This is evidently how the Build Back Better agenda ends--not with a bang, but with a whimper. Not content to wait around for Senator Joe Manchin to reveal what's behind door number two (hint: undetermined Federal Reserve action, a new CPI print, and, at best, 11th hour wrangling in both chambers for a bill that would still need to be drafted, scored, and vetted), Democrats appear poised to move ahead with a skinny reconciliation bill that tackles only drug pricing reform and a two year extension of ACA premium subsidies. It remains unclear exactly how and when that effort will proceed: the legislative language is still being evaluated by the parliamentarian, the Senate is facing a logjam of priorities, and the Democratic caucus in particular has been plagued by attendance issues thanks to serial COVID cases as well as ongoing health challenges for Senate President Pro Tempore Patrick Leahy (D-VT.)
If they are able to marshal the necessary bodies to pass the package this work period, they do not yet seem to have a firm agreement to defend the product from GOP amendments during the requisite "vote-a-rama," a wrinkle that could still complicate their best laid plans. And if they do get it done without eating into the Senate recess scheduled to begin the second week in August, the House will likely have to forfeit their own vacation to preempt a special election that will trim its narrow margin for error to just three votes.
Even the chamber's biggest climate hawks are resigned to moving forward and fighting for clean energy policy another day. Some have begun floating *another* reconciliation bill that would focus on climate, an unprecedented third attempt at the party-line budget process in a single congress. And Manchin, his allies, and his surrogates, for their part, continue to signal his commitment to keep talking.
So beyond creating a rhetorical permission structure to take bird in hand without appearing to abandon their top priority, what are the options for such an effort?
Here we take a look at the potential approaches, the technical range of motion for each, and their practical perils.
Q: If Democrats pass a "skinny" bill focused on drug pricing reforms and temporary ACA premium support, can they pass another bill using the current reconciliation instructions?
A: No. Because it includes both revenues (drug pricing-related excise tax) and spending (ACA subsidies), passage of the bill under consideration would preclude further legislation under the FY22 budget resolution. Reconciliation rules allow for one of each of such bills (and an additional one related to the debt limit,) but in practice, Congress usually combines them into one, as they are poised to do here.
Q: Could Democrats amend the existing FY22 budget resolution in an effort to try again?
A: Yes, but this is highly unlikely for a number of reasons. While this idea of multiple bills was highly touted by Senate Majority Leader Chuck Schumer in the early days of 2021, the reality of the parliamentarian's ruling was more complicated. In a four-page opinion last June, Senate Parliamentarian Elizabeth MacDonough admonished lawmakers that such revisions were intended to be reserved for “extraordinary circumstances and not for things that should have been or could have been foreseen and handled” in a regular budget resolution. She further indicated that a revision would not automatically be discharged from the Senate committee process, a potential problem in a 50-50 chamber. And if a Democratic amendment were to clear these hurdles, it would still require the same cumbersome vote-a-rama process as a fresh resolution.
Q: Can Democrats pass an additional reconciliation bill for FY23?
A: Yes, the new fiscal year presents an opportunity for Democrats to try again, but in order to unlock the process--and the privileged vehicle--under reconciliation, Democrats must first pass a FY23 budget resolution, complete with new instructions to committees laying out the fiscal scope and scale. This stands to be a big hurdle in the sense that such a blueprint would (again) have to pass muster with both chambers just to progress to the point where actual legislation may be considered. Unlike FY22, which amounted to a good faith placeholder that kept the broader Biden agenda alive and delayed tough decisions over what the ultimate package would look like, a FY23 instruction would likely require the contours of a deal to be hashed out in advance, given the effective consensus necessary to proceed.
Q: How soon could Democrats move to tap this FY23 budget resolution and tee up another reconciliation vehicle?
A: Technically Congress could move to visit a FY23 budget resolution whenever they wish. Previous Congresses have enacted reconciliation bills pursuant to a budget resolution in the preceding calendar year, and even the prior fiscal year. Practically, however, it would likely have to wait until the post-election "lame duck" session of congress. Not only would they need to first dispense with the current reconciliation package, a chore which is likely to take at least the balance of the current work period, but also the two stages of floor action would take multiple weeks, notwithstanding any time required for procedural vetting in the interim. The narrow September legislative window will be reserved for time-sensitive "must pass" legislation like the continuing resolution (CR) to fund the government and various reauthorizations tied to the fiscal year calendar. Even if Democrats were inclined to accelerate another package, doing so would likely jeopardize the bipartisan cooperation needed to keep these items on track. (See, e.g. McConnell comments regarding China legislation in light of reconciliation talks.)
The lame duck session is the most obvious window for such action, providing at least 5 more legislative weeks untethered from imminent electoral pressure but carries its own complications. To the extent the election could be viewed as an expression of the will of the electorate, a likely GOP takeover of at least one legislative chamber could cast the last-ditch effort in a negative light. Outgoing members may be more inclined to contemplate their future than take another run at a package that would resurrect big tax hikes. And while the post-election session would liberate certain other members from the electoral pressures they face this summer, it also puts a number of key Senators squarely in cycle--Manchin (WV), Sinema (AZ), and Tester (MT) are up in 2024, among the 23 (of 33) seats Democrats must defend in the wake of a successful 2018 election. This fact is not lost on Republicans, who would surely take full advantage of the opportunity to force difficult votes during the multiple gauntlets Democrats would have to run in order to pass another bill.
Should they decide to make a lame duck run at reconciliation, it would complicate the ordinary legislative housekeeping that tends to accumulate at the end of the year and requires bipartisan cooperation. As in September, 60 votes will be needed for year-end legislation, from government funding to the defense authorization bill to tax policy loose ends. A partisan effort would likely doom a potential omnibus spending agreement, along with any notion of a tax extender deal that could address many of the clean energy policies in question.
Perhaps most importantly, the additional time would do little to solve the underlying problems that prevented Democrats from striking a deal over the previous 18 months.
Q: Has a lame duck Congress ever passed a reconciliation bill?
A: Yes. The first ever true reconciliation package, the Omnibus Reconciliation Act of 1980, was passed by a Democratic House and an outgoing Democratic Senate majority and signed into law by a lame duck President in Jimmy Carter. However, such a maneuver has not been tried again in the 42 years (and 21 reconciliation bills) since.
(Note: While this precedent would surely be cited if Democrats decided to pursue this path, it should be noted that the lame duck activity was limited to resolving differences between previously-passed bills, and the final conference report product was overwhelmingly bipartisan.)
[This is an excerpt from the July 22 PRG weekly reconciliation update. Read the rest of my firm’s reconciliation updates here. And if you like my “Bottom Line” analysis, check out my moderated discussion with my colleague Yasmin Nelson, who pens “The Breakdown” newsletter. Watch on Youtube or listenwherever you get your podcast.]