Wednesday, March 10, 2010

Republican Deficits and Budget Reconciliation

By Robert Hockett

Now that it's virtually certain that comprehensive health insurance reform will be pursued at least in part through House-Senate budget reconciliation, the present affords an opportune moment to take stock of past resorts to that procedure.  Happily, this past Sunday's NYT provides a helpful survey of the contents and fiscal magnitudes of  all major reconciliation bills passed by Congress since the procedure's first use in 1980.  All who take interest in the details will find the full article commesurately interesting.  Here I shall simply draw out a few particularly intriguing highlights. 

Of the 15 major reconciliation bills passed from 1981 to the present, 10 were passed when Republicans held at least two of the three active organs of federal government -- Senate, House, and White House.  (I'll buy-in for present purposes to the traditional mythology pursuant to which the Supreme Court is characterized as 'passive.')  The remaining 5 were passed when it was the Democrats who held at least two of the three active organs.  So on the question of who makes most use of the procedure, it looks like the Republicans have it by a ratio of 2 to 1.  Highlight number one.     

Next, some DoL readers might be interested in the party-composition of the federal government, and especially of the Congress, on these past occasions of resort to reconciliation.  At least this might be so insofar as resort to the procedure when different parties hold different organs of government could strike some as more endangering of 'minority rights' than resort to the procedure when one party holds all three organs, or at least both chambers of Congress.  (I employ scare-quotes here simply because we're not talking about 'fundamental human rights,' after all, but putative rights of legislative minorities to obstruct even contitutionally permissible legislation by majorities -- even very large ones, like, say, 59-41.)  Here, then, are a few highlights on that score: 

Three of the Republicans' 10 reconciliation bills were passed when the GOP controlled all three active  organs of federal government, and one of the 10 was passed when they held, so to speak, a bit more than '2.5' of them: that would be the 2001 tax cut legislation, more on which presently, which passed when the Senate was evenly divided and accordingly subject, in theory at least, to tie-breaking by the Vice President.  (As it happens, the measure passed by 58 to 33 vote; but tie-breaking was required to pass its 2003 follow-up, also more on which presently.)  The remaining 6 -- hence, 3/5 of total -- Republican uses of reconciliation occurred while the three active organs of federal government were divided between the parties -- in all but one of them, with the Republicans holding one chamber of Congress and the White House, while the Democrats held the other chamber of Congress.  (I'll get to the counterpart Democrat stats below.) 

As for Democratic resorts to reconciliation, well, since the Republicans account for 10 of the 15 uses, it is of course trivially true, under our (for the time being, anyway) de facto system of two party rule, that the Democrats account for the remaining 5.  Of those five reconciliation bills passed while Democrats held at least two of the three active organs of the federal government, two were when they held all three such organs, the other three -- hence, as in the case of the Republicans, 3/5 of the total -- when they held both chambers of Congress but not the presidency.  There might, then, in this connection, be some room for argument that the Democrats' (half as many) resorts to reconciliation were more majoritarian than were the (twice as many) Republican resorts, given the nay-saying power wielded by a veto-holding president; but I won't attempt to hang any hats on this interesting prospect at present.

On to highlight number three:  At least as interesting as the two parties' comparative proportions of total resorts to reconciliation (again, that 2 to 1 ratio in favor of Republicans), I think, is what they have used reconciliation for.  Consider first the matter of budgetary impact, a subject of considerable media hype these days:  Of all 15 uses of reconciliation, 3 have raised federal budget deficits, and all 3 were Republican uses.  (Hence, again trivially but nevertheless significantly, 30% of Republcan resorts to reconciliation have been deficit-raising.)  Two of these, moreover, each raised the federal deficit by much more than any other reconciliation acts save one -- one passed by Democrats -- have managed to lower it.

Largest among these Republican deficit-raising reconciliation acts was the 'Economic Growth and Tax Relief Reconciliation Act' of 2001.  The effect of this legislation was to increase the federal deficit by over half a trillion dollars -- specifically, $552 billion -- over five years. 

The second-largest deficit-growing impact came two years later with the Republicans' 'Jobs and Growth Tax Relief Reconciliation Act' of 2003, which increased the federal deficit by more than another third of a trillion -- specifically, $342.9 billion -- over five years.  This one, moreover, required a tie-breaking vote in the Senate by Vice President Cheney -- of 'Reagan showed that deficits don't matter' fame -- to pass. 

Finally, case three -- the Republicans' 'Tax Increase Prevention and Reconciliation Act' of 2005, which passed by a 54-44 vote in the Senate -- added another $70 billion to the federal deficit over 4 years.

All 5 Democratic resorts to reconciliation, by contrast to the Republican case, brought substantial decreases to the federal deficit.  Of these, by far the largest was the 'Omnibus Budget Reconciliation Act' of 1993, which lowered the federal deficit by more than 2/5 of a trillion -- specifically, $433 billion -- over five years and ultimately passed, against stiff Republican opposition, by a vote of 51-50.  (Yep, that means Al Gore can take credit for the largest reconciliation-wrought cut to the federal deficit rather as Dick Cheney can take credit for the second-largest reconciliation-wrought growth in the federal deficit.)

The Democrats also take the prize for the second-largest reconciliation-wrought cut to the federal deficit.  That would be the 'Omnibus Budget Reconiciliation Act' of 1990, which trimmed $236 billion from the deficit over 5 years -- although in this case it bears noting that there was substantial moderate Republican support (remember moderate Republicans?) as well, including from then-President G. H. W. Bush, who was punished by his 'base' at the voting booths shortly thereafter. 

All remaining uses of reconciliation, be they by Republicans or Democrats, involved smaller decreases to the federal deficit -- generally around $130 billion (Republicans in 1981 and 1982, Democrats in 1997) or less, usually much less.

A final point worth considering in respect of the contents of past reconciliation acts has to do with how 'purely fiscal' as distinguished from 'social-policy-oriented' they have been.  This distinction is implicated, of course, any time somebody darkly hints or vaguely suggests that it is in some sense illicit to employ reconciliation as a means of passing social policy over the objections of recalcitrant minorities in the Senate.  Against this backdrop, what is perhaps most striking is how sweeping, in social policy terms and indeed even express aims, virtually all resorts to reconciliation since 1981 have been.  Nary a one seems to have neglected to make significant changes to AFDC, Medicare, Medicaid, CHIPs, and/or other social welfare and social insurance programs.  And that is to say nothing of the overt social policy objectives typically sought through all major tax overhaul legislation. 

What, then, to make of all this?  Well, perhaps I am missing something, but against the backdrop just rehearsed, it is hard to see what would be so importantly different -- let alone 'illegitimate' or problematically 'minority-trampling' -- about using reconciliation to handle what ever small gaps remain between the House and Senate health insurance reform bills passed this past autumn and winter, respectively, by supermajorities.  The subject programs, for one thing, look to be of the same sort as have been past such programs in all earlier reconciliation bills -- health insurance, after all, constituting one of the three classic forms of social insurance afforded in all polities with advanced economies (even our own, by and large!) since the time of Bismarck.  The Democrats, for another thing, control both the White House and both chambers of Congress with huge majorities.  And, finally, perhaps best of all in light of current business media chatter, the legislation now contemplated would constitute yet another case in which the Democrats maintain their track record of resorting to reconciliation not only just about twice as rarely as Republicans, but also only to lower, rather than as in the Republican case to raise, federal deficits. 

(Not that there's anything wrong with that -- i.e., with well spent deficit moneys -- as Neil has forcefully shown in previous posts!)