Why The U.S. Senate Parliamentarian Could Become A Household Name In 2021

Even though Democrats just took the helm in Congress and the White House, the clock is already ticking, and 2021 is shaping up to be a critical year for the party. History teaches us that the majority parties tend to lose control over one of the houses of Congress during the midterms following the election. It is assumed that the proposed stimulus package and a desire to implement an ambitious agenda will kick off day one and be implemented during the first 100 days.

The Democrats have the slimmest majorities in modern history; an 11-person majority in the House of Representatives, and a 50-50 Senate (the two Independents caucus with the 48 Democrats) and Vice-President Kamala Harris breaks any ties. Because there was not a “blue wave” in the 2020 election, Democrats are going to have to be strategic to get the recently proposed $1.9 trillion stimulus and the rest of the agenda operationalized.

The question du jour is what are the paths to accomplish the agenda? 

With such a narrow margin, Democrats face limited choices. Senate Majority Leader Schumer could negotiate with Senate Republicans to use the conventional legislative process to achieve the 60-vote margin necessary to move the legislation through the Senate. But there are perils, as it seems that the formalities of the rules of the Senate will be at the forefront. For example, right now agreement but no formal organizing resolution under which Senator Schumer is majority leader of the Senate and the committees chaired by the Democrats.   

To be sure, with the necessity of additional funding, the conventional route is not impossible. Using this route would allow Democrats to enact priorities like payroll tax increases. But the measures with common support (e.g., $600 stimulus checks) were enacted in December. The more contentious items were shelved and are now included in the $1.9 trillion stimulus package. The advantage of the conventional process is that items like payroll tax increases, raising the minimum wage, or extending the eviction/foreclosure moratoria could be effectuated. Whether Leader Schumer could garner 10 Republican votes is unknown. 

Alternatively, the Democrats could change the rules for the filibuster. Without a filibuster, the conventional legislative process could be employed using a simple majority. While talk of “nuking” the filibuster emerged during the last campaign cycle, some Democratic senators oppose this option. Right now, it is not out of the question for the filibuster to be changed, but there is a more direct course. 

Democrats could use the filibuster-proof budget reconciliation process to enact the $1.9 trillion stimulus and a second bill to address other priorities like climate, healthcare, and infrastructure. If this sounds familiar, it is. When the Republicans took control of the Senate, House, and Executive after the 2016 election, there were two reconciliation bills. The first bill was used to unsuccessfully repeal the Affordable Care Act (“ACA”), and the second bill was used to successfully overhaul the tax code through the Tax Cuts and Jobs Act. 

The Democrats seem to be planning a similar approach. House Speaker Nancy Pelosi has said a first reconciliation bill will combine pandemic relief with ACA improvements. A second bill later in 2021 would combine priorities or other needs, much of which is still unclear right now. Each bill would be limited, however, in that it must not increase the deficit outside the 10-year budget window.

To implement such massive spending involves a two-step process. First, a budget would need to be passed, which could have its own challenges. Only after the budget, whether pro forma or actual, would we see a reconciliation bill. 

The real question will be how much of the first reconciliation bill would be paid for with tax increases. For example, will the Biden Administration push to increase the statutory corporate income tax rate? Given the desire to move quickly and avoid too much red tape, the proposed stimulus bill likely will be stand alone.   Treasury Secretary Yellen echoed the approach of stimulus first and raising tax rates later during her confirmation hearing.

As President Biden has outlined, tax increases will be saved for the second, presumably, non-stimulus bill to pay for the priority spending, with little, if any, in a stimulus bill. The second reconciliation bill is anticipated to deal with big social goals like climate change, infrastructure, education, or ACA reform. Most observers point out the limitations to the reconciliation process. Items like higher minimum wage would be a challenge to make it through the Byrd Rule. These items are ruled on by the Senate Parliamentarian.

In 2016, Sam Wice said that “the most powerful person in America” in 2017 would be the Senate Parliamentarian, the nonpartisan official who would “determine” how much of the Republican agenda could pass through reconciliation. The same would be true if Democrats use the reconciliation process to advance their agenda. For the Parliamentarian to rule favorably, there would be significant tax increases for legislation to pass the Byrd Rule.   

As President Biden enters his first 100 days, Democrats have both an ambitious domestic agenda and a desire to enact additional stimulus to support the economy during COVID-19. Whether they have the means to enact these measures remains to be seen.