Democrats Poised for Health Care Fight Over Arcane Byrd Rule

Sen. Chuck Schumer (D-N.Y.) (Rob Kunzig/Morning Consult)

Even if House Republicans manage to get enough members of their party on board with the latest version of their health care bill, they will face another battle in the Senate: whether the bill complies with the chamber’s arcane budget rules.

But experts say that’s one battle Democrats have a chance of winning — unless the Senate pulls another “nuclear option.”

Republicans hope to overhaul the Affordable Care Act using reconciliation, a legislative tool that enables the GOP to pass budget legislation with just 51 votes — eliminating the threat of a Democratic filibuster.

But the revisions that may win over enough GOP votes for House passage may not survive the Senate’s Byrd rule, which stipulates all provisions in a reconciliation bill must affect federal spending and revenues in a way that is not merely incidental.

Matt House, a spokesman for Senate Democratic Leader Chuck Schumer (D-N.Y.), said Democrats would challenge the health care bill on these grounds.

“That effort is almost certainly going to run afoul of Senate reconciliation rules, ensuring that the bill with these provisions will need 60 votes to pass,” House said in a statement.

The House GOP compromise allows states to opt out of requiring insurers to cover essential health benefits and waive certain community rating rules, which prohibit insurers from charging people more because they are sick. The deal would also let states bar insurers from charging people more if they have a gap in coverage.

Whether these changes to state insurance rules comply with the Byrd rule comes down to the provisions’ motives, and whether they directly affect federal spending, or only indirectly via state action.

With Democrats poised to challenge the bill if it passes the House, the Senate parliamentarian, Elizabeth MacDonough, will have to decide.

A Senate GOP aide said the House legislation hasn’t been reviewed yet to ensure adherence to the Byrd rule; that only happens once the House actually passes the bill.

One argument in favor of compliance with the Byrd rule is that the changes would reduce premiums, prompting more people to obtain health insurance, and therefore lead to greater use of federal tax credits — a clear link to federal spending, said Edward Lorenzen, a senior adviser at the nonpartisan Committee for a Responsible Federal Budget.

But Lorenzen said that doesn’t settle the debate over whether the spending changes would be due to state action, or the direct result of the legislation.

“I think an honest application of the Byrd rule would say that none of this is acceptable for the primary reason that it’s directed at the insurance markets and actions by state government so it doesn’t have a significant and direct impact on federal spending,” Gregory Koger, an associate professor of political science at the University of Miami, said in a phone interview. He said the bill’s main purpose is to change insurance rules in states — not to affect federal spending.

The parliamentarian has never formally ruled on whether changes to insurance regulations violate the Byrd rule, and MacDonough hasn’t shared her inclinations on the matter.

But if she were to rule against the GOP, some Republicans, such as Sen. Ted Cruz (R-Texas), argue the chamber’s presiding officer could simply reject her advice.

Sarah Binder, a political science professor at George Washington University, said there is nothing in the Byrd rule that prohibits the presiding officer from rejecting the parliamentarian’s recommendation. But that would be an unprecedented step, not unlike Senate Majority Leader Mitch McConnell’s move this month to kill the filibuster for Supreme Court nominees.

“It would be a further step towards converting the Senate into a partisan battleground and violating the norms and practices of the Senate as they’ve been developed over the last 30 years,” Koger said.

At least one Senate GOP leader, Majority Whip John Cornyn (R-Texas), has already tamped down talk of rejecting the parliamentarian’s advice.

“Not taking the [parliamentarian’s recommendation], that would be the ultimate nuclear option,” Binder said.

Correction: An earlier version of this story incorrectly stated when McConnell killed the filibuster for Supreme Court nominees.

Morning Consult