 billion during that period. The spending cuts bill became law in February 2006, while the tax cuts were signed in May of that year. Similar instructions were included in late 1990s budget resolutions.

By contrast, the fiscal 2022 resolution assumes just one combined reconciliation bill. Democrats would have to make a convincing argument to Elizabeth MacDonough, the current Senate parliamentarian, to cast aside precedent and allow the existing budget instructions to be used for more than one bill.

Break new ground, part II

A second option would be to revise the fiscal 2022 budget resolution to create a new set of reconciliation instructions, using section 304 of the 1974 Congressional Budget Act. Senate Democrats contemplated that little-used path last year to pass chunks of Biden’s agenda, and briefly considered it during last year’s debt ceiling impasse.

Amending a prior budget resolution in such a fashion would trigger a new set of reconciliation bill options, in which Democrats could specify taxes, spending or both. But there are problems with the section 304 approach as well, which MacDonough laid out in guidance to Senate Democrats last year.

One big hurdle for example is in order to amend a budget resolution, MacDonough opined that Democrats would have to go through the normal Senate Budget Committee markup process. That’s different from an original budget resolution, which can be automatically discharged from committee and brought to the floor after April 1 each year if the panel hasn’t acted yet.

The Senate’s power-sharing rules in the evenly divided chamber stipulate that Democrats could make a motion to discharge the resolution from committee in the event of a tie vote. But Senate Budget Committee Republicans could simply deny Democrats a quorum in committee, forcing them to scrap the markup.

Even if Republicans let them get the budget to the floor, it would still likely mean another all-night “vote-a-rama” round – which in an election year could lead to all manner of politically motivated amendments to put vulnerable senators in a tough spot.

Lawmakers would also have to keep time constraints in mind. Although the parliamentarian’s office hasn’t issued formal guidance, budget experts believe lawmakers probably can’t act on reconciliation instructions beyond the fiscal year for which they were adopted. That means Congress would have until Sept. 30 to pass the second reconciliation bill under an amended budget.

New budget resolution

That timeline would have implications for the fiscal 2023 budget process, which is the third avenue Democrats could take.

Budget experts say if a budget resolution for the upcoming fiscal year is adopted before a reconciliation bill that was written under the current year’s budget becomes law, then the special privileges for the current filibuster-proof bill are invalidated.

Accordingly, pivoting directly to the fiscal 2023 budget resolution in March or April — sometime after Biden’s State of the Union address and new budget is delivered — might be the safer course of action. House Democrats had long planned on a new round of reconciliation this year anyway, including to extend certain provisions that would sunset early in the existing bill in order to save money.

Of course, there’s no guarantee such an approach would win the needed votes from Manchin or Sinema. Nor is it clear that the Senate Democratic caucus as a whole has appetite for two more vote-a-ramas, which would be required, for the budget resolution and reconciliation bill, so close to the midterms with their thinnest-possible majority hanging in the balance.

Bipartisanship?

Finally, Democrats could try to pass what they can in the current reconciliation bill and drop the partisan reconciliation process for the rest — instead seeking deals with Republicans that could win at least 10 Senate votes.

That approach has been suggested for items like the expanded child tax credit that lapsed earlier this year and is a top priority for Biden and Democratic leaders, but hasn’t won Manchin’s support yet. However, Democrats up to this point remain adamant that they can win over Manchin, perhaps by scaling back the credit, rather than seek GOP help.

Jennifer Shutt contributed to this report.