As Democrats try to guide their colossal social spending plan through rounds of intraparty and bicameral fights, they must also mind the Senate’s rules referee — who has the power to strip out a handful of their biggest priorities.
President Joe Biden's party is using the filibuster protections of the budget in an attempt to unilaterally usher in historic tax increases and investments in health care, climate change and more. But relying on that reconciliation process allows the Senate’s nonpartisan rules arbiter, known as the parliamentarian, to throw wrenches into Democrats’ painstakingly built policy machine.
The parliamentarian underscored the power of the chamber's rules to clip Democratic ambitions on Sunday night, ruling against the majority party's bid to include immigration reform in its social spending bill. That isn't the only call Democrats are anxious about getting: They'll likely also need parliamentarian approval to include provisions on labor, clean energy and drug pricing in their party-line bill. The Senate Budget Committee declined to comment about their strategy for winning those go-aheads.
What the parliamentarian lets stay or forces out of the multitrillion-dollar measure could have enormous consequences for its ultimate success and Biden’s legacy. And the referee has stymied Democrats’ plans before, most notably when she ruled out a minimum wage hike for a coronavirus aid bill they passed earlier this year using reconciliation.
Here are four more issues to watch for parliamentarian decisions on as the legislation takes shape:
A boost for organizing efforts: With their signature legislation overhauling federal labor law and promoting unions stuck in the Senate, Democrats are eyeing an insertion of parts of that bill into their social spending package. Those policies include allowing the National Labor Relations Board to impose new penalties on employers for a range of unfair labor practices.
Proponents of the measure argue that there’s precedent for including new fines in a bill passed using reconciliation, including a 1993 budget bill that allowed a penalty on cigarette manufacturers that imported too much tobacco. More recently, the parliamentarian allowed Republicans to defang the insurance mandate in the Affordable Care Act by reducing the penalty to zero.
“They went from something to nothing,” said David Madland, a senior fellow at the liberal Center for American Progress. “If you did that you could do the opposite.”
Republicans, however, say that the new monetary fines don’t meet the parliamentarian’s standards because they amount to a rewriting of federal labor law.
Michael Lotito, co-chair of the Workplace Policy Institute at Littler Mendelson, which advocates on behalf of employers to Congress and federal agencies, said the debate will come down to “whether or not it’s really designed, despite the fact that they put some lipstick on it, as a fundamental policy change.”
Drug pricing and the private sector: Democrats’ hopes of raising hundreds of billions of dollars in federal savings through prescription drug price negotiation is also in question amid reports that Republican senators may challenge a key provision.
House and Senate progressives are muscling through a plan that would empower Medicare to negotiate drug prices, penalize drug companies that raise prices faster than inflation and apply both policies to private insurance plans as well — including for people on the Obamacare exchanges and who get their insurance through work. Yet that last group may run afoul of the parliamentarian's rules, with some lawmakers questioning if lowering drug prices and capping price hikes in commercial markets has a sufficient direct impact on federal spending.
Businesses and lawmakers are already sounding the alarm on the possible consequences of excluding people on employer-based health insurance. They fear that if the parliamentarian nixes that provision, drug companies will raise prices for employer plans to make up for what they lose once Medicare starts paying less.
“That would be extremely worrisome,” said Rep. Peter Welch (D-Vt.), a House leader of the push, in an interview. “Our private employers and their workers currently pay through the nose for health care, so we really need to succeed in lowering drug prices not just for Medicare but for the private sector as well.”
Advocates for the broader effort argue that the federal government subsidizes private plans, so anything that lowers overall costs would save taxpayer dollars.
Forcing utilities to prioritize clean power: A core part of the Democratic climate plan is also headed for a showdown with the parliamentarian. Designed by Sen. Tina Smith (D-Minn.), the Clean Electricity Performance Program pays utilities for steadily ramping up their clean energy sources while penalizing those that fail to do so.
Republicans may try to ax certain provisions within the program by claiming they violate reconciliation rules. For example, the program's design would restrict how utilities could spend the federal payments, requiring them to use the cash in areas such as direct assistance to consumers, worker retention and clean energy investments. Such limitations, some Republicans argue, don’t directly affect federal revenues and therefore should be tossed, a move that could sap the political upside of the whole endeavor.
Democrats are confident about the parliamentary survival of the clean electricity program, which was specifically developed to comply with budget rules. An independent report commissioned by two environmental groups found the policy would add 7.7 million new jobs and add nearly $1 trillion to the economy by 2031.
“The reasons why it is structured the way it is, is to conform to those rules and make sure this is largely about math and not overtly setting policy,” Sen. Martin Heinrich (D-N.M.) said in July.
Worker protections for paid leave: Democrats have already pared down their dreams for worker protections in the package in an attempt to head off last-minute problems with the parliamentarian. But even their fallback strategy might not fly.
Party leaders are working to include a paid family and medical leave program under the spending package. Ensuring employers can’t fire workers for taking that leave is tricky to achieve under the budget rules, though.
The leave proposal House Democrats rolled out this month would not include job protections, except as a condition of grants to employers and for workers already covered by existing federal law. That means about 40 percent of U.S. workers would have no guarantee that their job would be waiting for them when they return from paid leave. And the parliamentarian might still strike down the protections House lawmakers have tied to the grant funding.
“Part of the challenge of dealing with this is we have very different procedural rules than does the House,” Senate Finance Chair Ron Wyden (D-Ore.) said of the paid leave language in an interview.
Alice Miranda Ollstein, Jennifer Scholtes, Eleanor Mueller, Brian Faler and Rebecca Rainey contributed to this report.
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