[Congressional Record (Bound Edition), Volume 156 (2010), Part 3]
[Senate]
[Pages 3753-3756]
[From the U.S. Government Publishing Office, www.gpo.gov]




                              HEALTH CARE

  Mr. GREGG. Madam President, I rise with some of my colleagues today 
to discuss one of the issues that is going to have a huge impact on how 
this health care issue is resolved or not resolved; that is, the 
question of what reconciliation is and what it implies relative to the 
legislative process.
  ``Reconciliation'' is an arcane term. It is a term that is tied to 
and created by the Budget Act under which we function in the Congress. 
It is ironic that the use of reconciliation would become the central 
effort in buying votes in the House of Representatives in order to pass 
the big, the giant health care bill, known as the Senate health care 
bill--which bill, as we all know, expands the size of government by 
$2.3 trillion and, in fact, we understand now there is a new score from 
CBO which is going to raise that number even further when it is 
accurately reflected.
  It takes the government and puts it into basically the business of 
delivering health care in this country in a way that is extraordinarily 
intrusive and will cost a lot of people who are on private insurance--
the insurance they have--which they probably feel fairly comfortable 
with although it may be very expensive--and it still leaves 23 million 
Americans uninsured while claiming to do a better job of insuring 
Americans and improving our health care system when, in fact, what it 
does is create massive debt that will be passed on to our children 
which they cannot and will not be able to afford, explodes the size of 
government and, in my opinion, will lead to a diminution of quality of 
care in this country.
  The way this big bill, which I outlined in the thumbnail process, is 
going to be passed in the House of Representatives is to have a trailer 
bill called a reconciliation bill, which is an art form developed 
around here relative to the budget process which is supposed to be used 
for very specific efforts, certainly not for the purpose of buying 
votes from the liberal constituencies in the House or to pass a bigger 
bill. But that bill needs to be discussed as to what its implications 
are.
  A number of us have come to the floor of the Senate today to try to 
explain what the reconciliation bill is and how it has historically 
been used but what the implications are relative to some of the things 
in the bigger Senate bill, in the giant bill, the giant spending bill; 
what the implications of the reconciliation changes in the 
reconciliation trailer bill will be on the bigger Senate bill, and what 
the representations that are being made are and whether they are 
accurate.
  Specifically, let's take one issue, and that is what is known as the 
Cadillac tax. The tax on Cadillac policies, which is the appropriate 
way to describe this, is a proposal which was in the Senate bill to 
basically eliminate the deductibility for health insurance policies 
that exceeded a certain level of cost--$27,000, I believe, is the 
number. To the extent an insurance policy paid for by an employer 
exceeds that number in cost, the excess in amount--let's say it costs 
$32,000 a year for an employer to have an insurance policy for you. 
That sounds like a lot of money, but actually there are a number that 
cost that much, especially of union programs. To the extent the 
difference between the $27,000 and the $30,000 is paid for by

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your employer, that will no longer be deductible by the employer as an 
expense. It is done in a more complex way, but that is basically the 
way it works out.
  The effect of that is fairly significant on what is known as the 
Social Security trust fund because it actually creates a situation 
where there will be more taxable wages, which will mean that the Social 
Security trust fund will be getting more tax revenue.
  This brings into play the question of whether you can even bring 
forward language of this type which affects the Social Security trust 
fund through the taxing of Cadillac policies in a reconciliation bill. 
I think this needs to be discussed because of a very important issue as 
to whether the House Members are being told correctly how this will be 
dealt with in the Senate.
  I know my colleague wants to speak to the issue.
  Mr. THUNE. Madam President, I ask my colleague, it seems to me, as he 
described this reconciliation trailer bill that the House will use, 
first, to try to fix elements of the Senate bill they do not like, and 
then that reconciliation bill would come back to the Senate, I ask the 
Senator: Is it not true that the House and Senate already passed their 
health care bills? Why then is this second vehicle, this reconciliation 
bill necessary?
  It seems to me at least the House, if it were to vote on the Senate-
passed bill, that would put into law most of the provisions that are 
included in that bill. So why is the second process necessary, I ask my 
colleague from New Hampshire?
  Mr. GREGG. It appears that the House Democratic membership is, first, 
afraid to vote on the bill. They are actually going to ``deem'' this, 
it appears, versus vote on it, which is an incredible act of political 
cowardice, in my opinion.
  Secondly, they definitely do not want to go to conference. They do 
not want to do what the traditional process around here calls for. When 
you have two different bills--a Senate bill and a House bill--we take 
them to conference and discuss those bills and come out with a final 
bill. Why don't they want to do that? Because they know they cannot 
pass the final bill in the Senate. To get around that, they developed 
this policy of reconciliation as a trailer bill so they will send back 
the reconciliation bill to be voted on here--not on the big bill, a 
$2.5 trillion bill. Thus, not only will they avoid a vote in the House 
on the big bill, they will avoid having to go to conference, and they 
will have basically bypassed the constitutional process in this manner.
  Mr. CORNYN. If the Senator will yield for a question, I have heard 
this process whereby the House is going to deem the Senate bill passed 
and then pass a reconciliation bill which will then be sent over to the 
Senate as Speaker Pelosi is asking Members of the House to hold hands 
and jump off a political cliff, hoping the Senate will catch them by 
passing the reconciliation bill unaltered or just in the same form that 
it passed the House. But is it not true that complications arise in 
section 313 of the Congressional Budget Act because of the Byrd rule?
  We have heard a lot of talk about the Byrd rule, what points of order 
might be appropriate in the Senate. I wonder if the Senator--he touched 
on this a moment ago--would explain, with 41 Senators agreeing to 
sustain all points of order in the Senate, how many different holes can 
be punched in the reconciliation bill passed by the House when points 
of order are sustained.
  The Senator from New Hampshire mentioned the Cadillac tax. I note 
that the president of AFL-CIO was visiting with President Obama at the 
White House on Wednesday seeking further reassurances that the tax on 
the Cadillac plans would be deferred, and presumably that would be part 
of the reconciliation bill.
  Can the Senator from New Hampshire explain what kind of jeopardy the 
Byrd rule and points of order call into play that would make it 
unlikely that the President's promise to defer the tax on union 
Cadillac plans could pass the Senate?
  Mr. GREGG. In order to buy votes, as I understand it, in the House--
and this is basically a vote-buying exercise--the reconciliation bill, 
in order to buy votes, they are going to put changes to the Senate bill 
in the reconciliation bill, and then send the reconciliation bill back 
here to be voted on, on the theory that it only takes 51 votes to pass 
it.
  The only problem with that approach is that a reconciliation bill is 
part of the budget process and has very strict limitations on what can 
be in it. So much of what they are talking about putting in the 
reconciliation bill may well be knocked out in the Senate.
  For example, the Senator from Texas mentioned the Cadillac tax. If in 
any way the Cadillac policy tax language impacts Social Security, it 
will be subject to a point of order. In fact, it will be subject to two 
points of order in the Senate, and it will take 60 votes to overwhelm 
that point of order. Therefore, since 41 members of the Republican 
Party have signed a letter saying we are going to sustain the rules of 
the Senate, we are going to stand by the laws that govern the Senate, 
the procedures here, that language will be knocked out.
  What is being represented to House Democrats as a way to get their 
vote, to vote for the big bill which is to change the language relative 
to the Cadillac policy tax in the smaller bill, the reconciliation 
bill, that probably will not survive the process and will probably be 
knocked out on a procedural move, a procedural challenge on the Senate 
floor because it is inconsistent with the Senate rules.
  Mr. CORNYN. If the Senator will allow me another question to clarify 
a point he made, and then certainly turn to the Senator from South 
Dakota, the point of order we are talking about, is it true that under 
section 313(B)(1)(F), that provision, that specific provision could 
drop out of the bill, but under a separate point of order under section 
310(g) of the Congressional Budget Act, it could literally bring down 
the entire bill? Is that a correct reading of the Congressional Budget 
Act?
  Mr. GREGG. The Senator from Texas understands the rules very well. A 
310(g) challenge--to put it in understandable language--is a challenge 
that says it affects Social Security. The language affects Social 
Security. If the Cadillac policy tax impacts the Social Security trust 
fund, which, in my opinion, it does, and the Parliamentarian rules that 
it does, then the entire bill will fall.
  Mr. THUNE. Let me, if I might, explore this a little further with the 
Senator from New Hampshire and follow up with a question that the 
Senator from Texas asked.
  As I understand this then, the Cadillac tax provisions that were in 
the Senate bill--and that bill is now over in the House and going to be 
voted on--because of the changes that have been proposed to it now, it 
would delay the implementation of the Cadillac tax. Of course, the 
Cadillac tax, as the Senator from New Hampshire explained, would cap 
the amount of health care benefits that would be tax free, essentially, 
so above and beyond that would then become taxable. There is an 
assumption made that there would be a shift from health care benefits 
from employers to cash compensation, which would be taxable and 
generate more payroll tax revenues. That was the Senate bill as it 
passed here. The additions or modifications that are being considered 
in the House would delay the implementation date. Therefore, there is a 
lot of payroll tax revenue that would be coming in under Social 
Security that would no longer be realized or at least not be realized 
until the year 2018, which affects the amount of revenue that would be 
coming in under the Senate-passed bill, if these changes are adopted.
  As I understand what the Senator from New Hampshire is saying, that 
will impact Social Security revenues. Those are payroll tax revenues, 
and any changes that are made to Social Security create a violation of 
the reconciliation process in the Senate--the Byrd rule, as the Senator 
from Texas referred to--and, therefore, a point of order would lie 
against that reconciliation bill when it comes back over here.
  The majority, I assume, would move to waive that point of order, but 
what

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happens if that point of order is not waived? If the majority is not 
successful in having that point of order waived, what happens to that 
reconciliation bill, which at that time would be under consideration in 
the Senate.
  Mr. GREGG. Well, there are two points of order available. One is the 
Byrd point of order. If that were not waived, that section would go out 
of the bill. So people interested in that section, who used that 
section as the reason they were justifying voting for the bigger bill, 
that section would not survive. So they would have been sold a bill of 
goods.
  The second point of order would take down the whole bill, and it 
would lose its reconciliation protections, which would mean the bill 
would require 60 votes to pass here. I can absolutely guarantee you it 
could not get 60 votes to pass. So you could presume the entire 
reconciliation bill would be dead. Again, people who are relying on the 
reconciliation bill in the House of Representatives--House Members on 
the Democratic side who are being told we will fix it in 
reconciliation--may well be being sold a bill of goods, if it is 
determined that some of this reconciliation language affects Social 
Security because it is very likely the entire bill will go down in the 
Senate because it will violate our Senate rules.
  Mr. CORNYN. Following up with what the Senator from New Hampshire is 
saying by ``being sold a bill of goods,'' is he suggesting the 
leadership in the House and Speaker Pelosi are guaranteeing to House 
Members that the bill they pass--the reconciliation bill--will pass the 
Senate intact and, thus, they will have political cover from their 
constituents who don't like this bill, but they will be able to shape 
and affect the final outcome?
  Is the Senator from New Hampshire suggesting that because the 41 
Senators who have said we will vote against waiving any budget points 
of order, that there will either be holes punched in that 
reconciliation bill that will make it impossible for the Speaker to 
keep her promise to the House Members ultimately or that it will bring 
down the bill entirely? Is that what the Senator is saying when he 
talks about selling them a bill of goods?
  Mr. GREGG. Essentially, what I am saying is--and the Senator from 
Texas has certainly put it in context--the only reason they could 
possibly be using this vehicle, this reconciliation vehicle, this 
extraordinary process is because they are using it to get people to 
vote for the bigger bill that they do not like, and they are claiming 
that bigger bill will be improved by this reconciliation vehicle. Yet 
it is pretty obvious that the reconciliation vehicle, when it comes 
over here, is going to be punched through and through with holes 
because it will violate the rules of the Senate on issues such as this.
  Mr. CORNYN. That is particularly true of the promise the President 
has apparently made to union leadership to defer the application of a 
Cadillac tax--the excise tax on Cadillac health insurance plans. That 
promise, as the promise to televise the negotiations and pass the bill 
on C-SPAN; the promise that if you have a policy you like, you can keep 
it; the promise that the bill would not raise taxes and the like; that 
would be another promise that would not be kept--that promise would be 
broken?
  Mr. GREGG. That would be like a ``the check is in the mail'' type 
promise. I would not take it with a serious grain of salt.
  Mr. THUNE. Well, is it possible, I would ask both my colleagues, that 
the process the House is using--and by the way, this deeming the bill 
passed seems to be a very curious way of trying to pass legislation of 
this consequence, which literally impacts one-sixth of our economy and 
literally impacts every American in a very personal way--is meant to 
somehow divorce themselves from the accountability or the 
responsibility that comes with voting for this in the House; therefore, 
they are going to use this deeming provision that would essentially 
pass this bill without having to have a recorded voted on it? By the 
way, I find that incredibly ironic for a legislative body, which is 
supposed to be about debating and voting on legislation.
  But let's assume that happens and they pass the Senate bill and then 
attach this reconciliation vehicle, which both my colleagues have 
referred to. Then it comes over here and these points of order that 
have been raised against the bill, which the Senator from Texas and the 
Senator from New Hampshire have both referred to--the Byrd point of 
order and this section 310(g), if that point of order is raised and the 
Chair sustains it, I guess--or essentially validates that is a valid 
point of order--there would be a motion to waive it. But this point of 
order on this extraneous Social Security provision that could be raised 
against the bill would sink the bill entirely, as I understand what the 
Senator from New Hampshire is saying. This other--the Byrd rule point 
of order--would punch holes in it, but it would, in any case, have to 
go back to the House of Representatives.
  So if you are a Member of the House of Representatives, the best you 
can hope for is that you are going to get a bill back to the House that 
has a lot of provisions you cared about knocked out. The worst is that 
it might completely tube that process in the Senate, if this point of 
order, the Social Security point of order that could be raised against 
it, is actually not waived by the Senate. Our Republican Senators--41 
of us--have signed a letter saying we will oppose waiving points of 
order that are raised against the reconciliation bill when it gets to 
the Senate.
  I guess my question for my colleagues is: Under that type of 
scenario, what happens next? Do the House Members who are going to be 
voting for this, assuming the Senate will fix all these things, then 
have to have that bill come back? Is there any way in which all these 
fixes that they hope are going to be eventually attached to the Senate-
passed bill will be attached or that these things they hope to fix in 
this bill are going to be fixed?
  It seems to me it is very curious that they are betting on the come, 
so to speak, and trusting the Senate to fix these things and that is an 
incredible leap of faith.
  Mr. CORNYN. I think the Senator explained it very clearly. Put in 
this larger context, can you imagine being asked to cast a career-
ending vote because the people in your district hate this bill. Yet you 
are following Speaker Pelosi's instructions to vote for it and defying 
the wishes of your constituents. Can you imagine doing it in the 
context where there is so little certainty as to the outcome because of 
this reconciliation process and the Byrd rule and the points of order 
we have talked about.
  Put that also in the larger context that the Senator mentioned of the 
deeming of the bill passed. I think that is clearly unconstitutional. 
Have you ever heard of a bill becoming law that wasn't passed by the 
House and the Senate? There have been legal scholars who have written 
this is clearly unconstitutional. I imagine there is going to be 
months, perhaps years, of litigation, possibly even going to the U.S. 
Supreme Court, challenging this bizarre ``Alice in Wonderland'' 
procedure known as deeming the bill passed. Have you ever heard of such 
a thing?
  Mr. GREGG. The concept where you would take the most important piece 
of legislation dealing with domestic policy in this country in the last 
50 years and not vote on it is an affront to the purpose of a 
constitutional democracy. We are sent to the Senate to vote on a lot of 
issues and a lot of them not quite as significant as this one. But if 
you have the most significant issue you are going to possibly ever have 
before you, certainly in my career, you would expect that you would 
want to vote because you would want to express yourself.
  I mean, why did you run for this job? Why did you want to serve your 
constituents if you were not willing to stand on something of this 
importance?
  The ACTING PRESIDENT pro tempore. The hour of 10:10 has arrived.
  Mr. GREGG. I thank the Chair, and I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from Pennsylvania.

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