[Congressional Record (Bound Edition), Volume 147 (2001), Part 2]
[Senate]
[Pages 2876-2881]
[From the U.S. Government Publishing Office, www.gpo.gov]



                  RECONCILIATION AND DEFICIT REDUCTION

  Mr. HOLLINGS. Mr. President, yesterday I introduced Senate Concurrent 
Resolution 20, a budget resolution for fiscal year 2002 that stays the 
course with an emphasis on paying down the national debt. The 
resolution creates two reserve funds for tax reduction, one if the CBO 
reports the economy is in a recession and the other if CBO determines 
we have a true surplus. The resolution does not contain any 
instructions to committees with regard to reconciliation.
  There has been a great deal of speculation, fueled by statements made 
by the Senate Republican Leadership, that the reconciliation process 
established in the Congressional Budget Act of 1974, would be used to 
enact the massive $1.6 trillion tax cut proposed by the President. This 
is an abuse of the budget process and contrary to the original purpose 
of the Act which was to establish fiscal discipline within the Congress 
when it made decisions regarding spending and tax matters. I am the 
only original member of the Senate Budget Committee and have served on 
the Committee since its inception in 1974. In fact, I chaired the 
Senate Budget Committee in 1980 and managed the first reconciliation 
bill with Senator Domenici, then the ranking minority member.
  It disturbs me to see how the reconciliation process, designed to 
reduce the debt, is now being used to rush a huge tax cut through the 
Congress with limited debate and little if any opportunity to amend. An 
examination of the legislative history surrounding passage of the 1974 
Act makes it clear that the new reconciliation process was intended to 
expedite consideration of legislation that only reduced spending or 
increased revenues in order to eliminate annual budget deficits. This 
view was supported by over two decades of practice in which Congress 
used the Act to improve the fiscal health of the federal budget. If 
Congress insists on enacting a massive tax cut, it should consider that 
bill in the normal course, not through the reconciliation process which 
makes a mockery of the Congressional Budget Act and its intended 
purpose. I ask unanimous consent to have printed in the Record a 
legislative history of the Congressional Budget Act of 1974 and a 
history of the use of the Senate reconciliation process.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

    Arguments Against the Use of Reconciliation to Consider Tax Cut 
                              Legislation


                                summary

       I. The legislative history of the Congressional Budget Act 
     of 1974 makes clear that the newly created reconciliation 
     process was only intended to expedite consideration of 
     legislation that reduced spending or increased taxes in order 
     to eliminate annual budget deficits.
       II. The authors of Congressional Budget Act of 1974 
     attempted to create a comprehensive new framework to improve 
     fiscal discipline with minimum disruption to established 
     Senate procedure and practice.
       III. The provisions of the Congressional Budget Act of 1974 
     that provide expedited procedures to consider the budget 
     resolution and reconciliation bills have always been 
     construed strictly because they severely restrict the 
     prerogatives of individual Senators.
       IV. The Congressional Budget Act of 1974 has been amended 
     numerous times to provide Congress the tools to improve 
     fiscal discipline and over two decades of practice make clear 
     that the reconciliation process has been used to reduce 
     deficits.
       V. The use of the reconciliation process to enact a massive 
     tax reduction bill, absent

[[Page 2877]]

     any effort to reduce the deficit, is inconsistent with the 
     legislative history of the Congressional Budget Act of 1974, 
     contrary to over two decades of practice and undermines the 
     most important traditions of the Senate.
                                  ____


      Legislative History of the Congressional Budget Act of 1974

       The contentious battles with the Nixon White House over the 
     control of spending in 1973 and the chronic budget deficits 
     that occurred in 25 of the previous 32 years convinced the 
     Congress that it needed to establish it's own budget process. 
     The Congress enacted the Congressional Budget Act of 1974, 
     which was considered landmark legislation and the first 
     attempt at major reform of the budget process since 1921. 
     Through this effort the Congress sought to increase fiscal 
     discipline by creating an overall budget process that would 
     enable it to control federal spending and insure federal 
     revenues were sufficient to pay for the operation of the 
     government. The budget reconciliation process was an optional 
     procedure, established under the 1974 Act. From it's 
     inception, the reconciliation process was to facilitate 
     consideration of legislation late in the fiscal year to 
     eliminate projected deficits by changing current law to lower 
     federal spending or to increase federal revenues in 
     conformance with the spending ceiling and revenue floor 
     established in the annual budget resolution.
       Any analysis of the reconciliation process must be done in 
     the context of the crisis the Congress faced in 1973 and the 
     legislative history surrounding passage of the bill. The 
     national debt had grown from approximately $1 billion at the 
     turn of the century to almost $500 billion by 1973. The 
     Congress was confronted by a President using his impoundment 
     authority as a budget cutting device and to assert his own 
     priorities on spending. In a message to Congress on July 26, 
     1973, President Nixon requested the enactment of a $250 
     billion ceiling on fiscal 1973 expenditures. The request was 
     renewed later in the year in conjunction with legislation to 
     raise the temporary debt limit. Congress rejected the 
     proposed spending ceiling because it would have surrendered 
     to the President its constitutional responsibility to 
     determine national spending. However, Congress recognized the 
     need for permanent spending control procedures and in Section 
     301(b) of Public Law 92-599 it established a joint committee 
     to review--

     * * * the procedures which should be adopted by the Congress 
     for the purpose of improving congressional control of the 
     budgetary outlay and receipt totals, including procedures for 
     establishing and maintaining an overall view of each year's 
     budgetary outlays which is fully coordinated with an overall 
     view of anticipated revenues for that year.
       From the beginning there was concern that any new budget 
     process not impede the traditional role of the committees 
     that had jurisdiction over these matters nor dramatically 
     change the way each house of Congress conducted it's 
     business. Consequently, 28 of the 32 members of the Joint 
     Study committee came from the committees on Finance, Ways and 
     Means and from the Appropriations Committee of both houses. 
     The Joint Committees issued a final report on April 18, 1973 
     which was the starting point for the Senate Committee on 
     Governmental Operations and the House Rules Committee in 
     their work on the 1974 Act.
       The sixteen members of the House that participated in the 
     Joint Study Committee introduced H.R. 7130, the Budget 
     Control Act of 1973, on April 18, 1973. The bill contained a 
     simple reconciliation process and authorized a year end tax 
     surcharge bill to increase taxes if the actual deficit was 
     greater than projected or the actual surplus for that fiscal 
     year was less than projected. The legislation provided for a 
     narrowly targeted tax bill that would increase revenues 
     sufficient to bring them in line with spending. H.R. 7130 was 
     reported by the House Rules Committee on November 20, 1973 
     with a substitute amendment which modified the section on tax 
     reconciliation and added a new section to create a 
     reconciliation bill to rescind appropriations. The trigger 
     for reconciliation was simplified in the reported version of 
     the bill which required rescission of appropriated funds if 
     actual spending was greater than the spending aggregate in 
     the resolution and, or a tax surcharge bill if actual 
     revenues were less than the revenue aggregates in the 
     resolution. It was a minimalist approach to bring spending 
     into compliance for that year with the budget resolution by 
     rescinding funds appropriated earlier that year or by 
     enacting a simple tax surcharge bill for receipts shortfalls.
       The House Rules Committee Report described the 
     reconciliation process as follows:
       The September 15 concurrent resolution (and any permissible 
     revision) would be considered under the same rules and 
     procedures applicable to the initial budget resolution. This 
     final budget resolution would reaffirm or revise the figures 
     set forth in the first budget resolution and in so doing 
     would take account of the actions previously taken by 
     Congress in enacting appropriations and other spending 
     measures. The final budget resolution may call upon the 
     Appropriations Committees to report legislation rescinding or 
     amending appropriations or the House Ways and Means and 
     Senate Finance Committees to report legislation adjusting tax 
     rates or the public debt limit. Congress may not adjourn 
     until it has adopted the final budget resolution and any 
     required implementing legislation.
       Such implementing legislation would be contained in a 
     budget reconciliation bill to be reported by the House 
     Appropriations Committee. If the total new budget authority 
     contained in the appropriation bills or the budget outlays 
     resulting from them are in excess of the totals set forth in 
     the final budget resolution, the Appropriations Committee 
     would include rescissions or amendments to the appropriations 
     bills in its budget reconciliation bill. This reconciliation 
     bill would contain a provision raising revenues to be 
     reported by the House Ways and Means Committee if estimated 
     Federal revenues are less than the appropriate level of 
     revenues set in the final budget resolution. (House Report 
     93-658, p. 40)
       The Section by Section analysis of the bill in the House 
     Rules Committee Report was more explicit:

  Sec. 133. Budget reconciliation bill to be reported in certain cases

       This section requires the House Appropriations Committee to 
     report a budget reconciliation bill (containing any necessary 
     rescissions or amendments to the annual appropriations bill 
     for the fiscal year involved) if the total budget authority 
     or budget outlays provided by such bills exceeds the 
     applicable level established by the final budget resolution.

Sec. 134. Budget reconciliation bill to include tax measure in certain 
                                 cases.

       The section requires the House Ways and Means Committee to 
     report (as a separate title in the budget reconciliation 
     bill) a tax measure to raise the additional revenue needed if 
     the estimated revenues for the fiscal year involved are less 
     than those set forth in the final budget resolution. (House 
     Report 93-658, p. 8).
       The House Rules Committee rejected many of the most 
     restrictive provisions in the bill as introduced and 
     enunciated five principles that guided its consideration of 
     the bill in Committee. The following excerpt from the House 
     Committee Report demonstrates how important it was to the 
     committee to craft a bill that improved fiscal discipline 
     without riding roughshod over the prerogatives of members and 
     dramatically altering the way in which the House and Senate 
     functioned:
       Your committee decided to remove these restrictive 
     procedures and yet devise an alternative that accomplishes 
     the important need for budget control. Our work has been 
     guided by a number of principles.
       First has been the commitment to find a workable process. 
     Not everything that carries the label of a legislative budget 
     can be made to work. If the 1947-49 debacle is not to be 
     repeated, the new process must be in accord with the 
     realities of congressional budgeting. The complicated floor 
     procedures contained in the Joint Study Committee bill have 
     been eliminated because they would inhibit the proper 
     functioning of Congress.
       Second, budget reform must not become an instrument for 
     preventing Congress from expressing its will on spending 
     policy. The original bill would have ruled out many floor 
     amendments, it would have also stunted the free consolidation 
     of appropriation measures, it would have bound Congress to 
     unusual and oppressive rules, and it would have given one-
     third of the Members the power to thwart a majority's effort 
     to revise or waive such rules. Points of order could have 
     been raised at many stages of the process and legitimate 
     legislation initiatives would have been blocked. The constant 
     objective of budget reform should be to make Congress 
     informed about and responsible for its budget actions, not to 
     take away its powers to act.
       Third, budget reform must not be used to concentrate the 
     spending power in a few hands. All members must have ample 
     opportunity to express their views and to vote on budget 
     matters. On few matters is open and unfettered debate as 
     vital as the budget which determines the fate of national 
     programs and interest. While it may be necessary to establish 
     new budget committees to coordinate the revenue and spending 
     sides of the budget, these committees must not be given 
     extraordinary power in the making of budget policies.
       Fourth, the congressional budget must operate in tandem 
     with and not override the well-established appropriations 
     process. Through its power of appropriation, Congress is able 
     to maintain control over spending. The power has been 
     exercised responsibly and effectively over the years and it 
     should not be diluted by the imposition of a new layer of 
     procedures. The purpose of the budget reform should be to 
     link the spending decisions in a manner that gives Congress 
     the opportunity to express overall fiscal policy and to 
     assess the relative worth of major functions.
       Fifth, the budget controls procedures should deviate only 
     the necessary minimum from the procedures used for the 
     preparation and consideration of other legislation. Undue 
     complexity could only mean the discrediting of any new reform 
     drive. While we must not err with the simplistic approach 
     taken in

[[Page 2878]]

     1947-49, neither must we load the congressional budget 
     process with needless and questionable details. (House Report 
     93-658, p. 29)
       Senator Sam Ervin, Chairman of the Senate Government 
     Operations Committee introduced S. 1541, to provide for the 
     reform of congressional procedures with respect to the 
     enactment of fiscal measures on April 11, 1973. In explaining 
     the need for the legislation Senator Ervin stated:
       ``The congressional procedures with respect to spending the 
     taxpayer's dollar are, to say the least, in dire need of a 
     major overhaul, and have been for quite some time. Since 
     1960, Federal spending has tripled, the inflation rate has 
     tripled, the dollar outflow abroad has quadrupled, and the 
     dollar has been devalued twice--the first such devaluation 
     since 1933, in the heart of the Great Depression. It has been 
     52 years since Congress has done anything about shaping its 
     basic tolls for controlling Federal expenditures. The Budget 
     and Accounting Act of 1921 was the last major reform of the 
     congressional budgetary procedure, yet we are now spending 
     nearly 100 times what we were spending yearly in the 
     1920's.'' (Congressional Record, April 11, 1973, p. 7074)
       While S. 1541, as introduced, contained no reconciliation 
     procedures, the bill reported by the Senate Government 
     Operations Committee on November 28, 1973 included a somewhat 
     convoluted enforcement process that relied on the rescission 
     of appropriated funds and if that could not be accomplished, 
     across the board cuts in spending. The bill as reported, 
     summarized the reconciliation process as follows:
       Reconciliation process: determination of the total of the 
     appropriations enacted; in the event budget resolution 
     ceilings are exceeded, reductions in certain of the 
     appropriations should Congress desire in order to conform to 
     the budget resolution; consideration and adoption of a second 
     budget resolution should Congress desire to spend at levels 
     in excess of the original ceilings established earlier; 
     adjustments in certain appropriations to conform to the 
     latest budget resolution; in the event of impasse on any of 
     the foregoing steps, a pro rata reduction of all 
     appropriations to conform the ceilings enacted in the latest 
     budget resolution. (Senate Report 93-579 p. 17)
       The Senate bill was subsequently referred to the Senate 
     Rules Committee on November 30, 1973. Senator Robert C. Byrd, 
     the Assistant Minority Leader and a member of the Rules 
     Committee assembled a working group that made extensive 
     revisions to the bill reported by the Senate Government 
     Operations Committee. The group consisted of representatives 
     of the Chairmen of the ten standing committees of the Senate, 
     four joint committees, the House Appropriations Committee, 
     the Congressional Research Service, and the Office of Senate 
     Legislative Counsel. The Senate Rules Committee sought a more 
     practical approach that minimized the impact on existing 
     Senate procedure and practice. The Senate Rules Committee 
     Report stated:
       ``The amendment in the nature of a substitute formulated by 
     the Committee on Rules and Administration retains the basic 
     purposes and framework of the bill. However, it makes a 
     number of changes designed to tailor the new budgetary roles 
     and relationships more closely to the existing methods and 
     procedures of the Congress. The intent remains to equip 
     Congress with the capability for determining Federal budget 
     and priorities. However, the Committee sought to devise a 
     balanced and workable process that recognizes the impact of 
     budget reform on committee jurisdictions, legislative 
     workloads, and floor procedures.'' (Senate Report 93-688 p. 
     4)
       This is consistent with the view of the Senate Government 
     Operations Committee which had reported the bill earlier that 
     Congress. The Government Operations Committee Report stated:
       ``The changes proposed by the Committee, are, for the most 
     part, designed to add a new and comprehensive budgetary 
     framework to the existing decision making processes, with 
     minimum disruption to established methods and procedures.'' 
     (Senate Report 93-579 p. 15)
       The Rules Committee explicitly rejected a reconciliation 
     process that relied solely on rescission of appropriated fund 
     to eliminate deficit spending. Section 310 of the reported 
     bill authorized the Budget Committee (1) to specify the total 
     amount by which new budget authority for such fiscal year 
     contained in laws under the jurisdiction of the various 
     committees was to be changed and to direct each committee to 
     recommend such changes in law, (2) if that is unfeasible, 
     direct that all budget authority be changed on a pro rata 
     basis (3) specify the total amount by which revenues are to 
     be changed and to direct the Finance Committee to recommend 
     such changes and (4) specify the amount which the statutory 
     limit on public debt was to be changed. The bill reported by 
     the Senate Rules Committee broadened the application of 
     reconciliation to all committees, not just appropriations. It 
     required that all committees with jurisdiction over direct 
     spending be required to participate in budget reductions and 
     allowed for the inclusion of tax measures to eliminate budget 
     deficits. The Rules Committee report specifically identified 
     revenue shortfalls as a major contributor to budget deficits. 
     Approximately one and one-half pages were devoted to a 
     discussion of revenue shortfalls in the two page description 
     of the reconciliation process. The following is an excerpt 
     from the report describing reconciliation and emphasizes the 
     importance the committee attached to examining the tax base 
     and increasing revenues when necessary:
       Perhaps the most significant weakness in the bill referred 
     to the Committee was the failure to give sufficient attention 
     to the revenue aspect of Congressional budgeting. This is not 
     surprising in light of the fact that criticisms of 
     Congressional spending provided the principal impetus to the 
     development of this legislation. But it is a serious omission 
     when the source of the large Federal deficit (in the years 
     preceding the creation of the Joint Study Committee on Budget 
     Control) is more clearly identified.
       On closer inspection, this large and unexpected addition to 
     the debt--which some observers believe contributed to the 
     inflationary pressures--resulted largely from the revenue 
     side of the balance sheet, and not from higher spending. The 
     difference between budget estimates and actual receipts for 
     those three years is $27.7 billion, or 65% of the difference 
     between estimated and actual deficits.
       These three years are typical only in that there were three 
     consecutive shortfalls in revenue. Moreover, for each year, 
     the administration submitted a later estimate, which was even 
     further from the actual results that the original budget 
     estimate. The typical overestimate or underestimate for a 
     given year is not far different from those for 1970-1972. 
     And, for fiscal policy purposes, an error in either direction 
     may be equally significant.
       Difference between revenue estimates and actual receipts 
     can, of course, be explained by several factors. One is the 
     failure of the economy to perform at predicted levels. But 
     there are cases where the estimates were wide of the mark, 
     even when the economic forecasts were relatively accurate. 
     There is also the action of Congress in not following the 
     President's recommendations to increase taxes, or in reducing 
     taxes when he has not proposed it. In any case, it is clear 
     that a sound congressional budget policy cannot be based on 
     the assumption that control of spending levels is sufficient 
     to achieve desirable economic results. (Senate Report 93-688 
     p. 868-9)
       During floor consideration of S. 1541, the Senate adopted 
     the amendment proposed by the Senate Rules Committee, in lieu 
     of that of the Senate Government Operations Committee. The 
     House and Senate passed their respective bills without 
     amendment to the reconciliation proceedings reported by the 
     House and Senate Rules Committees. The Senate incorporated 
     its amendment into H.R. 7130, and went to conference on the 
     House bill. The conference committee reported the bill and 
     retained much of the Senate language regarding the scope of 
     reconciliation with the exception of the provision 
     authorizing pro rata reductions in spending bills. While the 
     reconciliation process has evolved since 1974, Section 310(a) 
     of the Act regarding the scope of reconciliation has not 
     changed significantly. The conference report was adopted 
     overwhelmingly by both houses and signed into law to become 
     Public Law 93-44.
       The conference committee on H.R. 7130 adopted the Senate's 
     language regarding the scope of reconciliation and included 
     in the statement of managers a scant summary of the new 
     process. It was not necessary to elaborate since both the 
     House and Senate Rules Committees were explicit in their 
     reports that reconciliation was to be used at the end of the 
     fiscal year to reduce spending or increase taxes in order to 
     eliminate budget deficits. It is inconceivable, given the 
     legislative history of the 1974 Act and the budget crisis 
     confronting the Congress, that the conferences would create 
     an expedited process to either reduce taxes or increase 
     spending. Under the Act, Congress was required to adopt two 
     budget resolutions. Congress would pass its first budget 
     resolution at the beginning of the session that would provide 
     non-binding targets and create the budgetary framework for 
     the appropriations and other spending bills. Subsequently, 
     Congress would pass the necessary spending bills. Congress 
     was then required to pass a second budget resolution no later 
     than September 15 which could be enforced by reconciliation 
     allowing the Congress to consider a bill or resolution to 
     bring spending and revenue into compliance with the second 
     resolution.
       In addition to a reconciliation bill, the conference 
     committee created an alternative reconciliation process that 
     authorized the delay in the enrollment of previously passed 
     appropriation and entitlement bills until the amounts were 
     reconciled with the budget resolution. The reconciliation 
     resolution would direct the Secretary of the Senate or the 
     Clerk of the House to correct the enrollment of previously 
     passed bills prior to submitting them to the President for 
     signature. This optional reconciliation process, added in 
     conference strongly suggests that the conference were not 
     trying to expand the scope of reconciliation, but instead 
     were looking for a quick way to make minor, last minute, 
     changes to previously passed legislation in

[[Page 2879]]

     order to avoid budget deficits during the last two weeks of 
     the fiscal year.


                The Abuse of the Reconciliation Process

       The Congressional Budget Act of 1974 was intended to 
     provide a process that complemented existing House and Senate 
     rules not supplant them. There is ample support in the House 
     and Senate Committee reports for the proposition that the 
     authors of the Act wanted to minimize conflict with existing 
     proceedings. There has been a constant tension between 
     expediting the consideration of the budget and maintaining 
     the important rights members enjoy under the Senate rules and 
     precedents. The hallmark of Senate procedure is the 
     ability of members to engage freely in debate, to offer 
     amendments and the thread that ties all Senate procedure 
     is the importance placed on preserving the rights of any 
     minority in the Senate. This, and this alone, is what 
     distinguishes Senate procedure from that of the House of 
     Representatives and forces Democrats and Republicans to 
     come to a consensus when considering major policy matters. 
     Since the reconciliation bill would be considered late in 
     the session and would be narrow in scope providing 
     expedited procedures which severely limit debate and the 
     ability to amend seemed like a reasonable trade off in 
     1974.
       The Congressional Budget Act has been amended numerous 
     times since 1974 in a continuing effort to impose greater 
     fiscal discipline on budgetary matters. Congress has 
     abandoned the practice of adopting a second budget resolution 
     and now passes one binding resolution that can include 
     reconciliation instructions if necessary. Additional 
     enforcement mechanisms have been added that can be employed 
     during the fiscal year when considering tax and spending 
     bills that should have made it less likely that Congress 
     would need to act at the end of the year to reconcile the 
     fiscal goals contained in the budget resolution with the 
     legislation it passes during the year.
       Just the opposite has occurred and Congressional leaders 
     soon realized that reconciliation could not be used to make 
     major changes in revenue and direct spending laws because of 
     the compressed time for debate and the severe restrictions 
     imposed on individual Senators. Despite the continued reforms 
     and the improving fiscal health of the federal budget, there 
     is still a strong interest in enacting, through expedited 
     procedures, major legislation that has nothing to do with the 
     deficit reduction. Because of procedural protections, 
     reconciliation bills have proven to be almost irresistible 
     vehicles for Senators to move all types of legislation.
       This abuse of the reconciliation process has been rectified 
     in the past by Congress collectively insisting that the 
     Senate's traditions be maintained. In 1981, the Senate Budget 
     Committee reported a reconciliation bill, S. 1371, the 
     Omnibus Reconciliation Act of 1981, which contained hundreds 
     of pages of authorization provisions that had no impact on 
     the deficit. The bill was viewed by the Senate authorizing 
     committees as a convenient vehicle to pass numerous 
     authorizations, many of which could not be passed as free 
     standing bills. Both Republicans and Democrats viewed this as 
     an abuse of the reconciliation process. Then Majority Leader 
     Howard Baker called up and adopted an amendment which was co-
     sponsored by Minority Leader Robert C. Byrd, and the Chairman 
     and Ranking Minority Member of the Budget Committee, Senators 
     Domenici and Hollings which struck significant parts of the 
     bill. The following is a colloquy during debate on the 
     amendment:
       Mr. Baker. Aside from its salutary impact on the budget, 
     reconciliation also has implications for the Senate as a 
     institution . . . I believe that including such extraneous 
     provisions in a reconciliation bill would be harmful to the 
     character of the U.S. Senate. It would cause such material to 
     be considered under time and germaneness provisions that 
     impede the full exercise of minority rights. It would evade 
     the letter and spirit of rule XXII.
       It would create an unacceptable degree of tension between 
     the Budget Act and the remainder of Senate procedures and 
     practice. Reconciliation was never meant to be a vehicle for 
     an omnibus authorization bill. To permit it to be treated as 
     such is to break faith with the Senate's historical 
     uniqueness as a form for the exercise of minority and 
     individual rights.''
       Mr. Byrd. Mr. President, if the reconciliation bill is 
     adopted in its present form, it will do violence to the 
     budget reform process. The reconciliation measure contains 
     many items which are unrelated to budget savings. This 
     development must be viewed in the most critical light, to 
     preserve the principle of free and unfettered debate that is 
     the hallmark of the U.S. Senate.
       The ironclad parliamentary procedures governing the debate 
     of the reconciliation measure should by no means be used to 
     shield controversial or extraneous legislation from free 
     debate. However, language is included in the reconciliation 
     measure that would enact routine authorizations that have no 
     budget impact whatsoever. In other cases, legislation is 
     included that makes drastic alterations in current policy, 
     yet, has no budgetary impact.
       The reconciliation bill, if it includes such extraneous 
     matters, would diminish the value of rule XXII. The Senate is 
     unique in the way that it protects a minority, even a 
     minority of one, with regard to debate and amendment. The 
     procedures that drive the reconciliation bill set limits on 
     the normally unfettered process of debate and amendment, 
     because policy matters that do not have clear and direct 
     budgetary consequences are supposed to remain outside its 
     scope. (Congressional Record, June 22, 1981, P. S6664-66)
       The traditions and precedents of the Senate were adhered to 
     during consideration of President Reagan's tax and spending 
     cut proposals in 1981. Appropriately, Congress used the 
     reconciliation procedures to implement the spending cuts 
     contained in the Omnibus Budget Reconciliation Act of 1981. 
     However, the President's tax cuts were brought before the 
     Senate as a free-standing bill. More than one hundred 
     amendments were debated and disposed of in twelve days of 
     debate.
       On October 24, 1985, the Senate debated and adopted the 
     Byrd Rule by a vote of 96-0, as an amendment to the 
     Consolidated Omnibus Budget Reconciliation Act of 1985. The 
     rule was expanded in an effort to further limit the scope of 
     the reconciliation process to deficit reduction and became 
     Section 313 of the Congressional Budget Act. The following 
     are excerpts from the debate on the amendment:
       Mr. Byrd. Mr. President, the Senate is a deliberative body, 
     and the reconciliation process is not a deliberative process. 
     It (is) not a deliberative process. Such an extraordinary 
     process, if abused, could destroy the Senates deliberative 
     nature. Senate committees are creatures of the Senate, and, 
     as such, should not be in the position of dictating to the 
     Senate as is being done here. By including material not in 
     their jurisdiction or matter which they choose not to report 
     as separate legislation to avail themselves of the non 
     deliberative reconciliation process, Senate committees 
     violate the compact which created both them and the 
     reconciliation process.

                           *   *   *   *   *

       Mr. Domenici. Mr. President, as I was saying, I commend the 
     distinguished minority leader. Frankly, as the Chairman of 
     the Budget Committee, I am aware of how beneficial 
     reconciliation can be to deficit reduction. But I am also 
     totally aware of what can happen when we choose to use this 
     kind of process to basically get around the Rules of the 
     Senate as to limiting debate. Clearly, unlimited debate is 
     the prerogative of the Senate that is greatly modified under 
     this process.
       I have grown to understand that this institution, while it 
     has a lot of shortcomings, has some qualities that are rather 
     exceptional. One of those is the fact it is an extremely free 
     institution, that we are free to offer amendments, that we 
     are free to take as much time as this U.S. Senate will let us 
     to debate and have those issues thoroughly understood both 
     here and across this country. (Congressional Record, October 
     24, 1985, p. S14032-37)
       On October 13, 1989, the Senate exercised a stringent 
     application of the Byrd Rule. Majority Leader Mitchell, on 
     behalf of himself, and Minority Leader Robert Dole, offered a 
     leadership amendment to strike extraneous provisions from the 
     reconciliation bill, S. 1750. The amendment went further than 
     the text of the Byrd Rule in order to limit the scope of the 
     bill to deficit reduction matters. The debate follows:
       Mr. Mitchell. Mr. President, the purpose and effect of this 
     amendment may be summed up in a single sentence. The purpose 
     of the reconciliation process is to reduce the deficit.
       The amendment is lengthy, consisting of many pages, words 
     and numbers, but it has that fundamental objective. As I said 
     when I addressed the Senate a week ago Thursday, the 
     reconciliation process has in recent years gone awry. The 
     special procedures included in the Budget Act as a way of 
     facilitating deficit reduction items became a magnet to other 
     legislation which is unrelated to the objective of reducing 
     the deficit.
       Mr. Domenici. There are a few things about the U.S. Senate 
     that people understand to be very, very significant. One is 
     that you have the right, a rather broad right, the most 
     significant right, among all parliamentary bodies in the 
     world to amend freely on the floor. The other is the right to 
     debate and to filibuster.
       When the Budget Act was drafted, the reconciliation 
     procedure was crafted very carefully. It was intended to be 
     used rather carefully because, in essence, Mr. President, it 
     vitiated those two significant characteristics of this place 
     that many have grown to respect and admire. Some think it is 
     a marvelous institution of democracy, and if you lose those 
     two qualities, you just about turn this U.S. Senate into the 
     U.S. House of Representatives or other parliamentary body. 
     (Congressional Record, October 13, 1989, p. S13349-56)
       In recent years, the use of reconciliation has changed. The 
     procedural protections of the reconciliation process are not 
     being used to enact stand alone legislation that simply 
     reduces taxes. In 1996, the FY 1997 budget resolution 
     contained reconciliation instructions to create three 
     separate reconciliation bills that if enacted would have 
     resulted in a net reduction in the deficit. The House and

[[Page 2880]]

     Senate committees were authorized to report three separate 
     bills, one to reduce Medicaid costs through welfare reform, 
     the second to reduce Medicare costs and the third to reduce 
     taxes. Democratic Leader Daschle argued that this was an 
     abuse of process because it directed the Finance Committee to 
     reconcile several subject matter specific spending bills and 
     for the first time contained instructions to reconcile a 
     stand alone tax reduction bill. The conferees knew that 
     consideration of a tax reduction bill in reconciliation was a 
     great departure from past practices and the statement of 
     managers accompanying the conference report justified it by 
     arguing that the reconciliation tax cut bill was one of three 
     reconciliation bills when taken together would still provide 
     overall deficit reduction. The report states: ``while this 
     resolution includes a reconciliation instruction to reduce 
     revenues, the sum of the instructions would not only reduce 
     the deficit, but result in a balanced budget by 2002.''
       However, during floor debate on the FY 1997 budget 
     resolution, Senate Budget Committee Chairman Domenici went 
     far beyond the justification for tax cuts contained in the 
     conference report and argued that a 1975 incident involving 
     Senator Russell Long, supported what seemed to be a novel 
     idea in 1996, that reconciliation was not intended solely for 
     deficit reduction and could be used to enact tax cuts. A year 
     after the 1974 Act was passed, Senate Finance Committee 
     Chairman Russell Long came to the floor and announced that a 
     small $6 billion bill to reduce taxes was a reconciliation 
     bill, even though there was never any reference to 
     reconciliation as the Finance Committee moved the bill 
     through the Senate. In fact, the budget resolution was passed 
     six months after the tax bill in question had passed the 
     House and been referred to the Senate Finance Committee. Note 
     the exchange that took place between Senator Muskie, the 
     Chairman of the Senate Budget Committee and Senator Vance 
     Hartke regarding the use of this new process:
       Mr. Hartke. In other words, the chairman of the Committee 
     on the Budget has made an assumption that this is a 
     reconciliation bill.
       Mr. Muskie. No, may I say, the chairman of the Committee on 
     Finance has told me it is a reconciliation bill.
       Mr. Hartke. The chairman of the Finance Committee can make 
     a statement, but that does not make it the situation. The 
     Committee on Finance has not acted upon this being a 
     reconciliation bill. There is no record of its being a 
     reconciliation bill; there is no mention of it in the report 
     as being a reconciliation bill. Therefore, I think a point of 
     order would not be well in regard to any amendment, because 
     it is not a reconciliation bill. This is a tax reduction 
     bill. I can see where the Senator may assume, but it is an 
     assumption which is not based on a fact.

                           *   *   *   *   *

       Mr. Hartke. I am not chasing my tail. I will point out, 
     very simply, that in my judgment, this is a case where two 
     Senators have gotten together and agreed that this is a 
     reconciliation bill and there is nothing in the record to 
     show that it is a reconciliation bill. (Congressional Record, 
     December 15, 1975, p. ?)
       This 1975 incident was ignored and not relied upon until 
     1996, during consideration of the FY 1997 budget resolution 
     when it was used by the Republican Leadership to prop up the 
     argument for a stand alone tax reduction bill in 
     reconciliation. Prior to that, it was viewed as an aberration 
     that occurred at a time when Congress was trying to figure 
     out how to implement the new Budget Act. The 1975 incident 
     was never viewed as a valid precedent on reconciliation, 
     since it basically contradicted two decades of practice where 
     the sole focus of reconciliation has been deficit reduction. 
     The Chairman and Ranking Member of the Senate Budget 
     Committee, Senators Hollings and Domenici did not give any 
     credence to the 1975 incident when they announced in 1980 
     that the budget resolution under consideration that year, 
     would be the first time Congress attempted to use the 
     reconciliation process provided in the Budget Act. Senator 
     Hollings, then the Chairman of the Senate Budget Committee 
     made the following statement.
       ``Today, we will take another step in the practical 
     application of the Budget Act's design. The reconciliation 
     procedure has never before been employed. The action we take 
     today will set an important precedent for making the budget 
     stick.'' (Congressional Record, June 30, 1980)
       Senator Domenici concurred with his Chairman and made the 
     following statement:
       ``Mr. President, I rise today to support the reconciliation 
     bill that is now before the Senate. This is an historic 
     moment, both for the institution and for the budget process 
     that this institution devised for itself in 1974. The first 
     attempt to use the reconciliation provisions in the Budget 
     Act was made last fall on the second budget resolution for 
     fiscal year 1980.'' (Congressional Record, June 30, 1980)
       In addition, Congress passed the Gramm-Rudman-Hollings 
     Balanced Budget and Emergency Deficit Control Act in 1985 
     which further clarified the scope of reconciliation and made 
     moot, any arguments that the 1975 incident opened the door to 
     a broader application of reconciliation. Section 310(d) was 
     added to the Congressional Budget Act to severely restrict 
     amendments to reconciliation bills that did not have the 
     affect of reducing the deficit. The language of Section 
     310(d)(2) is as follows:
       (2) It shall not be in order in the Senate to consider any 
     amendment to a reconciliation bill or reconciliation 
     resolution if such amendment would have the effect of 
     decreasing any specific budget outlay reductions below the 
     level of such outlay reductions provided (in such fiscal 
     years) in the reconciliation instructions . . . or would have 
     the effect of reducing Federal revenue increases below the 
     level of such revenue increases provided (for such fiscal 
     years) in such instructions relating to such bill or 
     resolution. . . .
       While the provision limits floor amendments, the clear 
     inference when read in the context of the overall section is 
     that reconciliation dealt only with decreasing spending or 
     increasing taxes and any amendment offered during 
     reconciliation had to have an offset so as not to thwart 
     deficit reduction.
       In 1966, during consideration of the FY 1997 budget 
     resolution, Democratic Leader Daschle made several inquiries 
     of the Chair and the responses by the Presiding Officer could 
     be used to argue for a broader application in the use of 
     reconciliation. However, the point of order raised against 
     the budget resolution by Senator Daschle, the ruling of the 
     Chair and the subsequent appeal, all of which carry much more 
     weight in Senate procedure, were quite narrow and allowed 
     this precedent to be distinguished in order to preserve the 
     integrity of the reconciliation process. The point of order 
     raised by the Democratic Leader, given the particular 
     reconciliation instructions at issue can be summarized as 
     follows: It is inappropriate to consider a stand alone 
     reconciliation bill to cut taxes, even if the net impact of 
     the three reconciliation bills taken together reduced the 
     deficit. The point of order raised by the Democratic Leader 
     was not sustained and the appeal of the ruling by the full 
     Senate was not successful. Note the point of order and the 
     ruling of the Chair.
       Mr. Daschle. I argue that, because it creates a budget 
     reconciliation bill devoted solely to worsening the deficit, 
     it should no longer deserve the limitations on debate of a 
     budget resolution. Therefore, I raise a point of order that, 
     for these reasons, the pending resolution is not a budget 
     resolution.
       The Presiding Officer. All right. The Chair will rule that 
     the resolution is appropriate and the point of order is not 
     sustained. (Congressional Record, May 21, 1996, p. S5415-7)
       The Senate's decision in 1996 to use reconciliation to 
     consider a stand alone tax cut bill, even in the context of 
     overall deficit reduction, was a major departure from the 
     past practice and over two decades of experience in applying 
     the Act. The 1996 precedent can and must be distinguished 
     from recent efforts to use reconciliation to enact tax cuts 
     where there is absolutely no attempt at deficit reduction. 
     The procedural issues raised by using the reconciliation 
     process to enact tax reductions, absent an overall effort to 
     reduce the deficit, have not yet been joined by the Senate 
     and remain an open question.
       While the reconciliation instructions of the FY 1997 budget 
     resolution taken as a whole arguably met the intended deficit 
     reduction goals, recent reconciliation instructions have 
     completely perverted the intent of the 1974 Act. In 1999, the 
     reconciliation process was used by the Republican leadership 
     to allow for a $792 billion tax cut to be brought to the 
     Senate floor. Unlike the FY 1997 budget resolution, no 
     argument was made that the tax cut would actually lead to 
     increased revenues or spending reductions. It was the first 
     time that reconciliation instructions were issued and a 
     revenue bill reported pursuant to those instructions, 
     mandated a worsening of fiscal discipline for the federal 
     government. Again, in 2000, reconciliation was used to limit 
     consideration of a major tax cut proposal that had nothing to 
     do with deficit reduction.
       There has been a great deal of speculation, fueled by the 
     Senate Republican Leadership, that President Bush's tax plan 
     will be brought to the Senate floor with reconciliation 
     protections. It is expected the legislation will provide for 
     at least $1.6 trillion and perhaps as much as $2.6 trillion 
     in tax cuts over 10 years. The legislation is not expected to 
     contain any reductions in spending and the result of the 
     proposed tax bill will be a worsening the fiscal position of 
     the federal government. If Congress provides sufficient room 
     in the FY2002 budget resolution to enact tax reductions there 
     is absolutely no reason to consider the bill in 
     reconciliation, except to completely preclude the minority 
     from participating in fashioning the bill.
       The Senate is at a point, as it was in the 1980's, when the 
     use of reconciliation to enact legislation unrelated to 
     deficit reduction, threatens to undermine the most important 
     traditions and precedents of the Senate and make a mockery of 
     the congressional budget process. In a recent article 
     entitled, ``Budget Battles, Government by Reconciliation,'' 
     in the National Journal on January 9, 2001, the author, Mr. 
     Stan Collender, an expert on the federal budget process, who 
     served as senior staff member of the House Budget Committee 
     in the 1970's states:

[[Page 2881]]

       ``. . . At this point, there is talk about at least five 
     different reconciliation bills--three for different tax 
     proposals and two for various entitlement changes. Still more 
     are being considered. Taking advantage of the reconciliation 
     procedures in this way would not be precedent-shattering, 
     though it would clearly be an extraordinary extension of what 
     has been done previously. Nevertheless, it would be the 
     latest in what has become a steady degradation of the 
     congressional budget process. Reconciliation, which was 
     created to make it easier to impose budget discipline, would 
     instead be used to make it easier to get around other 
     procedural safeguards with the result being more spending and 
     lower revenues.''

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