Last week both the House and Senate passed their budget resolutions setting up a negotiation over the spring break.  On Wednesday, March 25 the House of Representatives gave final approval to their version of a budget resolution (H. Con Res 27). The resolution passed with Republican votes only.  It passed by a vote of 228 to 199.  The passage of the resolution is an important victory for Speaker John Boehner (R-OH).  As recently as one week earlier it looked as if passage was in doubt. The House leadership came up with a plan that would pacify all the conservative members of their caucus by allowing votes on all the various budget resolution proposals with the last one with the highest vote total winning out.  What the budget resolution meant is significant increases in defense spending without doing away with the sequestration budget caps. Early on Friday morning (3:00 AM) the Senate adopted its measure, S. Con. Res. 11 by a vote of 52 to 46.  The final vote split along party lines with two Democrats, Senator Barbra Mikulski (D-MD) and Senator Dianne Feinstein (D-CA) abstaining and Senator Ted Cruz (R-TX) and Senator Rand Paul (R-KY) as the lone Republicans to vote against it.  Before the final vote the Senate engaged in an extensive week long debate on the budget resolution with more than 100 amendments offered, most setting up recorded votes on issues around Medicare, Social Security, military spending, the minimum wage, the environment and others issues intended to force senators into a position.  Through it all much of the attention was on four members of the Senate who are or are likely to run for President: Senator Ted Cruz, Lindsey Graham (R-SC), Senator Rand Paul, Senator Marco Rubio (R-FL).  And much of that focus was on their positions on increased defense spending.

The House resolution includes more than $5.5 trillion in cuts over 10 years.  It would convert Medicaid into a block grant to states and reducing projected funding by $913 billion over that ten year period.  It would repeal the Affordable Care Act and save $2 trillion over ten years by keeping in place the medical savings realized through spending cuts and revenue and tax increases that were a part of the ACA.  It would save $150 billion in Medicare largely by converting it into what some call a “premium support” program that others see as turning the retiree health insurance program into a voucher to buy health insurance on the private market.  It also envisions converting the Supplemental Nutrition Assistance Program (SNAP) into a block grant.  That is part of a directive in the resolution that would save $1 trillion in mandatory spending cuts (in addition to the changes to Medicaid, Medicare, and the ACA).  The broad cut in mandatory spending would likely include the elimination of the Social Services Block Grant (SSBG) which was not specifically singled out as it has in some recent House Budget resolutions.

The Senate proposal differs from the House plan but still includes significant cuts of $4.5 trillion over ten years, lower than the House target but severe none-the-less.  The Senate resolution requires $600 billion in cuts through “reform of welfare programs.”  It also envisions additional savings through Medicaid and while it doesn’t specifically call for a block grant of it calls for converting Medicaid to a model similar to the Children’s Health Insurance Program (CHIP) which is a block grant.  It too repeals the ACA but keeps the revenue. The Senate resolution also sets up a reconciliation process bill by the Senate Finance Committee and the HELP Committee to be reported by the end of July.  That could serve as legislation on the Affordable Care Act, repeal or otherwise depending on what the Supreme Court rules in their pending ACA case.

Congress is off for a two-week break and in the interim there will be negotiation between the Republican leadership in both houses to see if they can come up with one central budget resolution, which they are likely to do.  If they can come up with a single budget resolution, it will set up spending ceilings for the 12 appropriations.  It will also set up a reconciliation process sometime later this year. That reconciliation is most significant in that it could short circuit any debate in the Senate prohibiting a filibuster and setting specific time limits on debate.  The majority party could push through legislation that could do any number of things as long as they are somehow linked to a reduction in deficits, allows an increase in the debt ceiling and/or changes in the tax code.

It remains to be seen how the congressional leadership will use a reconciliation tool.  It could serve as a legislative vehicle for something significant in which they would reach agreement with the White House on an issue of mutual agreement such as a form of tax reform or they could use the vehicle to send a stronger political message on some of their priorities such as the repealing of the Affordable Care Act.  Under any circumstance it’s likely the Congress will wait to see what the Supreme Court does on its ruling later this spring or early summer when they deal with the latest challenge to the ACA.  The ACA is under challenge by a group that argues that because of the language written in the legislation, that states that do not run their own health care exchanges and instead rely on the federal health care exchange does not allow the citizens of that state to utilize the federal tax credits that offset the cost of some health care premiums.  If the court were to uphold the challenge it would mean that people living in states that are running their own health care exchanges can continue to receive the federal tax credit for health insurance while people living in other states that depend on the federal government for the health exchange could be denied the same tax credits.  Such a ruling would likely force congressional action and the need for the reconciliation vehicle.