July 19, 2017

When Dominoes Fall

Charles Merin, Marty Paone

“ No man is an island entire of itself; every man is a piece of the continent, a part of the main”

John Donne, 1624

Though best known for his poetry, Donne is perhaps also deserving of due as a legislative strategist and as a perceptive observer of the very human process that ultimately defines governance. Legislating is often a one-sided craft that produces bills with no guarantee of enactment into law. Governance demands a more demanding and nuanced skillset, one that adapts prevailing realities to the focused goal of approving legislation that can become law. At least to we two veteran Democrats, Republican majorities in the House and Senate have relied far too heavily upon the former rather than the latter in their determined efforts to repeal and replace the ACA.

No one yet knows how Senate deliberations regarding health-care reform will definitively end. The Senate seems likely to shortly take up a motion to proceed whose outcome is clouded. Should that motion be approved, after no more than 20 hours of debate, the Senate will then undertake a legislative vote-a-rama of bipartisan amendments, many of which will have been crafted with maximum partisan malice in mind. Senators on both sides of the aisle will be forced to cast politically undesirable votes, all of which will be for naught if the underlying effort ultimately fails. The current fratricidal nature of Republican legislative efforts to repeal and replace have highlighted the deep-seeded philosophical differences within their Party about the role of government in people’s lives, a debate which will continue as lawmakers move on to looming debt ceiling, tax reform, and budget fights. Unless and until Republicans in both Chambers can reach a philosophical consensus about how best to answer that question, legislative activity will continue to be confused with the pursuit of governance. As our friend, Stan Collender, recently noted in one of his columns, “52 Senate Republican votes doesn’t guarantee victory.”

Should current repeal and replace efforts fail, the Senate may be forced to turn to the quaint and somewhat anachronistic practice of holding hearings and drafting bipartisan legislation. Senator McConnell would likely turn to his Democratic counterpart, Senator Schumer, to convene a working group of Chairs and Ranking Members from jurisdictionally relevant Committees to begin putting pen to paper to craft long-needed improvements to the ACA.

This action, however necessary in terms of rectifying the ACA’s flaws, is likely to trigger resentment amongst some of the more philosophically dogmatic Members of the GOP in both Chambers. Their reaction and its’ potential corollary impact on looming must-pass legislation, will go a long ways towards determining whether the government defaults on its debts and even shuts down this Fall. For those of us who believe that our nation’s problems are complex and requiring of equally textured solutions, a retreat to bipartisanship seems like a desirable way to go.

We fail or succeed as Americans, not as Republicans or Democrats. Knowing that, our goal is to articulate for you varying legislative paths forward, some of which could result in real solutions, others of which would only exacerbate an already tenuous legislative and political quagmire. What jumps out at both of us is the memorable way in which each exquisitely distinct current policy movement is impacted by the larger legislative and political whole. For legislative and political junkies this is thrilling; for the majority of “real Americans”, it represents yet another tumultuous turn in the seemingly never-ending and demoralizing ride that has come to define Washington’s inability to address their real and immediate needs.

Here, then, is how the next few weeks and months may unfold:

Senator McConnell has indicated that he wants to go ahead and have a vote on proceeding to HR 1628, the House passed reconciliation healthcare bill, during the week of July 24. The motion to proceed is not subject to debate so once he makes it there would be an immediate vote. Hence, we assume some debate prior to him moving to proceed. If the vote is unsuccessful, it will show he tried his best, and it will identify those members of the majority who were not willing to support their leader in this effort. The bill will remain on the Senate Legislative Calendar and is accorded reconciliation privileged status until the Congress enacts a Budget Resolution for FY 18. It’s unclear if it retains that privilege beyond October 1 in the absence of passage of the FY 18 Budget Resolution; that procedural quandary is still being studied. Senator McConnell may fill the remaining weeks with an FDA Authorization bill and some nominations, including that of Christopher Wray, the new FBI Director.  A debt limit extension has been mentioned as a possibility, but passage of a clean debt limit prior to the recess will be a heavy lift.  The original intention was to also act on the Defense Authorization bill but Senator McCain’s health may take that off the table.

The House unveiled its FY 18 Budget package on July 18, in addition to reductions in domestic discretionary spending while increasing spending for Defense it also includes some $203 billion in entitlement cuts over 10 years. The House Budget Committee is scheduled to report this Budget on July 19, with a vote by the full House soon to be scheduled. Though there are reports that there are not enough Republican votes for it on the floor, for some Members it goes too far, for others it does not go far enough in enforcing fiscal discipline. The desire to complete action on this Budget Resolution stems from its reconciliation instructions to the tax writing committees to produce a tax reform bill, which, like the current House passed healthcare bill, cannot be filibustered in the Senate.  If the FY 18 Budget Resolution is agreed to by both the House and Senate, then the healthcare bill, spawned by the FY 17 Budget Resolution would lose its reconciliation status and would be subject to filibuster.

Normally, Congress passes a budget resolution in the spring and the appropriations committees mark up their bills based on the amount of money the resolution has allotted for the coming fiscal year. This year, however, the appropriations committees in the House and Senate have gone ahead and marked up their bills, with Leadership concurrence, based upon their own funding levels. In the House, all of the bills have been reported from committee but none have been passed on the floor.  In the coming week the House plans to pass a minibus bill consisting of Defense Appropriations, Energy/Water, Military Construction/Veterans and Legislative Branch bills. The House is not planning on working into the August recess unless the Senate passes and sends to it a healthcare bill. September will be a busy month as both bodies will need to work on enacting all 12 appropriations bills in order to avoid a government shutdown on October 1.

The Budget Resolution’s increased Defense spending exceeds the $549b cap that is set in statute by the 2011 Budget Control Act. As a result the Defense Appropriations bill will be subject to a point of order that require 60 votes in the Senate. Democrats will insist on an increase in domestic discretionary spending before they agree to a higher defense spending number. If this is not included in an omnibus spending bill, the lack of a timely agreement could result in a government wide shut down. If a Debt Limit extension has not been passed and signed into law by sometime in October a worst case scenario could result in a default during the shut-down—a perfect storm of bad news.

But enough of Kelly’s Hero’s ‘negative waves’.

The House and the Senate could agree on a bipartisan omnibus appropriations package and avoid a shutdown. Such a massive bill with something for everyone could prove an excellent ‘horse’ to carry a debt limit extension. If this were to be accomplished in a timely fashion in September, Senator McConnell could then again move to proceed to the House passed healthcare bill. This time, however, he could offer a tax reform amendment.  The original reconciliation instructions did not say how the Finance and the HELP committees had to save their $1b over the 10 year budget window. Thus, as long as his amendment met that criteria it would be protected by reconciliation and could be eventually passed and sent to the House for consideration. This would come in handy if the House fails to pass its Defense spending increase/entitlement cuts Budget Resolution.

As regards infrastructure legislation, unless Republicans decide to attempt to use next year’s FY 19 Budget Resolution to give it reconciliation protection it will need to be a bipartisan bill requiring 60 votes in the Senate. We have yet to see an interest in that type of bipartisan legislation but there’s always a chance that Ryan and McConnell will want to enact a bipartisan accomplishment as they head into next year’s elections.

Admittedly the above tax/appropriations scenarios are the possibilities on the outside edge of two extreme poles but they do give one something to ponder while sipping the daiquiri at the beach and avoiding all of DC’s ‘fake news’. We hope that our fearless forecasting and procedural legerdemain have illuminated the potential legislative path forward, which remains inscrutably clouded by an infinite number of  “what might be’s.”


Chuck Merin

Chuck, Prime Policy Group’s executive Vice President, possesses more than 45 years of Washington experience, beginning with service as a congressional staffer. He has established himself as the premier lobbyist for service and hospitality industry interests in Washington. He is an expert in building legislative coalitions and helping clients forge effective, long-term relationships on Capitol Hill. Chuck is perhaps best known for his close affiliation with the Blue Dog Coalition, an alliance of more than two dozen pro-business, conservative House Democrats whose votes are much coveted.

Marty Paone

Martin P. Paone is a Senate Procedure expert and serves as a Senior Advisor at Prime Policy Group. Marty rejoined the firm after a two-year hiatus spent working for President Obama as his Deputy Assistant for Legislative Affairs and Senate Liaison. Marty served on Capitol Hill for 32 years, including 13 years as Democratic Secretary