The Reconciliation Process: Reconciling or Tearing the Nation Apart

by Hal Gershowitz and Stephen Porter on March 8, 2010

Washington is abuzz these days with talk of “reconciliation” a word in our usual lexicon that suggests bringing people together. In this case, however, it is a larceny of language. It is divisive and not conciliatory and it is, understandably, creating anguish and outrage among those who understand the subterfuge at play here. Political mischief is about to run amok as this corruption of Senate rules becomes the strategic center piece President Obama and the Democratic majority in Congress will utilize to ram their health care bill into law.

To be sure, the reconciliation process has been used a number of times during the past thirty years, usually without much angst or controversy. It has, essentially, been used in the past to remove legislative stumbling blocks to initiatives with fairly strong bi-partisan support. American tradition as well as old-fashioned common sense has generally dictated that consequential legislation enjoy broad bipartisan consensus and, in fact, the most ambitious reconciliation bills of the past have been, more often than not, popular on both sides of the aisle. In these cases, reconciliation was used for procedural reasons, not to force through a bill that couldn’t get 60 votes. It has, however, never been used to advance legislation that a substantial majority of Americans have said they do not want. Nor should it be.

It was one of the wisest and most respected of Democrats, the late Senator Daniel Patrick Moynihan, who warned his colleagues, “Never pass major legislation that affects most Americans without real bipartisan support. It opens the door to all kinds of political trouble.” It appears that the Administration and the congressional Democrats are, indeed, going to open the door to all kinds of political trouble. To paraphrase Professor Harold Hill who once bellowed in the musical comedy Music Man, “There’s trouble right (there) in River City”…the river now being the Potomac and the city being our nation’s capital, Washington, D.C.

To better understand this, we need to take a quick look at the rules of the United States Senate. Back in 1789 both the House and Senate allowed debate to be ended and a vote taken upon the vote of a simple majority when the question was called. That changed during the Jefferson Administration in 1804 when the Senate dropped the rule opting instead for unlimited debate, a practice that in one form or another has been used in other western democracies. This non-stop talkathon is known as a filibuster. The actual filibuster is no longer required. The declared intent to use it is enough under current Senate rules to stop the advance of contentious legislation.

We can always expect sanctimonious protests from either side of the aisle that “a few are thwarting the will of the majority,” when the proponents of contentious legislation are stymied by the 60-vote rule. In practice, however, the opposite is often true. For instance, what is being stymied by the threat of a filibuster in the current health care debate is an extreme makeover of a major segment of our economy that most Americans have said, repeatedly, they do not want.

In 1917 President Wilson, angry about Congress’ failure to vote on certain war measures, convinced the Senate to adopt a rule cutting off debate by a two-thirds vote. In 1975 the required vote was reduced to three-fifths or sixty percent.

Nevertheless, even with a reduction to a three-fifths vote the Senate also adopted a new process intended to allow consideration of contentious budget bills by a mere majority pursuant to reconciliation instructions in a budget resolution. The process was further refined by adoption of a rule in 1985 (the so-called Byrd Rule) that explains what kind of fiscal bill is subject to reconciliation. Since that time both parties have invoked the reconciliation process over 20 times, but never on anything resembling such a massive change in the relationship between government and private citizens and never without even a modicum of bipartisan support.

Senator Byrd, considered by many to be the dean of parliamentary law and the man who penned the Byrd rule mentioned above, stated in a written opinion at the outset of the healthcare debate, “I oppose using the budget reconciliation process to pass health care reform and climate change legislation. Such a proposal would violate the intent and spirit of the budget process, and do serious injury to the Constitutional role of the Senate.”

Rule changes often push the envelope and test the limits of legislative propriety. In the case of the reconciliation process, who advocates its use depends on whose ox is being gored. Back in 2005 when President Bush’s judicial nominees were being filibustered, making a mockery of the “advise and consent” process, the frustrated GOP majority threatened to invoke reconciliation to get up or down votes on the nominees, a threat which the Democrats named “the nuclear option.” Ironically, the very same Democrats who were so outraged by the Republican threat to use the reconciliation process to allow an up or down vote on judicial nominees now refer to its use as “nothing extraordinary.”

Then Senator Obama said “he [President Bush] hasn’t gotten his way and that is now prompting a change in the Senate rules that really, I think, would change the character of the Senate forever and what I worry about is that you essentially have … two chambers … but you have…absolute power on either side and that’s not what the Founders intended.” No, it certainly wasn’t what the Founders intended, but it does seem to be what President Obama intends now that he is in the White House and not merely in the Senate.

Now comes current Majority Leader Harry Reid, the poster-boy for hypocrisy, who noted back then “the right to extend a debate is never more important than when one party controls both Congress and the White House. The filibuster serves as a check on power [to] preserve our limited government.” Perhaps, someone should remind Senator Reid that limitation on government is particularly important when the people are sending clear messages that they are strongly opposed to what the Congress is doing.

Current Secretary of State, but then Senator, Clinton then called on her GOP colleagues to go to Bush and tell him reconciliation is “a bridge too far” that “you have to restrain yourself Mr. President.” Senator Charles Schumer then spoke of using reconciliation as bringing us to “the precipice of a constitutional crisis” saying to the majority that if “you didn’t get your way 100% of the time [it is like] throwing a temper tantrum.” However, in 2005, a bipartisan group of senators avoided testing the limits of reconciliation by agreeing to an up or down vote on several of the nominees and the issue died down.

Backing away from the brink on health care may prove more difficult. The better part of a year has been devoted to what is seen as President Obama’s signature issue. Moreover, in 2008, the Democrats were handed, by recent historical standards, very significant majorities in Congress. They interpreted this not as a rejection of the exorbitant spending during the Bush Administration or weariness with an unpopular war, but as a mandate to make unprecedented changes to enlarge the role of government in our lives. Then candidate Obama boasted, “We are going to fundamentally transform America.” With regard to health care, the President and the Democratic Congress now propose to take over more than 17% of our economy just at a time when the public has become far more attuned to the enormous danger the country faces as a result of our ever-growing budget deficits and our gargantuan national debt.

Moreover, public opinion polls in the last year, along with several off-year elections, town hall meetings and the growing anti-incumbent sentiment make it clear that the American public does not want the 2,700-page bill now before Congress. In the face of this evidence, however, and because of the election of Scott Brown to the Senate, thereby denying the Democrats a veto proof majority, the majority party proposes to undo over 200 years of Senate procedure to narrowly enact into law a 2.5 trillion dollar measure. It is a proposal of no less importance or long lasting implications to our society than the enactment of Social Security and Medicare…. and it is being pushed down the throats of the American People under the entreaties of the same Democratic politicians who in 2005 railed against expansion of the reconciliation procedure on an issue nowhere near as far reaching. Is it any wonder, Americans have lost faith in their elected leaders?

Leave aside the merits, or lack thereof, of the health care legislation. The use of reconciliation to pass a bill of such magnitude and over the objections of most Americans represents what may be the greatest display of arrogance by Congress in American history. It shows a complete disregard for the Senate’s own rules whenever it suits them. If this process is used, can anyone give us an example of any legislation when it would be improper? Actually, come to think of it we can: whenever Harry Reid, Nancy Pelosi or Barack Obama find it to their partisan advantage. Does anyone see a resemblance, however, faint it might still be, to Hugo Chavez’s brand of democracy? .

To add insult to injury, if the Democrats use reconciliation to advance their health care bill they would also have to engage in other legislative chicanery. The Senate, it seems, would have to pass a new and separate bill containing only amendments to its original bill in order to satisfy the House, which opposes the Senate bill as it stands. The House would then have to pass the Senate amendment bill and send that bill to the president for signature. Then the House would have to pass the first Senate bill and send it to the president for signature. The president would then have to sign the separate amendment into law first and then sign the original bill, in effect enacting into law an amendment to a law that did not yet officially exist. This sleight of hand would cross the eyes of any legitimate parliamentarian. Of course if the Senate Parliamentarian nixes the procedure, Vice President Biden, as the presiding officer of the Senate, can over-rule the Parliamentarian and the proverbial fix would be in.

We would argue that the elites of the liberal left believe they are smarter than everyone else and that the rest of the public simply won’t notice their perversion of acceptable procedure. But, the public does notice and it resents being steamrolled and taken for fools. The entire country ultimately sees and takes into account all the abuses of power that a tyrannical majority tries to get away with no matter who is in power.

Thus, the importance of this arcane little rule may have far more profound consequences than jamming a terrible and unpopular health care bill into law as bad and costly as that may be to the nation. What may very well be far worse is the price we pay in the loss of respect Americans have for their government. For more than two centuries this American experiment has endured, and indeed, strengthened in times of crisis because we trust its basic premise that it is founded on the rule of law. When that trust is stretched to the breaking point, we risk the emergence of even more fringe groups, conspiracy theorists, dangerous demagogues and the emergence of a segment of the population that simply will justify the evasion of what they perceive to be unjust law. Our system, at its core, depends upon the trust of the people. Loss of that trust would free a genie we may never be able to get back in the bottle.

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Feeding the Deficit: The Ultimate Obesity

by Hal Gershowitz and Stephen Porter on March 1, 2010

Controlling obesity is all the rage now in America as, indeed, it should be. Feeding the American appetite with too many of the wrong kinds of calories is exacting a terrible toll on the health of Americans of all ages. Obesity, like cigarettes, kills. In recent years, Congress, along with a compliant President Bush and now with an enthusiastic President Obama, has been appeasing another kind of appetite with reckless abandon. The toll this fiscal obesity will exact from America and our people is incalculable and Jenny Craig will be of no help.

Clearly, most Americans do not want to be force fed programs they haven’t asked for and that they know neither they, their children nor their grandchildren can possibly afford. People throughout the country are beginning to dig in their heels and a growing number of congressmen and senators know it. Seventy years ago, Japanese Admiral Isoroku Yamamoto is quoted, following his successful and deadly attack on Pearl Harbor, “I fear all we have done is to awaken a sleeping giant and fill him with a terrible resolve.” It appears that the American electorate, long apathetic and used to acquiescing by default to reckless government spending may be awakening from its long slumber. Let’s hope so, for it is the last best hope we have to rein in the destructive behavior of so many of our elected representatives of both parties in Washington and the White House strategists who lead them on.

As we noted in this column two weeks ago, Moody’s has fired the first warning shot over the bow of our ship of state. The international credit-rating agency warned that America’s AAA credit rating would be in jeopardy (given our spiraling debt) if economic growth does not keep pace with the projections made by the Obama Administration. China and Japan, our largest sovereign creditors, fired two more warning shots at last week’s treasury auction when they decreased their purchases of U.S. debt. But is anyone in Washington listening?

Let us stipulate that our concern is not that America is in danger of defaulting on its ever-mounting debt as Greece and, perhaps, Spain, Italy, Ireland and Portugal might very well be. We will always pay our bills: even if we have to print the money with which to meet our obligations when they come due. Should our creditors here in America and those abroad, however, begin to worry that they will be paid back with dollars that are worth a lot less than the dollars they loaned us, they will demand a higher rate of interest to offset that risk. If our creditors, to whom we are more beholden than ever before, were to decide they want a substantially higher rate of return on their money than we currently pay (approximately 3.6% for 10 year maturities and 4.6% for 30 year maturities) every segment of our society could be drastically affected.

Of equal if not greater concern, however, is that the dollar’s continued position as the world’s reserve currency is no longer certain. As our deficit widens and our debt grows nations on whom we depend are beginning to explore alternatives to the dollar as the world’s reserve currency. This should be causing many sleepless nights for those in Washington who are responsible for the health of our economy. The loss of the dollar as the world’s reserve currency would not merely be a loss of prestige. Such an occurrence would cause the dollar’s purchasing power to plunge and affect the standard of living of nearly everyone. A reserve currency is the currency nearly all nations hold in order to transact all international business (such as for commodities) that are priced in the reserve currency of the day. Think oil, gold, copper, etc. In many instances it is the currency nations use to settle their debts as well, and it is also the currency nation’s hold for the proverbial rainy day. A transfer of the world’s reserve currency status from the dollar to, say, the Chinese renminbi would cause a run on the dollar as sovereigns began trading their collective trillions in dollars for renminbis. Loss of reserve currency status could represent a crisis of unimaginable proportions causing a sudden and precipitous drop in the value of the dollar. Far fetched? No, not at all. In fact, there is a serious move among a number of nations, including China, which during this century will become the world’s largest economy, to begin preparing for such a development. Nations on whom we depend for trade, loans and investment are eyeing developments in Washington with alarm. Again, we ask, is anyone in Washington listening?

While few people can really predict when and if such an adverse event might occur, there is no question that the odds go up as our national indebtedness goes up. And it is going up exponentially.

Our total debt is now as large as our entire economy, if we include what we owe here in America (to domestic holders of treasury obligations) and what we owe to China, Japan, the Saudis and an assortment of oil-supported sheikdoms and other smaller foreign creditors as well as what we owe to our own Social Security and Medicare trust funds and our collective state and municipal obligations. Greece, the basket case of Europe, has total debt of 108% of its economy. Our total debt stands at just a fraction under 100% (98.2% to be exact) of our entire economy ($14 trillion of total debt vs. $14.25 trillion of total economic output. While we suppose we can always cancel some (or all) of that portion of our debt that is the result of what our government has borrowed from the so-called Social Security and Medicare trust funds, this is not a pretty picture.

Carmen Reinhart and Kenneth Rogoff, economists at the University of Maryland and Harvard, respectively, in their recent book with the tongue-in-cheek title, “This Time is Different: A Panoramic view of Eight Centuries of Financial Crises,” sound an ominous alarm. They note that every time an economy begins precipitously to run up debt, various, so-called, experts are always there to provide comforting advice that “things are different” and we needn’t be concerned about the debt “this time.” The authors then go on to demonstrate, convincingly we think, that this invariably has been, and continues to be, just plain wrong. They found that, even in a developed economy, once public debt reaches 90 percent of economic output, it begins seriously to stifle economic growth. While we make no pretense of being qualified to attest to the findings of these accomplished economists, we get little comfort from the reassurances of the Obama Administration’s economists that, “this time it’s different.” We fear that it is not. We are spending with abandon and exaggerating (outrageously, we think) what this spending is accomplishing. “Hail Mary” passes rarely work in football and certainly never work as economic policy.

We have now spent (or committed to spend) nearly a trillion dollars to “stimulate” the economy (exclusive of the TARP bailouts and new stimulus proposals) and all we really have to show for it is the fastest increase in our deficit in history. Claims of jobs saved are fatuous. How do we even begin to assess the cost of a trillion dollars being vacuumed out of the capital markets by the government instead of being available for private investment and job creation in the private sector?

Harvard economics professor Robert Barro, writing in the Wall Street Journal last week took serious issue with Christina Romer’s (Chair of President Obama’s Council of Economic Advisors) estimates of the multiplier effect of government stimulus dollars. Professor Barro’s analysis indicates that, over five years, the President’s stimulus package trades $600 billion of public spending for $900 billion of private expenditure. It is, he notes, a bad deal.

Given that 77% of the stimulus money was still sitting in Washington at the end of last year, the notion that the stimulus program was putting people to work (net of jobs that otherwise would emerge in the private sector) in any significant way was patently absurd. As Democratic Senator Evan Bayh, one of the more respected and analytical members of the Senate, said when announcing his decision not to seek re-election, “if I could create one new job by working in the private sector, that would be one more job than Congress has created in the past six months.” Notice how no one mentions, “shovel-ready jobs” anymore. It was an empty sales line a year ago, and it’s an empty sales line now. But this time everyone knows it. We know that roughly 50% of the stimulus money will be directed to existing government agencies such as Health and Human Services and the Department of Education. Again, a tremendous increase in spending to existing government agencies disguised as economic stimulus. Worse yet this added spending will become the baseline for future budgeting.

It would be wrong and unfair to lay this gathering storm at the feet of President Obama. The storm clouds began gathering long before President Obama became president, indeed, long before President Obama was even old enough to vote. But President Obama came to office promising change and has governed, instead, by greatly compounding the errors of his immediate predecessor and most other democratic and republican administrations of recent decades.

It would take a courageous and masterful leader and a magical moment to say to the American people, “the government has made entitlement promises to you that we can’t keep…that we can’t afford, and that we can’t place on the shoulders of our children. We’re going to have to establish a “means test” for Social Security and Medicare and even the age at which our people will be eligible to begin receiving benefits. We’re also going to have to eliminate hundreds, maybe thousands, of programs that are wasteful or redundant or that we can do without. Henceforth, there can be no programs that are ‘untouchable.’”

It seems we will have to wait for such a leader and such a magical moment. We can only hope he or she arrives in time.

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The Intelligent Use of Power: American Security in the 21st Century

February 22, 2010

In the mainstream media, political observers, reporters and politicians who write about foreign policy generally analyze specific current events and often neglect to place those events within the long term historical context which preceded them. Henry Kissinger, in his book, “Does America Need A Foreign Policy…Toward a Diplomacy for the 21st Century,” Simon and Schuster, [...]

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Democratic Party Policies: Regressive not Progressive

February 15, 2010

Democrats have now packaged their agenda and the policies that it includes under the term “progressive” to obscure the liberal label, hoping by this camouflage to make their programs more acceptable to the American people. As with most fictitious names this one is designed to obscure reality. True, “progressive” could describe [...]

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The State of the Union Address: “…Meat to Distract the Watchdog of the Mind”

February 8, 2010

Quote in headline: Marshall McLuhan – “Understanding Media,” 1964
On January 27, President Obama, following long tradition, delivered to a joint session of Congress and the American people his constitutionally mandated report on the state of the union. This report, over time, has become less of a report on the nation’s health than a self congratulatory [...]

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The First Amendment and Corporations: ——— The Supreme Court Speaks Again

February 1, 2010

“Congress shall make no law … abridging the freedom of speech or of the press; or the right of the people peacefully to assemble and to petition the Government for a redress of grievance” (First Amendment to the Constitution of the United States).
Those seemingly clear words were not in the U.S. Constitution when it was [...]

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Year One: Long on Audacity, Short on Hope

January 25, 2010

The first year of the Obama Administration has not been a very good year for the country. Frequent Flyer Miles aside, the new Administration has been very short on achievement since that cold, crisp winter day one year ago when Barack Obama, newly elected 44th President of the United States, addressed the nation, indeed, the [...]

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Terrorism, Security and the Resurgence of a Deadly Tenet of Radical Islam… Jihad

January 18, 2010

No Mr. President, it was more than just a security “screw-up” from a single isolated incident. Rather it was part of a continuum deriving from a failure to understand the historical context of the dangerous and continuing struggle in which we are engaged. To be sure there were a series of security blunders, what the [...]

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“We Are…Fundamentally Transforming America” — and He Means It!

January 11, 2010

Pardon the space-saving ellipses (…) in the headline above. What President-elect Obama actually said the week before the 2008 election was, “We are five days away from fundamentally transforming America. And as noted above, he meant it, and, as his actions have shown since he assumed office, he intends to do just that; [...]

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US-Iran Foreign Policy: Fifty-Six Years Of Getting It Wrong

January 4, 2010

Our current conflict with Iran began thirty years ago on November 4th, 1979 when so-called Iranian “students” stormed the American Embassy in Tehran and took 66 American diplomats hostage. Since the Iranian revolution that brought Ayatollah Khomeini back to Iran as the supreme spiritual leader was only eight months old, there was initially some [...]

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