Reconciliation 1982: What Happened?

Reconciliation 1982: What Happened?Author(s): Jean PetersSource: PS, Vol. 14, No. 4 (Autumn, 1981), pp. 732-736Published by: American Political Science AssociationStable URL: http://www.jstor.org/stable/418696 .

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Reconciliation 1982: What Happened? Jean Peters* Staff Associate House Budget Committee

Reconciliation was marked by confusion and misunderstanding on Capitol Hill. Still, this unusual procedure permitted the Reagan Administration to have its budget considered and approved as a single package.

In 1974, Congress passed a budget act to assert control over the federal budget and free itself from executive dominance over spending plans.' In 1981, that act instead provided the Reagan Administration with a tool to put forth its economic program as a single philosophical package and to restructure basic social legislation to reflect that philosophy. The tool is reconciliation. Reconciliation has been slowly ripening on the budgetary vine for several years. The combined adroitness of key Administration budgeteer, David Stockman, who went from Michigan congressman to director of the Office of Management and Budget, along with the current economic climate, provided a unique opportunity for the executive branch to use congressional procedures to bypass normal congressional control over the federal budget. The use of reconciliation this year signaled a major change in the way Congress addresses spending decisions. It also dramatically altered the way constituent groups scramble for particular programs. The sheer mass of the reconciliation bill, which altered the course of more than 250 programs worth $36 billion, and the abbreviated time frame for considering the changes, prevented groups from singling out danger to specific programs. In addition, the question of whom to lobby became increasingly slippery. Authorizing committees pointed to the budget committees as the ultimate enforcers of cuts, while budget committee members insisted that they were mere "facilitators," keeping the reconciliation plans on schedule, making suggestions, but ultimately playing no direct role in the actual drafting of cuts. Lobbyists for targeted programs were forced to run between authorizing and budget committee members and staff, looking for places to interject their views. In the end, such activity was virtually for naught. The final bill was drafted largely by OMB from a blueprint of the Administration's plan.

Paving the Way for 1982

Reconciliation as envisioned by the budget act is relatively straightforward: Once Congress establishes spending ceilings, legislation which would mandate spending in excess of those ceilings is required to be changed. Committees with jurisdiction over such legislation are ordered to "reconcile" spending totals with the mandated levels. The changes are then compiled by the budget committees and taken to the floor as a package. As proposed in the budget act, reconciliation does not take place until after the second resolution, which sets binding ceilings, is in place. In practice, however, the

* Jean Peters is a former Ohio journalist and APSA Congressional Fellow now serving as associate staff member on the House Budget Committee for Illinois Representative Paul Simon 'The Budget and Impoundment Control Act of 1974, Public Law 93-344.

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second resolution is acted on only a couple of weeks before the fiscal year starts, if then, allowing little or no time for committees to comply with the instructions. As a result, reconciliation languished in disuse for the first several years of the budget process. Sheer lack of time to comply with its procedures rendered it impracticable. However, it became even more clear as deficits persisted and grew and inflation worsened that the mere existence of a budget process would produce no magical reforms in spending policies. Unless some mechanism were introduced that forced adherence to reduced spending levels as set forth in the first budget resolution, second resolutions would simply reflect increased spending, and third resolutions would become increasingly necessary to accommodate appropriations in excess of that an- ticipated by the second resolution. n 1980, the budget committees looked for a way to make practical use of this untested method of controlling spending. Then, as now, the economic atmosphere was key. Congressional leadership from both houses had closeted themselves with members of the Carter administration in the Capitol for eight days in March, 1 980, with express agreement to produce a balanced budget plan. The marathon session produced plans for approximately $1 5 billion in spending reductions and an additional $4.6 billion in new revenues. The budget committees turned to an obscure provision in the act which essentially allowed them to institute "any other procedure which is considered appropriate." Reconciliation as part of the first budget resolution was born.

The use of reconciliation this year signaled a major change in the way Congress addresses spending decisions. It also dramatically altered the way constituent groups scramble for particular programs.

Again, perhaps unwittingly, committees in 1980 paved the way for a further per- mutation of the process. Under the budget act, reconciliation may be used only in the case of legislation where the government is "obligated to make outlays." Such obliga- tion only exists in entitlement legislation, where the government must fund the program for anyone eligible who participates. Discretionary spending controlled by the appropriations process was not subject to reconciliation procedures. However, some authorizing committees opted to make authorization reductions count toward reconciliation totals. For example, the House Education and Labor Committee counted a drop in authorization for the food service equipment program towards its reconciliation mandate. With these precedents established, the groundwork for this year's process was firmly in place.

A Question of Approach

The drafting of a spending plan for 1982 was universally approached with budget- cutting knives unsheathed. When President Reagan unveiled his "Program for Eco- nomic Recovery," calling for massive budget cuts, new House Budget Committee Chairman James Jones (D-Oklahoma) countered with a resolution which skated relatively close to spending levels proposed by the Administration but which left authorizing levels intact. The President's plan, meanwhile, proposed the wholesale elimination of funding authority for a host of programs. Although much of the debate centered around major differences in economic assump- tions between the two proposals, the spending debate centered not so much on the

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levels, but on the permanence and direction of the cuts. The difference lay in the reconciliation instructions. Under the committee's plan, 14 committees would be required to reconcile a total of $15.8 billion in 1982. Another $20 billion in savings was expected to be realized through the appropriations process. The Republican substitute instead called for the entire $36 billion to be cut via the permanent reconciliation of authorizing levels below current appropriations. The Senate, which had passed its version of the President's plan nearly a month earlier, had similar reconciliation instructions calling for $36.9 billion in cuts. The difference in approach was clear. Technically, as with the budget resolution itself, reconciliation instructions can only instruct committees to reduce spending by a cer- tain total; they cannot dictate where reductions are to be made. However, for all practical purposes, reconciliation instructions in the House Republican substitute and in the Senate plan were backed up by detailed provisions for achieving nearly every spending cut. The substitute, introduced jointly by ranking Budget Committee member Delbert Latta (R-Ohio), and its newest member, Phil Gramm (D-Texas), passed the House on May 7 in a blast of political fanfare. Addressing a joint session of Congress, President Reagan made his first public appearance after being shot the previous month to urge passage of the Republican budget package, known as Gramm-Latta. Sixty-three Democrats defected to give him that victory, 253 to 176.

Confusion

It was several weeks before House committees grasped the magnitude of the reconciliation chore they had shouldered. The Budget Committee was left to define its role as enforcer of a resolution it had not drafted. Jones and several of his committee members voted for final passage in order to retain their role as shepherds of the process through the committees. Budget committee majority staff members, charged with the task of allocating all the expected cuts among subcommittees and programs, were left to unravel a mishmash of proposals, some of which were wholly mis- directed. For example, Gramm-Latta ordered the House Judiciary Committee to reconcile $63 million for the Office of Juvenile Justice, a program under the jurisdiction of the Education and Labor Committee.

Leadership had played what it considered its strongest card, control over House procedures. However, the Reagan persuasion machine went into gear again.

With less than three weeks to act under reconciliation rules, the committees learned exactly how much they were required to cut. The House-Senate budget conferees agreed to establish a spending baseline consisting of the current level for all programs, with an adjustment for inflation. The baseline was developed by the Congressional Budget Office, which was also charged with tallying up the savings effect of any changes proposed by the committees. The confusion as to how to proceed was compounded by a lack of cohesive strategy from the House Democratic leadership. For the Education and Labor Committee, the indecision was particularly acute. Assured that he would be allowed several line-item amendments on the floor, Education and Labor Chairman Carl Perkins (D-Kentucky) and his majority members drafted reconciliation instructions that took deep swipes at such popular programs as Head Start, student loans, impact aid and food for the elderly. 734



Within days of that action, however, the continued momentum of the Republican tide was becoming increasingly apparent. In an unsuccessful effort to head off another Republican substitute, the House leadership reversed itself, opting to support a closed rule for the bill. Embarrassed and enraged, Education and Labor Democrats caucused again the morning before final reconciliation instructions were to be packaged by the Budget Com- mittee. They reversed their earlier action with a second plan that restored most of the funds that had been cut, and instead made cuts, supported by the Administration, in public service employment and school lunch subsidies. A second major reconciliation snag occurred in the Energy and Commerce Committee, where the defection of three Democrats left the committee in a 21-21 tie. With no committee recommendation, the Budget Committee opted to include the plan proposed by the Energy and Commerce Chairman John Dingell (D-Michigan) and decided to ask the Rules Committee to allow the Minority's plan to be considered separately on the floor. Of the 1 5 House committees, most reported their recommendations with bipartisan support. Still, as the Rules Committee began hearings on floor procedures, the Ad- ministration opted for yet another major play. St'zkman called Jones shortly after the committee reported its bill and told him the reconciliation package fell short of the Ad- ministration's expectations by several billion dollars. Among items Stockman claimed were in arrears in the reconciliation scorekeeping were cuts the Administration had proposed in food stamps, social security minimum benefits, subsidized housing, student loans, school lunches, and a series of block grants in education, health and social services programs.

In the final moments of the debate, Jones charged the cloakrooms had "'all the earmarks of a tobacco auction. "

A furious Jones countered on the floor that the reconciliation bill reported by the Budget Committee actually cut $2.6 billion more than the President had requested. The difference, he said, lay in whether the cuts would be made by the committees or dictated by OMB. The Republicans proposed to remedy the shortfalls with their own substitute reconciliation bill. The Rules Committee agreed to allow the alternate bill but, in an attempt to diffuse, support, required the substitute be offered in six separate amendments. Leadership had played what it considered its strongest card, control over House procedures. However, the Reagan persuasion machine went into gear again. Wavering Democrats who had previously supported the President were called to the White House and given cufflinks; campaign contributors were asked to contact their members and urge support. In the final moments of the debate, Jones charged the cloakrooms had "all the earmarks of a tobacco auction." The Republican victory was stunning, if narrow. The rule sought by the Democratic leadership was defeated, 210 to 217.

Gramm-Latta II: Legislative Wonder

The victory was a double-edged sword for the jubilant Republicans, who were left literally to fashion their substitute package overnight. The document they introduced the next morning as Gramm-Latta II is itself a legislative wonder. Pieced together by the Government Printing Office's camera offset process, the bill contained duplica- tions, errors, an indecipherable jumble of multiple page numbers, handwritten scrawls

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and extraneous material, including an unfortunate bureaucrat's phone number. Cir- cumventing the normal committee process, it also contained proposals for a restruc- turing of a variety of social programs. There was yet another twist. Unable to gain consensus for a substitute energy and commerce package, the Republicans finally opted to include the original D"ngell package in the bill. The physical appearance of the substitute and the obvious unfamiliarity of anyone in the House with its contents, provided the Democrats with a strong argument for its defeat. However, that argument was not strong enough to carry in the face of the now imperative Presidential "mandate." The substitute carried, 217 to 211. As the debris from the bill was cleared from the aisles of the floor and dejected Demo- crats and ecstatic Republicans left for the July 4 recess, staff remained behind to sort out and establish ground rules for the largest conference committee in the history of the legislature. In all, more than 250 members participated in a total of 58 subconferences spread among 30 House and Senate committees. For weeks committee staffs worked to determine exactly what was in the House- passed substitute and to compare it with Senate numbers. Slowly, staff brought into focus the cuts proposed by both sides. Once the scope of conference was deter- mined, staffs began the process of parry and thrust to narrow further the items in dis- agreement. Conference dress rehearsals were held in staff meeting rooms all over the Hill in an effort to orchestrate all but the most sensitive issues for conferees. The massiveness of the bill required that most items be worked out in advance, if there were any hope of completing the bill before the August recess.

A communication central was set up in the House Budget Committee office, where a huge blackboard charged meeting activity and compiled daily, running summaries of progress. Nine House and six Senate Budget Committee members served as general conferees, with voting privileges at all subconferences. They acted as trouble- shooters, appearing at a moment's notice at subconferences if stalemate seemed im- minent, or if a technical question arose as to reconciliation procedure that couldn't be answered by committee staff. Again, the lobbying community found itself literally shut out of the process. Members wedged themselves into rooms that barely held conferees and key staff, while lobbyists milled the halls outside. In one case, lobbyists and Capitol guards came to near blows as the knot of professionals in the hall outside a subconference grew louder and larger than the number of people sandwiched inside the meeting room. Left largely with only narrow differences to decide, the conferees reached final agreement on details of the deepest and most widespread cuts in the history of Congress late the night of July 28, less than a month after beginning the conference. Final passage of the conference was devoid of debate. It passed the House on voice vote, and the Senate by a vote of 80 to 14. Close scrutiny of the final conference details dissolved in the press of the tax bill fight which emerged simultaneously. Reconcilia- tion was signed into law by President Reagan a few days later on August 13, but the new law still was not printed when Congress reconvened in early September to grind the appropriations bills through the newly narrowed authorizing levels. With the spec- tre of an ever-growing deficit looming, the question of when, or if, reconciliation will be used again, remains.

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Documents

Reconciliation 1982: What Happened?