Reconciliation seen as main hurdle for conference talks

When Democratic leaders of the Budget committees return next week to shepherd the budget resolution to final passage, budget watchers expect the toughest issue to work out will be whether to include reconciliation instructions in the spending plan to get around a Senate filibuster.

"This will be the trickiest part of the negotiations," said Jim Horney, who served as deputy Democratic staff director on the Senate Budget Committee from 2001 through 2004 and is now director of federal fiscal policy at the Center on Budget and Policy Priorities. The House and Senate passed their respective budget resolutions this month before leaving for the spring recess, and staff discussions are ongoing ahead of conference talks, according to a senior Democratic aide. Conferees could be named as early as next week.

While the Senate resolution does not include reconciliation instructions, the House resolution has them for healthcare reform and education legislation. Reconciliation only requires majority support, which enables those employing it to avoid Senate filibusters. Rich Meade, former House Budget Committee chief of staff under former Rep. Jim Nussle, R-Iowa, said reconciliation is a good example of how process issues are notoriously difficult to iron out. "In dealing with these process issues, it is really hard to find a middle ground," said Meade, now a managing director with BSKH & Associates. "Often times the most intense discussion we would have on budgets and conference reports revolved around process rather than the numbers."

Both experts said that Democratic conference committee leaders, House and Senate Democratic leadership and the White House will be involved in the negotiations to ensure that the final resolution passes. "Failure is not an option," Meade said. Democrats will carefully count votes to make sure that they can pass the resolution, especially in the Senate. During debate, Democrats sometimes joined with Republicans in voting in favor of GOP-sponsored amendments, including one proposal, which passed 67-31, that would prohibit the use of reconciliation for a cap-and-trade bill. On another amendment, 11 Democrats voted with all Republicans to raise the cap on estate taxes. More broadly, Meade said, Democrats want very much to avoid a close vote.

Another issue to iron out is the level in nondefense discretionary spending. The House bill would provide for $532.6 billion, whereas the Senate bill calls for $525 billion. One way that conferees could resolve the matter would be to split the difference, Meade and Horney said. Both resolutions include deficit-neutral reserve funds for healthcare reform, energy and education -- three pillars of President Obama's agenda -- leaving it up to the committees of jurisdiction to draft legislation on matters such as a cap-and-trade program to limit greenhouse gas emissions.