The Last House Vote Is Just the Beginning of Reconciliation

Nancy Pelosi pulled it off: she got 219 House Democrats to pass the Senate's health-care-reform bill and, with the stroke of President Obama's pen, health care-reform will move from bill to law.

Except, not quite. While the House vote is a giant step forward—without it, health-care reform would be dead—it is by no means the last vote. The Senate still has one more task ahead of it: passing the reconciliation sidecar that the House also passed tonight with 220 votes. Without it, the Senate bill—the one that they passed eons ago in December—would remain the law of the land.

Without the reconciliation sidecar, you have a markedly different piece of legislation, particularly in terms of affordability. The sidecar has a number of really significant changes to the Senate bill that put the bill somewhere in between the two bodies' proposals. It's a bill that has a smaller price tag than the Senate bill—$875 billion over 10 years, compared with $940 billion from the Senate—but provides stronger subsidies to lower incomes. How exactly do you get more subsidies from fewer funds? You have Americans chipping in more: the reconciled version of health care would add a new 3.8 percent tax on unearned income (things like interest, dividends, and royalties) as well as up the Medicare tax for families making more than $250,000 (and individuals with incomes of more than $200,000).

This tax also allowed Obama to scale back another, more controversial source of health-care funding: the so-called Cadillac Tax. He turned it into more of a Maserati tax, upping the threshold for taxable, individual plans from $8,500 to $10,200 and pushing back implementation to 2018. In the bill the House just deemed into law, the tax would start at $8,500 and begin in 2013. The excise tax had been a sticking point for unions throughout the debate.

The reconciled bill has stronger subsidies to the Senate bill. One of the biggest gripes about the Senate bill, particularly from more liberal members of Congress, was that it didn't go far enough to make health care affordable. A family of four at 150 percent of the federal poverty of line (about $33,000) could potentially be on the hook for up to 10 percent of their income just to pay for premiums alone. Writing on the Senate bill back in November, January Angeles and Judith Solomon note, "Modifications are needed at some point as the legislation moves forward to ensure that near-poor families and individuals do not face insurance premiums and cost-sharing charges that many of them could have difficulty affording." The reconciliation bill is that modification.

The Senate Democrats have made an implicit agreement to pass the reconciliation sidecar. Earlier this weekend, Sen. Harry Reid reassured House Democrats that he has the 51 votes necessary to do so (he would not, however, provide the names of those 51 senators). But it's not as simple as rounding up the votes and taking to the floor. The Republicans have the opportunity to raise objections to anything that they believe could be in violation of the Byrd Rule. Named for West Virginia Sen. Robert Byrd, the rule stipulates that legislative changes made under reconciliation are strictly budgetary (why, incidentally, Stupak has tried to introduce his stricter abortion language through an entirely different legislative vehicle). House Democrats say they scrubbed the reconciliation sidecar for any possible violations, but Republicans aren't so certain: they're scouring the bill for any potential violations. And if they find one, and the Senate parliamentarian agrees, the bill gets sent back to the House for another vote, delaying an already drawn-out vote.

In other words, there are still a whole lot of opportunities for Republicans to shape the future health-care-reform bill, attempt to make it more like the Senate-passed bill than the reconciled version that both houses of Congress have agreed to. When the Republican leadership asked for the opportunity to have input though, I've got to doubt that this is what he had in mind.