Published January 2, 2018
With tax reform behind them and a congressional-election year just begun, Republicans in Washington seem remarkably uncertain about what they want to do with their control of the presidency and Congress at this point. There is no clear next major item on the to-do list, and there have been some odd public disagreements about the shape of the agenda.
Both President Trump and Speaker Ryan have talked at various points lately about wanting to take up welfare reform. Trump and some congressional Republicans (especially some more moderate Republican senators) have talked about trying for an infrastructure bill—perhaps with some bipartisan support. Ryan and some congressional Republicans (especially some more conservative House members) have talked broadly about “entitlement reform,” though it has never been entirely clear if this is another way of saying welfare reform or a way of gesturing toward Medicare and Social Security. Some on the right (especially those not facing elections anytime soon) have also talked about giving health care another try—and a fair amount of work has been done behind the scenes to get a legislative vehicle into shape in case that happens. Meanwhile, Senate Majority Leader Mitch McConnell has been running around Washington with a bucket of cold water, publicly insisting that almost none of this can happen and that Republicans should just spend the election year touting the tax bill they passed.
This is normally how people would be talking about what to do once some major ongoing effort that could take all year is finished, not what to do right now when looking at a bare agenda. So what’s going on here? What do these different options really consist of? And which path is most likely to be followed?
I think the answers to these questions depend on the answer to another question that has not been getting nearly as much journalistic attention but that is likely soon to be resolved: Will congressional Republicans pursue a budget-reconciliation process in this coming year or not?
On the face of things, it would seem pretty obvious that they should and will. The reconciliation process—which is a way of advancing budget-related legislation that enables it to pass with 50 rather than 60 votes in the Senate—is what allowed Republicans to pass their tax-reform bill and what gave them any chance of passing a health-care bill. They could immediately launch into a 2019 budget resolution that would give them another 50-vote opportunity to pass some major bill this coming year, and it’s hard to see how they pass much that’s significant otherwise.
But as a practical matter, the reconciliation process has for some time now been pretty much distinct from the actual budget and appropriations process on the Hill. This is evidenced, for instance, by the fact that although Republicans passed two budget-reconciliation bills last year (technically one was for 2017, and was used to start the legislative process on health care, and one was for 2018 and used for tax reform) they never did get their appropriations work done for the year and they now need to pass a bipartisan spending bill to avoid a government shutdown.
That spending bill, which is now being negotiated among congressional Republicans and Democrats and the White House, could turn out to establish some budget caps for the next two fiscal years, as a way to avoid having to go through another shutdown crisis in an election year. If it does that, it would pretty much make a formal budget process for 2019 unnecessary, effectively allowing the appropriators to do their work without a budget resolution. The formal incentives for advancing a reconciliation bill would disappear.
Republicans could still advance such a bill anyway, just to create an opportunity for partisan legislation. But it would be no easy thing to get House and Senate Republicans to agree on the shape of such a bill, especially with just 51 Republicans in the Senate. And if a bill isn’t even formally necessary, the case for going through that pain grows weaker, particularly for those in the congressional leadership who don’t have strong policy ambitions to begin with.
This question of whether there will be a 2019 reconciliation bill is crucial to the question of the 2018 Republican agenda because it would establish the boundaries of the possible. If they do pass a reconciliation bill, Republicans would probably use it to create room for a party-line welfare-reform effort. This would likely amount to a proposal for devolving funding and design flexibility over some of the major federal welfare programs to the states while attaching some work requirements to most of them. Paul Ryan proposed an approach like this in 2014, and that general idea is what I take people in Congress and the administration to be talking about when they raise the prospect of welfare reform. I don’t know that it could actually get 50 Senate votes, but it’s possible, and would be a plausible use of the reconciliation process.
Such a bill could also create space for a return to health care if Republicans decided during the year that things were ripe for that. This would fit right into the framework of their welfare approach, since a return to health care would involve some form of the Graham-Cassidy bill, which does in health care what Ryan’s proposals would do in welfare: It would package the money Washington now spends on Obamacare subsidies and Medicaid and let states use those funds as they see fit to provide access to coverage for their residents, with a few general conditions and protections.
If there is to be a reconciliation bill, I think this is the set of issues it would put front and center. Fiscally vital though they are, Medicare and Social Security reforms don’t actually seem to be on anyone’s radar at this point.
If there is no reconciliation bill, however, then neither welfare reform nor a return to health care on any serious scale would be possible. At that point, the most logical major legislative package to pursue this year would be some kind of infrastructure bill, presumably beginning from the proposal the administration has been working on and then moving to the right in some areas to satisfy House Republicans and to the left in others to get some Democratic votes in the Senate. The chances of such a bill coming together and garnering 60 Senate votes are not great, but neither are the chances for a partisan reconciliation bill to reform welfare in a 51-vote Republican Senate. And those seem like the two most plausible sets of options for big-ticket 2018 legislation.
Either way, there will probably also be some smaller bills on the move: a farm bill, CHIP reauthorization, maybe a modest bipartisan higher-education bill, maybe a bipartisan banking bill, and maybe some Senate votes on immigration and abortion-related bills the House has already passed (to make life difficult for some red-state Democrats up for re-election). Some of these things could even pass.
But the core question, the question that will determine the heart of the legislative agenda, is which big-ticket path will be attempted, and that in turn rests on the question of whether there will be a 2019 reconciliation process. The ultimate answer to that question seems likely to be a product of the talks now beginning over a spending deal, even if the 2018 agenda is not explicitly on the table in those talks. If (as seems plausible) a bipartisan spending agreement is reached this month that establishes two-year spending levels or caps, I think it becomes fairly likely that there will be no 2019 reconciliation bill and so no welfare-reform bill and no return to health care.
One man’s hunch, anyway.
Yuval Levin is the Hertog Fellow at the Ethics and Public Policy Center.