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Budget Reconciliation Crash Course with Holland & Knight’s Rich Gold and Todd Wooten

Patrick Kalie: Today we’re talking about budget reconciliation. I can’t imagine any other group of people getting this excited over a process called budget reconciliation. We’re joined today by Rich Gold and Todd
Wooten. Rich Gold is the leader of holland knight’s public policy and regulation group and focuses his practice at the intersection of complex policy and political issues involving Congress, the executive branch, and the media. The Public Policy and Regulation Group has been ranked among the top law and lobbying firms in Washington by publications including American Lawyers Influence Magazine, Legal 500 United States Guide, Financial Times, and U.S. News Best Lawyer’s Guide. Todd Wooten is an attorney in Holland and Knight’s Washington DC office and a member of the Public Policy and Regulation Group. He advises clients on legislative and regulatory issues, especially related to energy, tax, and technology issues. In addition, Mr. Wooten has served on three Senate committees for four senators. During his time on Capitol Hill he served as the Director of Outreach and senior council for energy and tax on the Senate committee on finance where he coordinated the committee’s communications to businesses and organizations. I will turn it over to you Rich and Todd.

Rich Gold: Thanks so much uh everybody for having us today. I am your eye candy for the day and Todd’s the smart one here. I’m gonna ask a rhetorical question upfront just to kick this off. Since we are talking about the nuts and bolts of budget reconciliation today, the only analogy I could come up with globally for budget reconciliation, in sort of an area of knowledge that has very little use outside of the small group of people who work in that area of knowledge, is something called The Knowledge. If you haven’t taken a cab in London in the last 15 years, this will be arcane for you as well, but the course of study that you go through to learn every street in London and how to get from any place in London to any other place in London is called The Knowledge. As opposed to everywhere else in the world where we are all ubered out and reliant on that, cabs in London are still a thing and are still sort of a historic construct. You can hop in a car in London and be taken anywhere you need to go with the quickest route with somebody you know is going to get you there and that’s because they have studied and passed the test for The Knowledge. So after we’re done here today, you will not be prepared to take the test for The Knowledge but you will know a little more about budget reconciliation and that’s really our goal for the day.

My opening, what can I tell you? So budget reconciliation has become a senate shortcut to be able to move things through the senate with 51 votes as opposed to 60 as would normally be the case. Thereby allowing a majority with fewer than 60 members to move issues that otherwise would flounder on the senate floor. There are significant limits to budget reconciliation and we are seeing those limits right now. First of all, most importantly, you still need 51 votes and obviously, Democrats have been running into that issue for the last couple to three weeks. As we sit here right now, we are told this afternoon that Senator Manchin and Senator Sinema are preparing to announce a joint group of issues that they would be able to support in the reconciliation process. Basically their offer to Progressives on how to move forward. We’ll see if that comes about while we’re talking online here, but in addition to the 51 vote limitation, there’s also this nasty little thing called the Byrd rule, named after Senator Byrd from West Virginia, who many of you will remember. That blocks extraneous provisions from being added that do not quote-unquote materially affect revenue
in the budget process. And really that is meant to prevent comprehensive policy legislation or major policy changes in federal law from being enacted through the reconciliation process. So if there’s no budgetary impact or minimal budgetary impact and it is clear that the impact of a provision is mainly in terms of changing policy then, with a point of order raised to the parliamentarian and a decision by the parliamentarian that provision can be stricken from the reconciliation bill pending before the Senate.

So that kind of outlines a little bit of the exercise we’re going through not only on the 51 vote count but on what can be in, what can be out. You saw in the spring when we were doing the American Rescue Plan the most obvious concerns around reconciliation and what would fit under the Byrd rule, what would not from
the perspective of including the minimum wage increase which the parliamentarian, Elizabeth McDonough rejected in the American Rescue Plan as not material affecting revenue. The Byrd rule is broader than that
though and includes a number of other provisions that limit what can and cannot be included and we’re going to go through that as we go along the way here. But did want to make sure you had that underlying course to get started. So with that, I’m going to kick it over to Todd to go through the timeline for what we expect to be going on this fall as we weave through the next few weeks, after the last couple weeks of discussions around reconciliation etc.

Todd Wooten: Perfect thanks rich um before we go through the timeline just a little brief bit about kind of the history of this process and how it came about mainly. Because I really like the Senate process, I really do. I kind of find it fascinating the way that things develop to try and keep some type of control of the body. So this process actually didn’t exist until 1974 and the idea then was that you were going to use reconciliation to help you balance the budget. So as you can see, you start with the budget which Congress has to pass. In 1974 the vision was that you would come back at the end of the year and you would look at that budget and you would say “did we spend too much,“ “did we spend too little?” and you would reconcile it- that’s the name- and it was really that simple. It was about a balanced budget that was in 1974. In 1975 the first attempt was made to stretch the definition and it’s been that way ever since. People have tried to figure out various ways to accomplish their policy goals within this somewhat arcane process. So again, you start with a budget resolution and once you pass that, it has various instructions to all of these committees, or maybe a handful, on what they’re supposed to do whenever they move to the second phase which is what we’re all here to talk about.
In the House you have to actually pass your reconciliation instructions out of committees. That’s the reason why over the last couple of months you saw these various hearings over in the House where they marked up bills, they actually reported them out. You don’t have to don’t have to do that in the Senate and you’re not going to see that with the margins being what they are at 50/50. If senate committees tried to take up and actually pass out things, it’s entirely possible you could have a variety of amendments on anything that they don’t want to do. So over in the Senate, again, you don’t have to do that. So it just goes straight from there. On the House side, you then package it all together in the Budget Committee and it goes to the Rules Committee, which is where the current bill is stuck, for lack of a better term.

Over in the Senate, you just have the budget, so it goes there. Key to note both with the budget and with the reconciliation bill, you know one of my favorite words: you do the vote-a-rama where you can offer virtually any amendment, because you’re dealing with the federal budget. So many good things fit into that basket. Within reconciliation you might be a little bit narrower, but either way you go through this process where you will get a vote on your amendment if you want to. This is kind of crucial as we’re talking about the debt ceiling. You can raise the debt ceiling in reconciliation. One of the last times it was done was actually in 1997 and that was in the Clinton years, and the interesting thing there was it was done where there were two reconciliation bills on one budget, you can do that. There are only three things that you can do, you can either spend money, you can raise money, or you can raise the debt ceiling. You can do those things in three different bills on one budget. So that’s where you see the Republicans and others saying if you want to raise the debt ceiling, you should do it this way. So that’s obviously something that we will see coming up.

After the bills have passed and in their respective bodies, it’s a very traditional process. You would go to a conference committee however, you don’t have to go to a conference committee. What you’re seeing happen right now with the bill that’s kind of stuck in House Rules, that’s in pre-conference. The House and the Senate are trying to work out their differences so you don’t have to do a formal conference committee. That you kind of have it baked before you go forward and then it goes to the President’s desk after both bodies have passed it. Of course the President can veto it. What I was describing earlier in 1975 was Russell Long who was trying to stretch the definition. While the bill was passed, Congress was vetoed by the President. So again whenever you get to the very end, it’s a much more traditional path than obviously in the beginning where you get to take advantage of the 51 votes but you’re subject to all those rules.

Rich: So we wanted to talk a little bit about the proposals under consideration right now in reconciliation that may be tough given the Byrd rule and the requirements you just heard about. So you know we wanted to go through briefly, and these are certainly not all of them, but the major provisions that may face a parliamentarian challenge, most likely by Republicans, if they get to the point of having the support of 51 Democratic Senators. So let me let Todd start off with the Clean Electricity Payment Plan.

Todd: Clean Electricity Payment Plan – this is a major point of contention. I think some folks would say that it’s probably not going to go forward. This would be an effort to make utilities and other folks invest more in renewable energy to lower emissions. A key factor of the current reconciliation bill- the idea is for it to be the most impactful piece of legislation on climate change ever, sadly it’s a relatively low bar. But still, the idea is to have it do a lot. The Clean Electricity Payment Plan, part of that you would pay utilities in part to do better, you would also possibly have penalties. The issue here is whether or not it’s really revenue-based because you really are trying to do policy to affect energy policy, you’re using the revenue measures and so that’s the way that they’ve tried to make it fit the Byrd rule. But there’s an open question it hasn’t been ruled on. So there are some people who think it would fall out if it did go to a verbal challenge but that’s what they’ve been trying to avoid the entire time.

Rich: So that leads me into immigration. I think with immigration we’re sort of in the same territory we were in with the American Rescue Plan and raising the minimum wage – no question that there is some impact on revenue. But the role of the parliamentarian in the process is to determine whether there’s a quote-unquote material effect on revenue and whether that’s the intent of the provision. To that she looks to the debate over the issue the positions of the various parties, and in that debate here pretty clearly, this gives every appearance as much as minimum wage did, of the majority trying to avoid 60 votes knowing that this is really a policy provision of the Democratic Party and not principally about raising revenues in terms of increasing tax revenues from new immigrants etc. So again not anything that has been decided upon, but based on existing precedent it looks like that’s going to be a stretch. And you can kind of see that in the approach Democrats are taking on this, they’re going to push for it because politically they have to push
for it but i think the expectations are low that it will end up in the final bill. Todd to you for labor.

Todd: Now this is where it gets really really wonky – labor provisions and waivers. This applies probably most in the context of tax credits for solar and wind and other technologies. For a long long time there’s been a push that moving to those technologies is going to grow jobs here in the US and it has. However, within the labor community they would say that those jobs have not had the protections that workers should have, they’re not necessarily the wages that they should have. So, as currently envisioned with those tax credits you would have various requirements on prevailing wage or whatever else. The issue again – is that revenue based? That sounds like a policy again to focus on workers, focus on labor issues, etc. it doesn’t sound exactly revenue-based. So because of that, what you’re probably going to see in the bill is basically say you get the credit if you do this you, don’t get the credit if you don’t do that, that’s policy. So instead what they’ll probably do is slice it up, you can get 15% of the credit if you don’t follow these provisions but we’ll give you the other 85% if you do and that gives it enough of a revenue effect that it probably qualifies. However, there are also waivers that are associated with these, if you can’t find the workers, if for whatever reason it would raise the cost too much for the project, then you could get a waiver. Well, that looks a lot like a policy that looks like saying “maybe these things are not as easy as we thought” you show a waiver. So there’s a question as to whether the waivers can actually survive the Byrd rule. So that will be a major point of contention because if those provisions fall out, you’re not going to hit your clinicals so that’s a very very big one which is kind of limiting down the road.

Todd: A final one I think actually is pretty straightforward. Obviously voting rights are on the top of everyone’s mind. There are a number of people who think it’s very important for Dems to do and just to get it done. It is almost certainly purely policy. There’s virtually no way that I can think of, and I think Rich agrees
that you can attach a substantial revenue effect to that, but that said you’re going to see a lot of people who are not necessarily happy about it.

Rich: Yeah and I think the other reason, just to talk about this for a minute here, is to mention the elephant in the room is that for African-American and other minority voters the voting rights legislation along with police reform legislation is a core sort of bar for why they voted for Biden and they are expecting movement in that space. So obviously, with our answer on reconciliation, that leaves only two other literally possible alternatives on moving voting rights or police reform legislation.

One somehow developing compromise legislation that would achieve 60 votes in the Senate. Obviously you are probably aware that police reform legislation has fallen down and negotiations have broken off in that space. The second thing which you hear discussed from time to time is not right yet but it’s sort of out there on the horizon – is do we change the filibuster requirement, which is changeable via Senate rule? Again, working with the parliamentarian to allow a specific narrow exception to the filibuster for civil rights legislation, which is something that members have been talking about for decades now. The civil rights legislation in the 60s took many many years to pass, was difficult, the filibuster was clearly used by white southern senators to keep it from happening until it finally broke through. So that question is out there. Now, we don’t think at the end of the day we’re going to see a change in the filibuster because it would require all Democrats to support it and people like to point at Senator Manchin on that count a lot but there are
a number of other senators with significant concerns about changes to the filibuster of any sort. And as Senator Manchin has said of late, a lot of them are hiding behind him. So while I wouldn’t rule anything out for sure it seems highly unlikely that we’re gonna end up there on something like voting rights or police reform at the end of the day barring something unforeseen happening that we’re not currently aware of.

So that moves us to our next slide. So we have told you all the things that probably are going to be difficult to get into this bill, what does that leave? What is going to be in this bill? And let me just set the table a little bit here. The President’s goal, at the end of the day when he ran, and I think now is to create a bill here following the infrastructure bill that the average person would be able to look at and understand what the government is doing for them in this bill. Too often when we’ve passed these major omnibus bills over the last several decades, the average person looks at it and it’s just big gobbledygook. You can think of the end of the year appropriations process is the best example of that. So that’s really the goal here is and what you see on your screen are real things for real people right? We’re not just talking about arcane government programs that don’t impact individuals in their daily lives. So we’ll start off I’ll kick it to Todd on climate and energy and I’ll handle kids in healthcare.

Todd: Sure. we’ll try and move through. This is what we’re referring to earlier, the major bulk of the spending here would be in various tax credits, incentives for EV’s, potentially what we mentioned earlier the Clean Electricity Performance Plan. One way that people have thought that might be more politically palatable would be to only offer carrots to have no sticks. If you do that, you have to pay a lot of people and that costs money. The bulk though does fall into the tax code. The kind of interesting thing to think about there because this is going to be an issue. The idea within this reconciliation bill was that you would set this up in such a way that you took action within climate and energy that you could meet your 2030 goal as it relates to greenhouse gas emissions. The modeling on that would show you that the tax provisions alone, which again make up the bulk of the spending, probably get 70% of the way there. So something that you’re probably going to hear as this debate goes on is where is that other thirty percent? And that was why the people were talking about that and that’s going to be an issue kind of as they go forward.

Rich: So on the health and life cycle suite, you can see if you add all this up with the permanent expansion extension of the child tax credit or the extension for the life of the reconciliation bill, health care conditions including a number of options with medicare, and then both childcare pre-k and free community college. You are talking about just those life cycle items north of two trillion dollars. Now we didn’t talk a lot about this up
month up front but our expectation, at the end of the day, based on what all the parties are saying at this point is that we’re going to end up somewhere between 1.5 and 2 trillion. So that would obviously leave very little on the table for climate, energy, things, other items that members want to include along the way. So right now the leadership on both sides with the President and the National Economic Council are sorting through how do we either reduce the price of some of these items by ramping up over time or ramping down, as the case may be, only have them go for a period of five years maybe instead of ten years, etc. And some of these items like the child tax credit, policy makers expect to become a permanent part of our tax system. It’s very popular, you probably heard the statistic already that 50% of young children have been lifted out of poverty by the inclusion of the tax credit in the CARES Act in the first place so it’s a very positive policy tool to use in that sense. And so you can kind of take the gambit here that if we only include that item for five years, that a future Congress will almost certainly have to renew it.

Similarly medicare expansion, we’ve obviously never expanded medicare and then contracted it later on. All of those expansions have continued. The things that are looking a little bit more tenuous right now. Free community college is looking like an item that really may be tough given the price, and seems to be sort of losing out in the education battle to child care and pre-k. The other thing that’s not on our list that looks like it may be difficult is affordable housing funding. Again that may be something they try to shovel in at the end of the day at a lower price but it’s a couple hundred billion dollars and it’s going to be very very difficult if we’re scaling back from where we already are. So you can see we’re talking about all of these things, items that the average taxpayer is going to be very well aware of. Some of them skew younger or older, for instance the climate energy piece obviously is going to be very popular with 18 to 30 or 35 year olds, which is an important voting block for Democrats. Health care will be obviously skewing for older seniors and just below seniors. And then obviously with child care and pre-k and the child tax credit, married couples with children. So you can see the effort by Democrats to try and hit the full life cycle here and all interest areas in their party.

Okay so that’s what we’re spending money on, what are we doing to raise money? The plus side of
having decreased the total price of this thing from 1.5 to 2 trillion from 3.5 originally, you have to do less in terms of raising revenue. So I’m going to let Todd walk through these.

Todd: Sure. Again I think these are a lot of things which have been circulating as it relates to the corporate rate. Senator Manchin has said that he can accept 25% going from 21 to 25%. Obviously the 21% rate came about in a different reconciliation bill in 2017 in the Tax Cuts and Jobs Act. But now again you can raise it four points from 21 to 25%, you raise roughly 400 billion dollars, not quite when you cut taxes you lose about 100 billion dollars in revenue. Whenever you raise them, you don’t necessarily get that 100 billion back. There’s an assumption that economic growth is hindered so you don’t get quite the same amount. On the international tax side, obviously in the Tax Cuts and Jobs Act they looked a lot at various measures as it relates to the international taxation of both foreign companies and also domestic companies. There are some folks who certainly want to make changes there, they still feel that we’re still not collecting as much as we should and so they’re looking at that too. Those are your major razors and again, while Senator Manchin can go from 21 to 25%, Senator Sinema has said that she has real concerns and we’ll actually get to what she would do just one more down the road.

Rich, I remember it was you or me who was going to talk about the increase in the top individual rate. I’m happy to. Any time I can talk about people’s taxes going up, as a Democrat, I get really excited. I’m totally joking. So the increase in the top individual rate. Again, this would take it from 36 percent which is in the Tax Cuts and Jobs Act to, I believe 39.6% which is what it was at before. This is part of what folks have campaigned on, talking about the people at the top end of the income bracket pay their fair share so this would be a way to do that. Same thing with cap gains, again what you’re typically looking at there are folks with the means to invest in various things and there are people who have been wanting to raise cap gains rate for a while. Those are relatively significant razors; they’re almost in the realm of the corporate rate, again some of it depends on what you do as it relates to cap gains in particular. Your real issue is kind of how you start it. You could go retroactive. You could say “hey we’ve been talking about raising uh cap gain’s rate for a year you should have known that you can unwind any deal that you have in a year so let’s make it retroactive.” People will hate that, and I don’t think that’s what they will do, but you can. But your issue is if
you say we’re going to raise the cap gains rate on January 1, 2022, then obviously there will be a rush of people who will be trying to take advantage of the current rate then, so you end up skewing what’s going
on in the market.

That leads to the third one, and again, this is where Senator Sinema has said. She said she doesn’t like raising the top rate for anyone for either corporations or on the other side but she is interested in compliance. Compliance is the amount of taxes that we are actually owed compared to the amount of taxes that we actually collect. This is where, I believe it’s 40 billion for enforcement at the IRS. The belief among some is that it would get you back like 400 billion. It’s about collecting taxes that we are already owed. The tax gap –
The other thing that Senator Sinema has thrown out there and is causing a lot of consternation is an idea of a minimum corporate tax or a book tax. What this would do is it would look at basically saying if you’re a
corporation you should owe this amount of money and through skillful tax planning or deductions or whatever else you’re lowering that tax burden again you see these things quite frequently, where they say that GE or various corporation x doesn’t pay taxes, that’s through tax planning. They are paying
taxes but through deductions and whatever else, they’re minimizing it. What Senator Sinema has said that she might favor again, would be something that would take away those deductions and you would go to a tax which is just a straight minimum. In her view, that’s compliance and so while people have been frustrated with her, I think throughout this process, it is thoughtful. I think corporations would scream. Most of our clients definitely do not want to do a corporate minimum tax, they don’t want to kind of lose the ability to
do some very creative tax planning, but it is but it is a thing which is out there and that brings us to the last
one which I certainly can let Rich speak to on healthcare and prescription drugs.

Rich: Sure so obviously prescription drug prices have been a problem for a long period of time. This is actually a good example of where we start to see some split between Senator Manchin and Senator Sinema. Senator Sinema has real concerns about this as a raiser and it’s being scaled back in real time. I think as we’re talking here from originally allowing medicare to sort of negotiate drug prices on a pretty broad group of drugs to narrowing that group of drugs and limiting the ability of the government in order to negotiate. So this is an idea that’s been out there for a long time and sometimes it’s had some degree of bipartisan support, but obviously the drug industry is a pretty powerful interest group in Congress and people are very concerned any time the government gets involved in a private market and starts putting price controls on as everybody harkens back to the 1970s and runaway inflation. So we expect that’s going to be on the borderline about whether it can make it across the finish line, no problems with the Byrd rule, but just literally the 51 vote thing and in this case Senator Sinema in particular.

So I think that is the end of your 30 minute budget intro. I have heard budget reconciliation done in in 20
minutes probably better than we just did but this is really an area that you could take a full semester college course on. It is it is very arcane, we did the best we could in a quick period of time but it’s also an area that
frankly it is best to be talked about in conversation with questions so please feel free to insert a question into the chat or Patrick we’ll hand it back to you and let you kind of quarterback here.

Patrick: Perfect yeah, we have one question here which is what do we know about the parliamentarian Elizabeth McDonough?

Todd: It was a little funny for me to get to do this because I really like this topic but candidly, I think I lost the last three times that I went before the parliamentarian as I was leaving the Hill. She’s amazing, I mean she’s very fair, loves her job, and is one of the rare people I would say who is respected by both sides on the Hill. The way that you don’t necessarily bring up an objection to one of these provisions on the floor without knowing what’s gonna happen and so that process is called The Byrd Bath. That’s kind of what they’re doing right now where they go back and forth with her and her staff and they say “well if we did it this way i would you have a problem?” and they said “well i don’t know you might have a problem because..” and you get a sense through that if you raise the objection whether or not it would actually pass. But she one
of the few people on Capitol Hill who is respected by just about everybody, not entirely everybody, but
about as close as you’re gonna get in politics.

Patrick: So going off of that we have another question here which is, I realize it’s far from likely but given how partisan things are, is there a world where you see VPOTUS overruling the advice of the parliamentarian?

Rich: I don’t think we’re gonna get there at the end of the day because – I’m trying to think on all the issues we went through. I don’t think there’s an issue that rises to the high level of gravity that would be overruling the parliamentarian,changing the rules, that will get through, in the first instance the political screen of having Senator Manchin and Senator Sinema both supporting it. So from a very practical perspective I
don’t see that happening, not because there won’t be people itching to make it happen but because Ii think those issues are the ones on our slide about things that may get challenged along the way than the Byrd rule, like the the Clean Electricity Plan that just may not ever get there because Senator Manchin may
not be able to support it and therefore it’s not going to be part of the package as it goes to the floor
but Todd, I don’t know if you can think of anything I’m missing?

Todd: No I mean you just have to remember how that process would work, right? Someone would raise the point of order, the parliamentarian would sustain it or she doesn’t, and then you have to vote on overruling so again to reach this point, you probably lose Sinema and Manchin. And you have to remember with Manchin this is Robert Byrd, and the way the Byrd Rule came about was, as I was talking earlier, in 1974 you started this process in 1975 you’re already abusing it and it really ramped up in the early years of Reagan. And so it was Byrd who said in 1983 “this is crazy I mean this is not why we passed that law in 1974. You guys are doing all this stuff and all this policy because you couldn’t do it otherwise,” and so it would be a big deal for Manchin to throw out the Byrd rule, I mean it’s a pretty significant thing from a legend within his home state.

Patrick: Another question here which is – curious your best guess on when the budget could be approved?

Rich: You expect it to be before the end of the year, so I think that we basically are somewhere between a 50 and a 60% chance of having it done by Christmas, and the interesting thing about that is, Ithink the odds are much higher that we get done by Thanksgiving. If we go past Thanksgiving I think the odds probably flip and the odds then at that point are greater that we’ve run into some roadblocks along the way that push us into 2022. Todd and I are both working on a bunch of provisions here, you definitely have the sense that these guys are in the hurry up offense now and trying to move through issues. They will either be successful on that and we’re going to get something done between Veterans Day and Thanksgiving or they won’t and if and if they’re not, I’m not sure the two and a half or whatever three weeks post-Thanksgiving is going to be enough for us to get there. So I do think there’s a chance we go into Q1. Everybody needs to remember that the Affordable Care Act was the end of the first quarter of 2010 so you know we’re by no means late on this or anything like that. Yet I will tell you that there’s a direct correlation and it’s a negative correlation between the amount of time these packages take and their popularity immediately after they pass. Why does that matter, you’re asking? Because Democrats have to hold the House and hold the Senate next year theoretically and if we do go into the end of the first quarter or whatever,just like in-laws and fish that’s
been hanging around for a while this thing is not going to smell too great.

Patrick: That’s good. Speaking of which, what other obstruction maneuvers can a minority leader potentially throw at Democratic senators?

Todd: Well I mean at this point there’s not much really that’s left. Whenever you bring back the full bill, I
suppose you’re going to do, well no actually you won’t do a vote-a-rama I don’t think, so at this point there’s not much but of course, the issue isn’t really with the minority leader at the moment, the issue is within the Democratic Caucus itself. But in terms of procedurally, there’s not a lot because that was the way that this was designed was to be able to move through

Rich: Yeah I would just remind people of one thing which is pretty critical in all this at the end of the day because we’re seeing the internal fighting among members of the Democratic party between progressives and moderates right? Now but keep in mind one thing at the end of the day,Senator Manchin and Senator Sinema are both up for re-election in 2024 and, whether they like it or don’t, on any given day their political futures are in some way shape or form tied to the President’s agenda being successful, so that’s that’s going to mitigate towards Democrats at the end of the day pulling together and hanging together so McConnell’s doing what he can, but at the end of the day the the power here really rests within the democratic
party ,if they hold together. I think the fact that both those senators stand for reelection, when they do mitigate towards coming up with a package that everybody will support

Patrick: How does the debt feeling negotiation play into this and what does the Democratic majority plan to offer Republicans to have a chance to pass reconciliation?

Rich: So as I just said I don’t think they really need Republicans and they’re not going to get any to pass reconciliation. How the debt ceiling plays into this, in December will be very interesting to watch. So obviously we just kicked the can down the road as Todd told you up front you can include the debt limit in reconciliation as we move forward but that takes time and effort to go back and pass another bill with the debt limit in it. A lot of Democrats are resistant to taking that approach and we really don’t have a very clear pathway for how we’re going to get there at this point. You know there has been all sorts of talk including Todd’s favorite resolution of the issue, printing the trillion dollar coin but, I think the Treasury Secretary has kind of poo poo’d.

Todd: But that is a whole separate wonk conversation is the coin and I will absolutely do it but so the thing to know is as I was saying earlier. You can do multiple reconciliation bills on one budget, so what you would do is you would pass a budget, with regulation instructions that would get you to a vote-a-rama and you have Republicans saying that they wouldn’t use all the time if it was if it was just for debt ceiling so
you could go through it in some type of compressed path, but in some type of compressed fashion but that’s what you’d have to do. That chart at the very beginning within the timeline, you’d have to go back through that. Funny enough , as we were doing this today, and I knew this would come up, the first time I heard about the debt ceiling was in 2003 when I was a very junior staffer and I was asking my boss, “So what are we doing today?” and she says “oh yeah we’re voting on the debt ceiling.” I was like “what’s that? Yeah that sounds kind of scary.” And it was like “oh well you know whenever we run up against our spending and our credit limit we have to raise it.” and I said “oh my gosh, you mean that’s gonna pass?” And it was like “oh yeah it’s gonna pass.” So I went back and looked, it passed 53-44 that day. Voting against it was Joe Biden and every other Democrat with the exception of Zell Miller so, kind of an interesting thing to kind of think about within this debate is that obviously the debt ceiling has been a thing it was never ever in doubt but that doesn’t necessarily mean that the other party voted for it whenever they have to. So yeah.

Rich: I have described the debt ceiling and I should disclose up front that I am a deadhead with more than 200 shows under my belt but it’s kind of like going to a Grateful Dead concert. You know where you’re going to end up at the end you just have no idea how you’re going to get there. And the other analogy I will use here,as folks who know me know I worship at the ground of of Mel Brooks and in particular “Blazing Saddles” and the debt limit, I can’t think of a thing that’s more stupid that Congress has ever done
than creating the debt limit. It literally is like Cleavon Little, the sheriff in “Blazing Saddles,” putting the
gun to his head and you know saying “don’t approach or i’ll shoot myself” it’s the same deal it’s like what was congress thinking that somehow this was going to be a good thing? It has not stopped, obviously, the
growing of the national debt it has nothing to do with keeping the deficit from increasing. It is basically just a political baseball bat that the parties literally hand back and forth like the Bugs Bunny cartoons and just beat each other over the head with.

Patrick: So far we’ve covered the London taxi system, Looney Tunes, and The Grateful Dead, and so I think with that we’ll call it a panel. Thank you so much Rich and Todd for joining us and thank you
everybody um at home or at work for joining us over the past week.