Budget Reconciliation, the Byrd Rule and the Affordable Care Act

We are about to witness the late Senator Robert C. Byrd of West Virginia exerting his posthumous influence over the impending Senate debate to “repeal-and-replace” the Affordable Care Act.  The reason is the rule that bears his name — “the Byrd Rule” – which is about to take center stage once again.

I was a young lawyer at the Senate Budget Committee in the mid-1980s when Senate Committees began to make active use of an arcane part of the Congressional Budget Act known as “Budget Reconciliation.”   Budget Reconciliation allows the Congress — in its annual congressional “Budget Resolution” — to instruct one or more of its committees to report legislation making changes in entitlement programs or tax laws.  The Reconciliation instructions to the committee(s) require that the reported legislation achieve a set amount of spending or revenue changes to programs within the respective committees’ jurisdiction – but leaves all programmatic and legislative details up to the instructed committees.

Now, here is what makes Budget Reconciliation significant:  In the Senate, legislation reported by a committee in response to Budget Reconciliation instructions, is immune from filibuster and is also heavily protected from Floor amendments.

The Filibuster and the Senate’s tradition of unlimited debate:  Under Senate rules and precedents, votes do not occur until all debate on a matter is completed. Consequently, opponents of a measure can block it simply by engaging in extended debate. This is the vaunted Senate filibuster—made famous by Jimmy Stewart’s portrayal in Mr. Smith goes to Washington. A filibuster is nothing more than the continuation of debate to prevent a vote. The only way to stop a filibuster is by shutting down debate with a procedure known as “cloture.”

Here’s the key point: invoking cloture to end a filibuster requires a three-fifths vote—sixty out of one hundred Senators.  In recent years, with increasing partisanship, Senators now presume that controversial legislation will be filibustered by opponents–and that 60 votes will be required to invoke cloture and secure passage.  It is political circumstance, not Senate rules, that have made 60 votes the typical requirement for major legislation.

Budget Reconciliation, however, is a gigantic exception to the 60-vote hurdle.  The Congressional Budget Act limits debate on Budget Reconciliation legislation.  With a limit on debate, the bill cannot be filibustered and there is no need to secure 60 votes to invoke cloture.  Reconciliation legislation can pass with a simple majority of 51 votes (or 50 votes when the Vice President breaks a tie, as Vice President Pence did on the DeVos confirmation vote).

Unlimited Amendments in the Senate.  In addition to the Senate’s tradition of unlimited debate, the other major privilege of Senators is the power of unlimited amendment. In general, Senators can offer any amendment on any subject to any bill. This unlimited right of amendment includes “non-germane” amendments—in other words, amendments that have nothing to do with the bill being debated. This may seem like a wildly inefficient way to legislate, but it has the undeniable virtue of ensuring that minority points of view get public attention in the Senate (unlike the House of Representatives, where the majority party always has the procedural means to severely limit both debate and amendment).

Budget Reconciliation, however, is a major exception to Senators’ typical privilege of unlimited amendment. When the Senate is considering a Budget Reconciliation bill, Senators can only offer “germane” amendments—and “germaneness” is much stricter than mere relevance. Most substantive amendments offered to a Reconciliation bill on the Senate Floor are likely to be ruled non-germane and can only be considered if the restriction is waived by a vote of sixty Senators.  The result is that the committee-reported version of Reconciliation legislation is very difficult to amend.

Budget Reconciliation short-circuits Senate Rules. This brings us back to Senator Byrd. He was a brilliant defender of the Senate’s tradition of unlimited debate and amendment and did not want to see the Reconciliation mechanism become a way for Senate committees to fast-track non-budgetary legislation through the Senate, immune from filibuster and virtually immune from amendment.

In 1985, Senator Byrd was the driving force behind an amendment to the Congressional Budget Act that permits any Senator to raise an objection to any provision(s) in Reconciliation legislation that are “extraneous” to the budgetary purposes of the Reconciliation bill. (Similar objections can be raised against any provision of a Reconciliation conference report following a House-Senate negotiation.)  If the Presiding Officer in the Senate—in actuality, the nonpartisan Parliamentarian—agrees that a provision falls into the Byrd Rule’s definition of “extraneous,” the offending provision is automatically stricken (removed) from the Reconciliation bill.

A complex and arcane set of rules governs what is — and what is not — considered to be “extraneous” and subject to removal from a Reconciliation bill.  Once a provision is ruled by the Parliamentarian to be “extraneous,” any attempt to keep the offending provision(s) in the Reconciliation Bill by waiving the Byrd Rule, or by overturning the decision of the Parliamentarian, requires 60 votes – an almost insurmountable hurdle in a closely divided Senate.

In January of this year, Congress adopted a Budget Resolution that set the stage for Budget Reconciliation legislation to repeal-and-replace the Affordable Care Act. Congressional leaders are using Budget Reconciliation procedures in order to make the repeal-and-replace legislation immune from filibuster.  The Senate’s Byrd Rule, and the limitations it places on Reconciliation legislation, will be pivotal in determining both the content and outcome of the legislation.