However, there has been what I believe to be a misunderstanding among many who claim that a public option - a health insurance option run by the federal government to compete with the private insurers on the exchanges that the current health care proposal sets up - can also be passed with a simple majority vote via the budget reconciliation process. After all, SCHIP and COBRA were major changes to our health insurance system, and those were pushed through by reconciliation, right?
Here's how it breaks down. Budget reconciliation has to jump through the hoops of something called the Byrd rule in the Senate. The Byrd rule prohibits from consideration anything that does not either score against the budget or scores against the budget only as an incident of the non-budgetary parts of the provision under consideration. This second part is where the public option is likely to be ruled out of bounds. While the public option would have budgetary impact (positive budgetary impact that is, saving the federal government money), that impact is merely incidental to the policy of setting up a brand new federal program and setting up a part of the government to run a health insurance program. It just does not have a very good chance of fitting into reconciliation on its face.
Well what about SCHIP and COBRA, then? They set up brand new federal programs under reconciliation, right? Right? Wrong. That is not at all how SCHIP and COBRA were structured. Let's take them one by one.
SCHIP was passed as part of the Balanced Budget Act of 1997. It derived statutory authority from a well known existing law: the Social Security Act. Specifically, title XXI of the Social Security Act. There's no separate law titled the "State Children's Health Insurance Program." It is, in fact, title XXI of the current Social Security Act. SCHIP was also not designed as a brand new federal program, or, for that matter, add new people to any federal programs. It was designed as block grants from the federal government to the states. In fact, the New York Times published a report during the debates about it in 1997 making that very, very clear:
The legislation does not provide a formal entitlement, with as many individuals as qualify guaranteed benefits like those of Medicare, Medicaid or Social Security. Instead, it offers a specific sum of money in the form of block grants that states can apply for or not.It turns out states like the money, and they do apply for the grants. What we call SCHIP was a pure spending matter, as far as the budget was concerned. It didn't set up any new programs; it didn't enroll anyone new into existing programs; it simply set up a grant program and Congress defined the terms of the grant. That was it.
Also, here's another thing to note. The Byrd rule is not self-enforcing.
The Byrd rule is not self-enforcing. A point of order must be raised at the appropriate time to enforce it. The Byrd rule can only be waived by a 3/5 (60) majority vote of the Senate.You see, the Balanced Budget Act of 1997, which is what SCHIP was included in, passed through the Senate by unanimous consent in initial form on June 25, 1997, and the conference report with the House was passed in the Senate by an overwhelming vote of 85-15. Given its initial passage by unanimous consent, it is clear that no Senator raised an objection to the inclusion of SCHIP. Even if someone did, and the point of order had been sustained by the Chair (relying on the parliamentarian), the final vote of 85-15 smacks us of the reality that the votes to waive the Byrd rule existed, easily. That is not the case for the public option. You can be more than sure than Republicans and Joe Lieberman would raise objections, and 60 votes to waive the Byrd rule do not exist in the current Senate on this.
COBRA is famous. Because if you lose your job, you can keep your health insurance through COBRA. But what a lot of people don't know is that COBRA stands for Consolidated Omnibus Budget Reconciliation Act of 1985. What, reconciliation? See I told you new benefits could be established through Budget reconciliation! Boo-yeah!
Not so fast. COBRA, in 1985 amended ERISA from 1974. As originally passed, it was purely budgetary tax policy in that it ended a tax exemption from employers unless the plans were allowed to be carried over after employees lose their job.
As originally enacted, Title X of the Act provided that a qualifying employer will not be permitted to take a tax deduction for its health insurance costs unless its health insurance plan allows employees of the employer and the employee's immediate family members who had been covered by a health care plan to maintain their coverage if a "qualifying event" causes them to lose coverage.Tax policy is, of course, the perfect candidate for budget reconciliation. The way the federal government earns revenue (income or inlays) is taxes. Yup, perfectly budgetary, perfectly narrow, fits perfectly under reconciliation.
And how did the votes on COBRA go? In the Senate, its first version was passed by a vote of 93-6. The Senate approved the conference report by a vote of 78-1, and subsequently, agreed to the amendments of the House by a voice vote. Once again, from the numbers, it's clear that no one actually invoked the Byrd rule, and if a Senator did, enough votes existed to waive it even if the point of order was sustained. That, once again, is not the case for the public option.
So what happens when such an objection is raised in the current case of the public option (if it's offered on the Senate floor under reconciliation)? If I am right, and I think I am, and if the parliamentarian of the Senate says that the public option is out of bounds in reconciliation when a Republican or Conserva-Dem inevitably invokes the Byrd rule, one of the following will have to happen for it to pass:
It will need 60 votes to waive the Byrd rule and pass it through anyway, which we do not have.
In the second scenario, Vice President Biden, as the President of the Senate, ignores the advice of the parliamentarian and rules it allowable under reconciliation. Then a Republican would challenge that ruling, and we would need 50 votes to sustain the ruling. Now you will have an different situation altogether - 50 Democrats voting not for the public option but to essentially overrule the Senate parliamentarian. 60 votes to pass it through. That will never happen, and if it did, it will give Republicans their very first legitimate line of attack on health care: that the Democrats are playing hard and fast with the rules when the rules turn out to be problematic for them.
I am for the use of the Constitutional option where the Vice President uses his Constitutional power as the President of the Senate to strike as unconstitutional the filibuster altogether, but that is a very different matter than reconciliation (except to the extent that one can argue reconciliation will not be required for anything if the Senate were able to govern my simple majority rule), and as long as the rule remains in place, the parliamentarian ought to be able to call balls and strikes regardless of whom or what such rulings favor.
Well, what about a Medicare expansion? Does that fit in under reconciliation? It's certainly a better candidate than a brand new program. But once again, its changes in incomes and outlays are a mere result of the non-budgetary provision: i.e. inclusion of additional people in the program. So I am not too sure about that one, but I don't think it will fly, either.