This week you’re going to hear the same two phrases… a lot. Budget resolution and budget reconciliation. We’ve provided an overview of The Budget Reconciliation Process in a previous blog post, but this time we wanted to get a bit more in depth, especially since a closely divided Congress may end up using the reconciliation process more frequently as a way to pass substantial health policy.
The Budget Resolution
Earlier this week, the House Committee on the Budget released the 2021 Budget Resolution, a framework that will guide Congress as it seeks to pass President Biden’s American Rescue Plan, a $1.9 trillion proposal aimed at responding to the pandemic and providing economic security for those affected by its consequences.
Simply put, the main purpose of the budget resolution is to define a process by which Congress will consider budget-related legislation that addresses federal spending, revenue, and debt. While it is true that Congress is required to pass a budget for each fiscal year (October 1 – September 30), this process rarely happens in one bill. Usually, there are multiple budgetary measures that establish fiscal policy.
The Budget Process
Usually the budget process begins at the beginning of each calendar year (January-February), with the President submitting a budget proposal to Congress. While the President’s budget does not have any legal authority, the submission is intended to reflect the President’s policy priorities for the following fiscal year, and offers a series of recommendations related to funding federal programs and changes in revenue (e.g. taxes). This budget also gives Congress a good idea of what the President will or will not sign when the final budget passes both chambers and requires a signature from the President.
After submission of the budget proposal, Congress sets to issue a budget resolution. It is important to remember that the budget resolution itself does not go to the President and cannot become law. The budget resolution instead is an agreement between both chambers of Congress on what the federal budget ought to be and the funding levels delegated to each category of federal spending (e.g. National Defense, Medicare, Social Services, etc.) While it does not have the effect of law, the budget resolution is enforceable in Congress and can be used to contest legislation that is being introduced based on the resolution.
The Budget Reconciliation Process
Sometimes, the budget resolution will include reconciliation instructions that direct Committees to enact legislation within each committee’s jurisdiction to meet agreed upon changes in revenue, spending, or the national debt. These instructions are incredibly specific in that they identify specific committees in Congress, and how much spending needs to be reduced or increased, on programs within that Committee’s jurisdiction. The Committee then has full autonomy on policy changes it takes to meet that target. These policies are then usually bundled together into an Omnibus package and passed through both houses. Omnibus may be an unfamiliar word, but you likely better know past Omnibus bills by their acronyms, like COBRA 85 (Consolidated Omnibus Budget Reconciliation Act of 1985).
One unique aspect of the budget reconciliation process is the fact that unlike regular order legislation, the bills passed through reconciliation are limited to 20 hours of debate and only require 51 votes in the Senate. Usually, bills considered by the Senate have no time limits and require 60 votes to end debate – known as cloture – to be considered for a vote. Because of this rule, the minority party in the Senate can often block bills from being brought up for consideration by threatening to filibuster the bill. The reconciliation process prevents that from happening.
The reconciliation process has been used 26 times by Congress, the most recent being the Tax Cuts and Jobs Act, which passed both houses of Congress and was signed into law in 2017.
Limits to the Reconciliation Process
So if Congress has a method to pass votes with simple majorities in both houses, why doesn’t the majority party use it more often? There are predominantly two reasons. First, the reconciliation process is often seen as incredibly partisan. If one party controls both chambers of Congress, they technically do not have to work with anyone in the other party to enact major policies, as long as they get enough votes to cross a simple majority. This is often seen as divisive and can prevent members from working together on other legislation in the future. As divided as the country is today, Congress does still work together to get meaningful legislation passed (e.g. Surprise Medical Billing).
The other reason is the Byrd Rule. In the mid-1980s, the Senate adopted the Byrd rule to prevent any and all legislation from being added to a reconciliation bill as a result of vague instructions in the budget resolution. The Byrd rule prevents the inclusion of any extraneous provisions in reconciliation legislation and defines extraneous provisions if:
- It does not produce a budgetary change
- It produces a budgetary change outside of it’s instructions in the budget resolution
- It is outside of the jurisdiction of the Committee that proposed it
- It is the result of a non-budgetary component
- It would increase the deficit beyond 10-years
- It changes Social Security
Congress also has limits to the number of times reconciliation can be used. The Congressional Budget Act limits reconciliation instruction to only specific changes in spending, revenue, or debt. The Senate has often interpreted these limitations to mean that reconciliation can only be used to specify changes to each of these categories no more than once per fiscal year. In other words, if Congress passes a reconciliation bill that addresses spending, revenue, and the debt in one year, then they cannot use reconciliation again until the following year.
What Can I Expect This Week
With the House Budget Committee releasing its version of the budget resolution, you can expect the Senate Budget Committee to release its version very soon (if not already by the time this post is published). Once these resolutions pass both chambers of Congress, committees will begin including provisions into a reconciliation bill that meet the instructions from the budget resolution. It is important to remember that the reconciliation instructions have been structured to meet the costs associated with President Biden’s American Rescue Plan. While the reconciliation instructions do not specify which policies the committees have to include, it is likely that the final bill will mirror the policy priorities set forth by the White House.
Once the reconciliation provisions are finalized into one bill, Congress will set to debate. The House of Representatives will consider the bill under special rules to expedite the approval of the bill, while the Senate will consider the bill with a limit of 20 hours of debate. Once debate is over and the consideration of all amendments is complete, Congress will take a final vote. If it passes both Houses, the bill will head to President Biden’s desk some time in the next 1-2 weeks for his approval.
How Does Pharmacy Fit Into This
While the American Rescue Plan does not call out pharmacists specifically, the plan does have significant implications for the profession. The President’s Plan calls for:
- $20 billion for a national vaccine program with the goal of vaccinating 150 million people within his first 100 days
- Investment in community vaccination sites and mobile vaccination clinics to reach areas where there is inadequate access
- $50 billion to scale up testing
- Hiring 100,000 new public health workers to support in COVID response activities
- Strike teams to address outbreaks in long-term care facilities
- Additional funding to community health centers and IHS facilities to address health disparities
- $10 billion to expand domestic manufacturing for personal protective equipment
- Subsidizing COBRA and expanding tax credits available through the Affordable Care Act
- Investment in behavioral health services
Pharmacists, pharmacy technicians, student pharmacists, and pharmacy interns are vital resources that must be used to meet these goals.
However, beyond this bill, reconciliation poses significant opportunities for pharmacy. Of the 26 bills that Congress has considered under the reconciliation process, there are numerous provisions that have brought about changes in payment and scope of practice for health care professionals. Furthermore, the reconciliation process could also be used to fund demonstration projects focused on pharmacist-provided services, later requiring the Secretary of Health and Human Services to issue a report to Congress on the cost-effectiveness of these programs and legislative recommendations.
The Future of Provider Status Legislation
It’s time to recognize that the main pathway to achieve provider status under Medicare Part B over the past decade, passage of the Pharmacy and Medically Underserved Areas Enhancement Act, is over. Despite multiple introductions and a majority of cosponsors in both the House of Representatives and the Senate, the effort has stalled due to concerns over the cost and opposition from the American Medical Association. While our national pharmacy associations continue to seek out additional opportunities engaging with the Centers for Medicare and Medicaid Services, we think that the reconciliation process could lay the groundwork for a new approach.