A Major Headache—Reconciliation

Adopting a budget resolution does not suffice to implement the budget policy incorporated in the resolution. Actual spending policy results from a vast number of

[23] Rudolph Penner, former director of the Congressional Budget Office, said: "What the budget process does is generate information." Pete Domenici, chairman of the Senate Budget Committee, echoes this view: "The budget process has served to educate everyone." Dale Tate, "Hill Budget Process Working to Force Economic Decisions," CQ Weekly Report , Aug. 18, 1984, p. 2015.

wholly independent legislative provisions, and they must be made to conform with the resolution if the budget policy is to be realized. There is a great contest in budgetary politics: will committee actions determine the budget policy, or will budget policy determine committee actions? Budget policy before 1980 was subordinated to committee autonomy, but since then initiative has shifted out of committee. The specific means by which the committees have been subordinated to an overall policy are reconciliation and points of order against bills breaching spending ceilings. Reconciliation provides control over existing entitlements while the point of order permits control over new spending legislation. These processes, intimately linked to budget control, more than any other aspects of the budget processes profoundly transgress the traditional rights of committees.

As it has emerged since 1980, reconciliation is the centerpiece of the budget process—the most important means by which extracommittee decisions are carried out at the program level—and the aspect of the budget process least liked among committees. Without reconciliation the budget process does not amount to very much because there is otherwise no practical means of translating into program detail the changes in entitlement spending agreed to in budget resolutions. In their capacities as members of Congress, they understand the necessity of having such a procedure to help them deal with large deficits. But when members consider the programs of their own committees, they seem to think the absence of an institutional capacity to reconcile spending policy with an overall budget policy a fine state of affairs. One slightly overwrought member of the staff of the House Interior Committee contended that a highly

centralized procedure like reconciliation has no place in Congress, "the people's branch." He contends that Congress, with reconciliation, bears an uncomfortable resemblance to the Soviet Union. That constitutes the most extreme view of reconciliation, but, even among individuals less given to hyperbole, the process is tolerated as, at best, a necessary evil.

Inducements to members to defend their jurisdictions are powerful, to be sure, but success of the budget process as more than an "accommodating" adding machine demands that committees' grip on entitlements be loosened. Entitlements are the largest portion of the budget and the source of most rapid spending growth. Should control of entitlements remain in committee hands, with the committees of jurisdiction practically able to veto proposed spending reductions, congressional control over spending is virtually impossible.

The committees instructed to produce reconciliation savings are allowed to meet their target in any manner they choose, although the resolutions reflect certain assumed program changes. In the case of the Post Office Committee, budget resolutions have frequently assumed that the committee will meet their reconciliation targets by capping cost of living allowances (COLAs), but the Post Office Committee exercises its discretion and never caps COLAS. Likewise, a popular idea for raising revenue has been to introduce user fees for services that the Coast Guard provides to pleasure boaters, such as pulling grounded boats off of sand bars and rescuing yachters who run out of gas. However, the members of the House Merchant Marine and Fisheries Committee are implacably hostile to any such suggestion. Reconciliation instructions in the FY 1988 budget resolution charged the committee with finding deficit reductions

worth $94 million, assuming that the committee would institute Coast Guard user fees. However, "in a clever turn of the tables, Merchant Marine members decided instead to apply the 'user fee' concept to a constituency less well represented in their districts: operators of foreign oil tankers bearing the American flag as they steam through the Persian Gulf."^[24] The Reagan administration's plan to reflag Kuwaiti oil tankers and provide them with the protection of the United States Navy may or may not have been good foreign policy, but it came as a godsend to the Merchant Marine Committee.

The Merchant Marine user fee proposal highlights certain problems with the reconciliation process. The rules in the Budget Act governing reconciliation state that the committee-produced reconciliation legislation goes to the budget committees, which do not change the reports, but merely bind them all into a single reconciliation bill that then goes to the floor, via the Rules Committee. However unwise or preposterous the legislation a committee writes, the budget committees are not permitted to change it. Moreover, because few amendments are permitted to the reconciliation bill (too many amendments might cause the whole package to disintegrate), it is difficult to fix problems during floor debate. Reconciliation bills are express trains zooming through Congress, and what committees manage to pack into them winds up in law.

Consider the disruptions a process of this kind imposes on committees. First, they lose control over their agenda when deprived of their option of not acting. Second, on the floor their legislation is considered not on its own, but as a component of a large package, all of which

[24] CQ Weekly Report, Oct. 17, 1987 p. 2507.

either passes or fails. Regardless of how short-sighted or ill-advised cuts in a particular area might be, they will pass with all the rest if the package as a whole passes. Finally, in practice, it seems that a reconciliation bill will always pass when it reaches the floor because it is unambiguously associated with economy. On the floor, the merits of the individual proposals recede from view, leaving as the nearly exclusive relevant consideration the amount of spending to be saved.

Committees are not forced to comply with instructions, but they frequently do so even when it entails reporting legislation they would not ordinarily favor because of combined inducements and threats. One might expect instead that committees would deny the legitimacy of the reconciliation procedure and refuse to collaborate in dismantling their programs. In the days of "legislative savings," members of Congress would first vote on the floor in favor of a budget resolution that implied cuts in their programs, then retire to their committees where they would proceed to ignore their injunction to themselves. Why have members not behaved similarly with reconciliation, sabotaging it through inaction? Such defiance can readily be imagined. Although reconciliation is said to be "binding," nothing is truly binding in Congress. Members of recalcitrant committees will not be locked up, their salaries will not be withheld, nor will their property be confiscated. If not such sanctions as these. what accounts for committee compliance with reconciliation?

Reconciliation and assumed legislative savings, two different efforts to control spending, vary in not only the rate of success but also the manner of adoption. Legislative savings, the precursor to reconciliation, was a budget committees' initiative. The policy changes incorporated

in reconciliation are negotiated in larger, more authoritative bodies. The lack of deference accorded legislative savings by committees is hardly surprising when one considers the rather pusillanimous manner with which the budget committees proposed the savings. Allen Schick discusses implementing legislative savings as policy:

Each year Congress would approve a first resolution assuming that billions of dollars would be saved by changes in entitlements and other laws. These legislative savings, however, were listed in the reports of the Budget Committees, not in the budget resolutions themselves. Hence, there was no vote in the House or Senate on these assumed savings…. Both the Budget Committees and the affected legislative committees preferred to assume, but not debate, the savings.

The Budget Committees opted for silence because they did not want their resolution challenged as unrealistic or as a trespass on the jurisdictions of other committees. They hoped that, if Congress were to approve the resolution without tampering with the assumptions, it might be possible later in the year to push for the necessary legislation on the claim that Congress had endorsed the savings when it adopted the resolution.^[25]

By not forcing the issue of legislative savings the budget committees avoided embarrassing floor defeats, but they also invited disrespect. Not demanding a floor vote deprived the requested savings of legitimacy.

Reconciliation instructions have not been surreptitious

[25] Allen Schick, Reconciliation and the Congressional Budget Process (Washington, D.C.: American Enterprise Institute, 1981), pp. 5–6.

budget committee initiatives; they have been explicitly incorporated in resolutions; they have been debated and voted on by the entire chamber; and they have won. Because of the manner of adoption, reconciliation deserves and receives a far different reception among the committees than if it had been a budget committee product. The instructions are clearly heard as the voice of the entire chamber, and that makes a difference. On several occasions when I asked committee staff why their committees troubled themselves at all to respond to reconciliation instructions, they replied that they felt there was no choice. When instructed in unequivocal language to produce budget savings, committees apparently feel some obligation to comply. They prefer not to flaunt the expressed will of the Congress.

The perception of greater legitimacy alone does not account for compliance with reconciliation. Committees also fear that, if they do not respond appropriately, either the Budget Committee or the minority will draft substitute reconciliation legislation that will pass on the floor. This, of course, happened in 1981 when the Gramm-Latta substitute amendment to the reconciliation bill passed and produced far greater damage to programs than would have occurred if the committees themselves had produced more serious reconciliation legislation. A desire to maintain control over their programs thus motivates committees to meet their instructions. Democratic members of the House Post Office Committee do not like reconciliation cuts. "Sometimes we respond," a senior staff member explains, "but usually we don't." Some members of the committee believe they should not participate at all in the reconciliation process, but another, larger group is of the view that "stonewalling" would be counterproductive because the

committee would lose control over their programs. By participating in a limited fashion, they can minimize damage.

Committee members must strategically calculate how little in reconciliation savings they can report and still avoid passage of a hostile floor amendment. They need not produce the full amount requested to avoid an amendment, and they never report legislation fully in compliance. But there are also vague limits beyond which they cannot go. "You have to avoid pissing off the Budget Committee" to keep them from supporting a floor amendment to a committee's reconciliation package, a member of the staff of the Post Office Committee reports. The 1982 (FY 1983) instruction to the Post Office Committee called for savings of about $3 billion or so, assuming the usual enactment of a COLA cap, but the committee reported savings of only about $200 million. Committee members calculated, correctly it turned out, that a floor amendment to limit COLAs would not pass. But it was also important that the committee report at least something; otherwise there would be no assurance that committee members would be appointed to the conference committee. In negotiations with the Senate, they ultimately did come much closer to the instruction (at least partly because House Budget Committee members participate in all reconciliation conference committees), but did so leaving the COLA largely intact.^[26]

[26] They reduced the COLA by half for retirees under sixty-two years old. Doing so saved money and mainly affected military retirees, who are of less concern to members of the Post Office Committee than of the Veterans Affairs Committee. The Veterans Committee had tied veterans' retirement policy to civil service retirements, so that whenever an increase was passed for civil servants, veterans would benefit also. Members of the Veterans Committee were not present at the conference and could not protect the interests of their constituents.

The manner of considering all reconciliation legislation together discourages certain kinds of tricks. If members of a committee could be sure that their legislation would be dealt with separately on the floor, they could feel relatively safe in reporting out the most outlandish recommendation—proposing to cut all their most cherished and popular programs—expecting that in a separate up or down vote, it would go down. This again is the "Washington Monument ploy." But when all committee packages are voted on together and amendments to delete individual committee sections are prohibited, then such a strategy of noncooperation cannot be safely pursued. What if the bill were to pass? In 1981 the Education and Labor Committee began to pursue this strategy but altered course upon learning that the Rules Committee would not accommodate their request for a separate vote. At the last minute the committee had to regroup and report a fresh, more serious proposal.

To maintain control over their own legislation, committees would prefer to focus more attention on the details and less on broad fiscal issues. A huge reconciliation bill such as that which passed in 1981 focuses almost all attention on fiscal issues. The policy issues involved in a bill cutting a hundred programs cannot be comprehended or discussed practically. In 1981 this was a problem for Democrats (and a blessing for Republicans) because it made possible the passage of substitute reconciliation legislation in place of the committee-reported legislation. If the reconciliation bill had been passed in pieces, the position of the committees would have been stronger, and, although some substitute legislation would have passed (probably in place of the Post Office and the Education and Labor packages), most

committee recommendations would have been upheld. In 1982 the budget resolution allowed reconciliation legislation reported out of committee by an early date to come to the floor on its own, mollifying at least slightly the committees involved. Again, the threat of losing control over their programs encourages committees to comply.