The History of the Reconciliation Process

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"The History of the Reconciliation Process"

It doesn’t have specific bearing on the viability of using the budget reconciliation process to enact substantial health care reform, but this bit of history from Pete Davis helps us understand the context:

When the Budget Act was enacted in 1974, reconciliation was envisioned as the final accounting at the end of the fiscal year containing spending cuts and tax increases to bring the budget deficit back to the level approved in the original budget resolution. The idea was to circumvent the normal impediments, like the Senate’s filibusters and never ending amendments, to achieve deficit reduction. The first reconciliation bill at the end of 1980 fit that conception, as tiny as it was, but the next reconciliation bill, President Reagan’s 1981 tax cut used reconciliation to enact the largest tax cut in U.S. history. Former GOP Congressman and OMB Director David Stockman’s brain child, using reconciliation to expand the deficit with massive tax cuts to take away the federal government’s credit card, worked like a charm legislatively, but spending took off anyway, particularly for defense, leaving record high peacetime deficits that persisted until 1997.

The point is not to praise Reagan or to condemn him, but simply to note that by and large that 1981 reconciliation bill was “the Reagan Revolution.” And since that time there just haven’t been any comparable huge structural shifts in the direction of US domestic policy. It’s not really clear that modern conditions leave any other feasible route to such legislation until such time as some Senate majority decides to change the filibuster rule.

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