Challenges of the two bill strategy

Speaker Pelosi, Leader Reid, and their Administration allies face seven challenges in implementing the two bill strategy:

Yes/no political question
Yes/no reconciliation question
Sequencing
Money
Procedural
Substance & vote counting, especially in the House
Timing

I have a companion post which describes the mechanics of the two bill strategy. Warning: the mechanics post is intended as a technical reference and gets into more detail than you may want.

Last August I posted a primer on reconciliation which may be helpful.

1. Yes/no political question

Irrespective of the bills’ substantive details, can Speaker Pelosi and Leader Reid convince each of 217 House Democrats and 50 Senate Democrats that it is in their crass political self-interest to vote aye (multiple times) and have a major health bill become law?

Most Democrats are from safe districts so this isn’t an issue. But there are some House Democrats who voted aye for House passage and are nervous about voting aye a second time.

Argument: You already voted aye. Your opponent this November can already run an ad against you for that vote. There is therefore no political cost to you voting aye a second time.

Response: If you vote aye a second time, the bills will become law. You are then committed to defending these laws and your votes for them through the remainder of this year (and thereafter). If you change your vote to no, the bill will not become law and you give yourself a response to that negative ad. Your message changes to “I changed my mind, and here’s why I opposed the bills.”

The crass and self-interested political question is not “Do I do additional damage by voting aye a second time?” It is “Given that my opponent will attack me for voting aye last October, am I better off (A) voting aye, having it become law, and defending it, or (B) voting no, having it not become law, and explaining why I changed my vote?”

Let’s use an extreme example to illustrate this tradeoff. Suppose you cared only about getting re-elected. Suppose you knew today that on Election Day a new comprehensive health care law would be intensely unpopular with 95% of your constituents. Clearly you would be politically better off to change your vote and explain why you did. You would still take heat for voting aye last October, but that’s true in either case. And some fraction of those 95% of your constituents would give you credit for voting no the second time and helping kill the bill. Even if all of the other 5% took retribution against you for flip-flopping, the severe imbalance in the numbers makes it politically advantageous to change your vote.

This is an extreme example, and I am not arguing it makes sense for all these nervous House Democrats to switch. I am instead making the less contentious claims that (i) there is a potential political benefit to switching from an aye to a no, and (ii) this political benefit gets bigger the less popular is a new health care law in fall of 2010.

A new law may make the anger and opposition go away. If so, the arguments for sticking with your aye vote are valid. But if you think opposition will continue to climb and intensify after a new bill is signed into law, then it may be in your narrow political interest to switch from aye to no.

Nervous House Democrats from purple districts know this, presenting a significant challenge for Speaker Pelosi.

2. Yes/no reconciliation question

Do Speaker Pelosi and Leader Reid lose any votes if they use reconciliation to pass Bill #2?

I think this is the smallest challenge of all those I list. I think the proposed process is an abuse of the intent and spirit of reconciliation. Even when made aggressively by Congressional Republicans, that argument so far does not appear to be dissuading Congressional Democrats from pursuing this path.

Still, if only two or three House Democrats who previously voted aye decide they cannot take the political heat associated with what is being labeled as a “nuclear option,” they could jeopardize the entire strategy. The vote-counting margins are so thin, especially in the House, that this procedural debate could still matter.

It also feels like this issue is still ripening. It appears the Blair House Debate and the President’s upcoming remarks this week are in part designed to provide those nervous Congressional Democrats with air cover for the process aspects of some tough votes.

It doesn’t really matter what the viewers of Fox News or MSNBC, or the editors of the New York Times or Wall Street Journal think on this point, except to the extent they influence the behavior of those swing votes in the House.

3. Sequencing

The core challenge here is to sequence three votes:

House passage of the Senate-passed bill (which I call Bill #1);
House passage of the new reconciliation bill (Bill #2);
Senate passage of Bill #2.

(I’m glossing over working out differences between the House-passed and Senate-passed versions of Bill #2. For this purpose that’s a detail.)

Each leader wants (needs?) the other body to go first:

Some Democratic Senators will want to vote for a new reconciliation bill only if they are certain that it will lead to a new law. They therefore want the House to pass Bill #2 before the Senate does, so that if Speaker Pelosi can’t get the votes for Bill #2, the Senate Democrats don’t have to vote and don’t have to take any risk.
Some Democratic House members feel the same way about the Senate, and won’t want to vote aye for Bill #2 in case the Senate might not pass it. I would imagine more nervous House Democrats from purple districts might fit into this group. Many of these Members already feel burned from when they cast a politically damaging vote for a cap-and-trade bill that died in the Senate.
I expect some House Democrats will insist the Senate pass the reconciliation bill (#2) before the House passes Bill #1. They fear that, if the House passes Bill #1 unchanged and the President signs it into law, the Senate has little incentive to take any additional political risk and Bill #2 will die in the Senate. Interestingly, I can imagine both some House liberals and some more moderate House Democrats (especially the pro-life ones) falling into this group.

These dynamics definitely exist at the Member level. They may also exist at the Leader level. I wrote about the possible blame-shifting exit strategy dynamics among Team Obama, Speaker Pelosi and Leader Reid last week.

Lesson #1 in how a bill really becomes a law: The House and Senate are two separate legislative bodies that occasionally work out their differences.

Corollary: Never underestimate the potential for friction and distrust between the House and Senate, even (especially?) between Members of the same party. Former Republican House Majority Leader Dick Armey once said, “The Democrats are the opponents. The Senate is the enemy.” This sentiment exists in both parties and both bodies.

Illustrating this, here is a POLITICO article from Friday:

Still, Pelosi and Senate Majority Leader Harry Reid have been in a staring contest of sorts about who should move first on a revised health care bill. To that end, the speaker and her no. 2 prodded the Senate Friday to move forward with reconciliation.

That’s in part a sign of the distrust that has crept in between Democrats in the two chambers, with some House Democrats angry that the more moderate Senate caucus hasn’t been able to pass a liberal version of reform.

… “Yesterday took us further down the path,” Pelosi said of Thursdays summit. “Now, we’ll put something together. Harry – will see what he can get the votes for, and then we’ll go from there.”

Update: After further discussions it looks like the Speaker and Leader Reid may not have much flexibility to choose a sequence. The money problem I describe below in #4 appears unsolvable. If so, that means Bill #1 will have to pass the House (but not necessarily be signed into law) before the Senate can consider Bill #2. In addition, while there is technically a choice in which body goes first on Bill #2, I would bet heavily on the House going first. If the Senate goes first then two Senate committees need to mark up Bill #2 (Finance & HELP). That’s a nightmare.

So I predict that the likely sequence is:

House passes Bill #1, the Senate-passed bill.
The House initiates and passes Bill #2, the reconciliation bill.
The Senate passes Bill #2, the reconciliation bill.
The President signs Bill #1.
The President signs Bill #2.

4. Money (& sequencing again)

The Congress is still operating under the quantitative limits established by last year’s budget resolution. This will continue to be true even though Congress is now working on this year’s budget resolution. The old limits apply until a conference report on the new budget resolution is passed by the House and Senate. That would rarely happen before the mid-April statutory deadline for the budget resolution, and it’s a safe bet that Speaker Pelosi and Leader Reid will delay it as needed to avoid further complicating their health care efforts.

Still, Bill #2 must comply with the limits in last year’s budget resolution. Since the House Rules Committee can waive budget rules with a simple majority, this is probably a bigger practical challenge in the Senate, where waiving those same rules requires 60 votes (and therefore the cooperation of a Senate Republican).

There is also a vote counting dynamic that goes beyond the formal procedural limits. The President and Democratic Leaders worked hard to get CBO to say their bills reduce the budget deficit over ten years, and also over the long run. I think those claims are misleading because of factors ignored in the CBO analysis, but my view is beside the point.

The tension here is that the leaders will want to spend taxpayer money in Bill #2 to include popular provisions that engender political support from wavering Democrats. (A cynic would call this “buying votes with taxpayer money.”) Since Bill #2 is a reconciliation bill, it must reduce the budget deficit over ten years and must not increase it in the long run (I’m oversimplifying).

There is an additional and potentially fatal challenge introduced by the two bill strategy. Senate Finance Committee Chairman Baucus said it well but I’ll bracketed language to further clarify it:

blockquote>The general rule is, if there is reconciliation, you have to amend something that is passed

[and signed into law]. You can’t amend nothing.

Let’s look at an example from my way-too-detailed post Mechanics of the two bill strategy.

Example

The Cornhusker Kickback is a provision in Bill #1 that increases federal spending on Medicaid for Nebraska. If this bill and provision were signed into law, and then Bill #2 contained a provision to repeal it, Bill #2 would reduce federal spending. CBO would score this as savings, which could then be spent within Bill #2 on sweeter benefits for someone without Bill #2 resulting in a net deficit increase.
But if Bill #1 is not yet law, then repealing a non-existent provision of law doesn’t save any money, and they won’t get scored with any savings. This means they cannot offset their other spending, and their Bill #2 will increase the deficit.

This is a huge problem. if the strategy is to hold Bill #1 until Bill #2 has passed the Senate. There may be a procedural way to work around this problem, but I don’t know it. If there is not a way around it, they may be forced to enact Bill #1 into law before the Senate passes Bill #2.

You can see how the money, procedure, and sequencing all interact to cause a potential nightmare for the Speaker and Leader Reid:

While there is tension about which House should pass the reconciliation bill (#2) first, it seems like an easy strategic call to save the House vote on Bill #1 until last.
If they cannot find a way around this scoring problem, then when the Senate considers Bill #2 it cannot get any scoring credit for deficit-reducing amendments it makes to Bill #1.
This makes it harder to spend money in Bill #2 to build support for it in both the House and Senate.
There may be other complications with trying to amend a law that does not yet exist. I’m still exploring this. In the extreme, it may mean that Bill #1 has to become law for Bill #2 to avoid 60-vote points of order in the Senate.
The conventional wisdom is that there’s no way Speaker Pelosi can pass Bill #1 unless her members are certain Bill #2 will become law. So far this has meant that Bill #1 has to wait for Bill #2.
Potential catch-22: Bill #1 must become law first for Bill #2 to survive the Senate, but House Democrats will not pass Bill #1 and send it to the President until the Senate passes Bill #2.

Press reports and my sources suggest Democrats are hard at work on this problem. I will surmise that there may be tricky procedural ways to work around it. If so, those solutions would strengthen Republican process abuse arguments, but to Democrats those have to look trivial compared to this potential problem.

I don’t understand this problem as well as I should, and procedural discussions are ongoing. I will update this section as I learn more.

Update: Further conversations convince me there is no way around this. The House will have to pass Bill #1 (the Senate-passed bill) before the Senate can consider Bill #2 (the reconciliation bill). Technically, the President doesn’t have to sign Bill #1 into law before the Senate can consider Bill #2, but that’s a minor point. I am updating my mechanics post to reflect this.

5. Procedural

I have described two procedural challenges resulting from reconciliation:

Bill #2 must reduce the budget deficit over ten years and in the long run, as scored by CBO. (There are more particulars which I will gloss over.)
Bill #2 can’t be scored right if it amends a non-existent law. This is an effect of an unusual two bill strategy.

The other two big procedural challenges are the Senate’s Byrd rule and the vote-a-rama.

The Senate’s Byrd rule

Oversimplifying, the Byrd rule precludes you from including provisions in Bill #2 (which is a reconciliation bill) that don’t affect spending or taxes. An exception is made for a provision that does not affect spending or taxes by itself but is a necessary term or condition of a provision that does.

You can ignore this limitation if you have 60 votes to waive the Byrd rule. Leader Reid will not have 60 votes to waive anything.

I have not discussed the details with experts, but I imagine this is a big challenge for the Stupak abortion provision. That debate centers around limitations the federal government would place on health insurance plans sold through new State-based exchanges, including plans that are not directly subsidized with federal dollars.

The first order test for the Byrd rule has two parts and is simple:

If we remove this provision from the bill, does the bill’s score change? Does federal spending or revenues change?
If we remove this provision from the bill, is there another provision that affects spending or revenues that will no longer work?

I don’t know what the discussions are with the Senate parliamentarian, but based on my experience it would seem the Stupak amendment would fail both tests. As with all Byrd rule tests, this procedural judgment is independent of anyone’s policy views. Whether the provision is good or bad policy is irrelevant to the procedural test. It does not matter whether the state exchanges would work well or as Mr. Stupak would like. They would still function without his amendment, and so it’s difficult to argue that his language is a necessary term or condition of the exchanges.

This makes me think that one of the primary challenges for Speaker Pelosi and Leader Reid looks like this:

Speaker Pelosi needs Mr. Stupak and his allies to vote for Bill #2 in the House.
To get these votes, she needs to include his amendment (or maybe some variant thereof depending on their negotiations).
Setting aside the separable problem of whether including his language causes other House members to vote no, let’s assume the Stupak language violates the Byrd rule.
Even if the House includes his language and passes the bill, that language is subject to a 60-vote test in the Senate.
I assume that 41 Republicans would vote against waiving the Byrd rule on the Stupak language. They would do this even though almost all of them are pro-life.
The Stupak amendment would automatically be removed from the bill. Ironically this probably makes it easier for Leader Reid to get 50 more liberal Democrats to vote for final passage.
But Bill #2 has now been changed and must again be passed by the House. How does the Speaker now get Mr. Stupak and his allies to support the bill without his language?

If my view on how the Byrd rule applies to the Stupak language is correct, then this is the most important but not the only Byrd rule consequence of a possible Bill #2. The President’s proposed new federal authority to regulate health insurance premiums might also violate the Byrd rule. I’m sure there are others.

In each case, the practical problem is more than just the loss of the policy. It’s the votes the leaders lose from Members who demand that policy change for their aye votes.

As a cultural observation, few things exacerbate institutional House-Senate tension like the Byrd rule. House leaders, Members, and staff often (justifiably) lose their cool when this Senate rule places practical limits on their ability to pass legislation in the House.

A wild card challenge to Democratic Leaders would be if Senator Byrd were healthy enough to weigh in publicly on whether reconciliation should be used for this whole strategy. A single Democratic Senator could not block the strategy’s implementation any more than could a single Republican, but the psychological effect on the Senate majority of hypothetical Byrd opposition would be devastating. Such opposition would be consistent with Senator Byrd’s longstanding views on the appropriate use of reconciliation.

For more background on reconciliation, see my post from last August: What is reconciliation?

The Senate’s vote-a-rama

I have few legacies in Washington, but one is that I coined the term vote-a-rama as a young Senate Budget Committee staffer in 1995.

Senate floor debate on a reconciliation bill is limited to 20 hours. There is no limit on amendments that can be offered. This means that, after two full days of debate and amendments, twenty hours will have expired. Any amendments which are queued up (or are then offered) are then voted on, in sequence, with no debate (in theory). In practice the Senators will often agree to precede each vote with 30 seconds of debate from the proponent and 30 seconds from an opponent.

For a normal reconciliation bill, there are anywhere from 15 to 60 amendments stacked up. Assume 15 minutes per vote when the Senate is working at top speed. The Senate spends many hours in a seemingly endless series of stacked votes. This is called the vote-a-rama.

The Senate floor is usually mostly empty. When things are really busy there might be eight or ten Senators and twice that many staff on the floor.

During the vote-a-rama you have 100 Senators and about the same number of staff on the Senate floor or in the cloakrooms for anywhere from four to fifteen or more consecutive hours.

A well-disciplined Senate majority party can defeat every amendment with a simple majority by simply voting to table (kill) each amendment. This has a slightly different procedural and political feel than defeating the amendment but the same practical effect. Still, the minority can often use the vote-a-rama to force members of the majority party to take politically tough votes. I would expect vulnerable Senate Democrats to be looking to vote with Republicans on some of these votes to avoid political risks for their campaign. This should not be too big of a challenge for Leader Reid, since he needs to hold only 50 of 59 for each tabling vote. He can allow vulnerable individual Democrats to take a walk on particularly difficult amendments.

The novel twist this time would be the possibility of a Senate Republican filibuster by amendment during the vote-a-rama. Even a single Republican could, in theory, offer an infinite sequence of amendments to each word of the bill, never allowing Leader Reid to get to final passage.

This has never happened. Even in times of extreme partisan stress over highly contentious reconciliation bills, the minority has forced a handful or two of tough votes and then allowed the reconciliation bill to move to final passage. But in sixteen years I have never seen the reconciliation process placed under as much stress as is suggested by this strategy.

This provokes two questions to which I do not know the answer:

If Senate Republicans continue to press their argument that use of reconciliation is abusive in this case, will they avail themselves of this tool?
Does Leader Reid have a procedural option to shut it down? I will guess his staff are exploring options for a ruling by the chair to shut down such a sequence if the Chair (controlled by Reid) determines the extended sequence of amendments is dilatory.

This is another area where I know only the questions.

6. Substance & vote counting

Suppose there are 217 House Democrats and 50 Senate Democrats who are willing to vote for health care reform as a political matter and to use reconciliation as a procedural matter. You still need them all to agree to the same substance and legislative text.

The primary challenge to Democratic success on the two bill strategy is getting 217 House votes for both bills. Leader Reid’s job of holding 50 votes for one bill is very difficult, but not as difficult as Speaker Pelosi’s job of rounding up 217 votes for two bills. Reid needs 50 of the 59 who voted for the Senate-passed bill. Pelosi needs 217 votes. 220 voted aye in October, but two of them are no longer in the House and Republican Rep. Cao now says he’s a no. She is playing with zero margin, or maybe less than that.

House Republican Whip Eric Cantor released a memo that describes Speaker Pelosi’s challenge in getting to 217. The key difficulty to predicting what will happen is that we don’t know how close Cantor’s memo is to the Speaker’s reality. If you pay attention to only one thing in the near future, watch what these various swing vote House Democrats say about whether they will support or oppose a reconciliation bill.

This is interesting because it’s the reverse of last fall’s legislative process. When they were operating under regular order and Leader Reid needed 60 of 60 Senate Democrats to shut down a filibuster, he had the more challenging job. (Pelosi’s job was not simple then by any measure.) This relative difficulty last fall gave the Senate [Democrats] leverage over the House [Democrats] on substance and process. This is a fundamental rule of House-Senate negotiations: if one body has only one option that can pass, that body wins in negotiations with the other. Vote counting weakness becomes negotiating leverage.

Now the vote counting weakness and therefore the negotiating leverage is reversed. In House-Senate negotiations Speaker Pelosi and the House have the upper hand over Leader Reid and the Senate for all issues on which she can legitimately claim that the issue matters for getting a particular Member’s vote. If losing a substantive issue means Leader Reid loses one of his 59 votes on Bill #2, he still has eight more to go before he jeopardizes final passage.

This is why everyone is so focused on Mr. Stupak and his allies. It also means each House Democrat suddenly has tremendous leverage over the House leaders and the President. I don’t know that many of them will be bold/stupid enough to use that leverage, but the next Cornhusker Kickback is far more likely to be for a Democratic House Member than a Democratic Senator.

7. Timing

Recent chatter is about an Easter recess deadline. That would leave the leaders four weeks to overcome all of these challenges.

Congressional recesses are useful forcing mechanisms but I won’t treat this as an absolute even if the President sets it this week. Health care legislative deadline credibility evaporated last year.

More important is how the passage of time affects general enthusiasm within the House and Senate Democratic caucus. Today it seems like they are gung ho, energized by the Blair House debate (I struggle to understand why). Will the popularity of these bills continue to slide as time passes, and, if so, how much harder will that make Speaker Pelosi’s effort to corral the votes she needs?

I have been arguing for a while that time is not the President’s friend on this legislation, and that last fall he should have pushed Congress to move much faster. While I think events have proven this argument correct, I underestimated the President’s and his allies’ willingness to press forward despite large and increasing opposition. I mistakenly thought they would have given up long ago.

(Photo credits: Hurdles by iowa_spirit_walker)