Republicans eye obscure budget tool to repeal ObamaCare

Republicans on and off Capitol Hill are rallying behind using a rarely deployed budget tool next year to dismantle ObamaCare.

But the issue of how to use “budget reconciliation” has divided Republicans, with some calling for it to be implemented to overhaul the tax code or to push through major energy reforms.

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The tool is useful because it could allow newly empowered Senate Republicans to pass legislation with a 51-vote simple majority rather than the usual 60, greatly increasing the chances of moving legislation to President Obama’s desk.

And while Obama is certain to veto anything that tries to roll back his landmark healthcare law, Republicans increasingly see reconciliation as an important messaging tool to help paint a contrast with Democrats on ObamaCare ahead of 2016.

 “My guidance is that’s where members are headed,” said one senior Senate Republican aide familiar with the behind-the-scenes budget discussions.

There already appears to be strong bipartisan support to undo smaller pieces of ObamaCare — things like restoring the 40-hour workweek and repealing the medical device tax — so those provisions wouldn’t require the filibuster-proof budget tool.

While Democrats will certainly have more leverage if they retain the ability to use the Senate’s filibuster, Republicans think they can work across the aisle to enact legislation on taxes and energy.

If Republicans are serious about enacting tax reform next year, they should aim for 60 Senate votes, said Douglas Holtz-Eakin, a former director of the Congressional Budget Office who leads the conservative think tank American Action Forum. Republicans will hold 54 seats come January, so they they’d need at least six Democratic votes.

“That’s better for tax reform because it means it’s more durable,” Holtz-Eakin said. “When you’ve done the work of getting the minority to sign on, it makes it much more likely the White House signs it.”

Furthermore, if reconciliation is used on tax reform or energy, Democrats may refuse to cooperate.

The senior Senate Republican aide called it “unrealistic” to turn to reconciliation to pass tax or energy reform.

“That’s a way to pass something, but it’s not necessarily the way to get an outcome,” the aide said. “If you’re looking to get an outcome, which we are on energy and tax reform, using reconciliation won’t get you any Democrat votes for that.”

To be sure, the issue has not been resolved in the Republican conferences.

A spokesman for House Budget Committee Chairman Paul RyanPaul RyanDemocrats plan 'day of action' to keep spotlight on guns Dem protest ignites debate about control of House cameras Gun-control supporters plan next steps versus NRA MORE (R-Wis.) said discussions about reconciliation are ongoing and nothing’s been decided yet. And Ryan, who will grab the gavel of the powerful tax-writing Ways and Means Committee next month, has signaled he’s open to using the powerful budget tool to enact tax reform.

Rep. Tom Price (R-Ga.), who will replace Ryan as Budget chairman, threw out a number of possibilities for which Republicans could use the reconciliation process, including reforms to the tax code, entitlements like Medicare, or energy programs.

“I think the conference has to decide, and will decide, whether or not the tools ought to be used for things that we know will provide a contrast with the president, that we know the president will not support,” Price told reporters at the end of the legislative session. “Or things that will get us to do a true change in public policy with his signature.”

Republicans will likely settle on a strategy in mid-January when they map out their 2015 agenda at a joint House and Senate retreat in Hershey, Pa.

But Republicans are keenly aware that they’ll have to navigate a series of hurdles before they can deploy reconciliation.

First, the House and Senate would have to agree on a budget resolution, no easy feat given that the Budget chairmen, Price and Sen. Mike EnziMike EnziJudd Gregg: The silver lining Judd Gregg: A little change Lobbying World MORE (R-Wyo.), will both be new to the job. And the handful of senators eyeing White House runs might not back the budget blueprint passed by the House.

“2016’s around the corner, so they’re going to be careful of what they’re voting on in the Senate,” said Bill Hoagland, a former longtime Senate Budget Committee staff director who later served as a top budget adviser to then-Senate Majority Leader Bill Frist (R-Tenn.). “It’s not a foregone conclusion that all Republicans will walk in lockstep together on what comes out of the Budget committees.”

Congress is also extremely limited in how it can use the procedural maneuver — typically it’s reserved for just one issue per budget.

And even then, Senate rules say the reconciliation measure must not hike the federal deficit beyond a 10-year period and do not change spending and revenue.

Republicans will engage in back-and-forth negotiations with the Senate parliamentarian and chief referee, Elizabeth MacDonough, who must decide whether their legislation passes the test, a process known as the “Byrd Bath,” named for the late Sen. Robert Byrd (D-W.Va.).

“It is a tough hurdle to overcome,” said Hoagland, who had been through a few baths of his own during his Senate tenure.

The last time reconciliation was used was 2010, when Democrats — shy of a filibuster-proof supermajority in the Senate — needed it to make changes to the Affordable Care Act.

Republicans should “take the bill that the Democrats passed and you run reverse, you get rid of it. Wholesale,” said Holtz-Eakin. 

“If it’s intended as a message vote anyway, you might as well be aggressive,” he said. “It’s not about the legislating.”

Steve Ellis, vice president of the fiscal watchdog Taxpayers for Common Sense, said he understands why Ryan and others are eyeing reconciliation as a possible vehicle for a major tax overhaul. Both Senate Finance Committee Chairman Max BaucusMax BaucusWyden unveils business tax proposal College endowments under scrutiny The chaotic fight for ObamaCare MORE (D-Mont.) and House Ways and Means Committee Chairman Dave Camp (R-Mich.) never saw tax reform become a reality before their retirements.

But Ellis said it’s also an extremely risky option to pursue.

“It’s a seductive idea, but the proof will be in the pudding,” Ellis said. “Lawmakers have to recognize how much time and effort do they want to put in that ... knowing that it may doom the whole package if you send it to the president for a veto.”