March 15, 2025 • 26 mins
Newt describes the complex process of reconciliation in the United States Congress. Reconciliation, established by the Congressional Budget and Impoundment Control Act of 1974, is a crucial tool for managing government spending, allowing certain tax, spending, and debt limit legislation to bypass the Senate filibuster with a simple majority vote. Newt discusses the intricacies of the reconciliation process, the challenges of passing appropriations bills, and the frequent use of continuing resolutions to prevent government shutdowns. He highlights the political dynamics and strategic maneuvers involved in passing a budget and reconciliation bill, emphasizing the importance of these legislative actions for the current administration and the Republican Party's future electoral prospects. He also describes public sentiment towards government spending and the need for significant reforms to address perceived corruption and inefficiency in the federal bureaucracy.
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Speaker 1 (00:04):
On this episode of news World, we're really going to
talk about the whole process of reconciliation, why it's so complicated,
how it's evolved, and as you watch it play out
in the next couple months, which you can expect and
look for. Reconciliation is a central tool to try to
(00:33):
get some control over spending. It was originally created with
the Congressional Budget and Impoundment Control Act of nineteen seventy four,
and it allows for special consideration of certain defined tax
spending and debt limit legislation. Now, part of the reason
this was necessary is that the Senate, which was designed,
(00:56):
as President George Washington put it to be the cooling
saucer to the hot cup of coffee from the House,
has a set of rules that make it so hard
to pass anything that if you want something big, it
helps to have a device to get things through. And
that's what reconciliation is. Let me explain further. In the Senate,
(01:19):
you have to have sixty votes to be able to
bring something up to pass it. Now, when you have
a part it is an issue. Neither party has had
a sixty vote majority, and so people can stop things,
cause confusion, demand specific changes and they came up with
(01:39):
the idea of a reconciliation process so that you could
actually bring it to the floor. And it's the one
thing which cannot be full of bustered, so it only
takes a simple majority or a tie vote and the
Vice President. That's why it becomes so central. And over
time what's happened is the House sent have learned to
(02:01):
dump everything they can into a reconciliation bill because it's
the one thing you can try to force through the Senate.
And that's throughly the background of this and that's why
it works. Now, in theory, we ought to have a simple,
clear process of appropriations and everything which is spent by
the government should be appropriated, which means that the Appropriations
(02:23):
Committee writes a bill, let's say, for the Defense Department,
sends it from the House to the Senate. They meet,
they come up with a single bill which is then
voted on by both the House and the Senate. It
then goes to the President to get signed. Now, that's
the way it should work, and they should get it
(02:44):
all done before the end of the fiscal year, so
that when they enter the new fiscal year, which is
October first, At that point you're supposed to have passed
all the appropriations bills, well, almost nobody gets it done
for a lot of different reasons. It's very hard hard
to do. People are fighting over the amount of money.
The very process of legislation is cumbersome and filled with
(03:06):
all sorts of loopholes that slow you down and require
you to do things. So when you don't have all
the appropriations bills done, you then have what's called a
continuing resolution. Now, the continuing resolution basically says normally, we're
going to continue to spend at the rate of last year.
If you want to spend more money, put some pressure
(03:28):
to try to adopt to appropriations. That's to get them done.
But generally speaking, the use of a continuing resolution has
been ongoing now for several decades. The challenge hair is
really simple. You want to get a continuing resolution outmemror.
It takes sixty votes in the Senate and you have
to have the votes in the House. So both sides,
(03:48):
both Democrats and Republicans, figure out ways to basically charge
a fee. You want to get this done, then I
want something from my side, and so you get a
very difficult, very tense negotiations and It then leads to
potentially shutting down the government because theoretically, if you do
not have a appropriations bill and you do not have a
(04:11):
continuing resolution, there is no money. Now again, in the
nature of the American system, they find ways to wriggle
around this, and so the Defense Department, the police, people
who matter for public safety somehow get funded even when
they're not funded. But this puts real pressure on the Congress.
And that's why routinely two or three or four times
(04:33):
a year you'll see stories about is the government going
to shut down? Well, even if it does shut down,
everybody gets paid while they're not working. Then it reopens,
so it's not a crisis. But it just makes everything
very complicated. So the first thing we're looking at is
can they get through a continuing resolution to keep the
(04:54):
government open, and that has to go through both the
House and the Senate. Second, once you have gotten past
that challenge, you have to pass a budget. And the
House recently, and I wrote about this as sort of
a miraculous event. The House, which has no margin on
the Republican side, I mean they're down to having a
(05:15):
two or three vote margin, and they have one member
from Kentucky, who will always vote no and is totally hopeless.
So they really have the tiniest of margins. And they
had to pass a budget. And this was really important
psychologically because both President Trump and Speaker Johnson want to
(05:36):
pass one big reconciliation bill which would have money for
the border, but it would also have money for the
tax cuts and would have a large number of changes
to save money. And they put together a budget and
they brought it up, and at first Johnson thought he
did not have the votes. He thought he was three
(05:57):
votes short, and so he told the members go on home,
we're not going to be able to vote today. Ten
minutes later they called back and said, whoops, come on
back in because in the interim Johnson, who had done
an amazing job and had gotten the first two hundred
and thirteen or two hundred and fourteen yeses, Trump stepped
in and got the last three literally by phone calls
(06:20):
while they were trying to decide whether or not to
move forward. So now the House has passed a budget,
and they'll come back to why that's important in just
a minute. It's now over on the Senate side, and
it gets trickier there, both because under the Senate rules,
the budget takes sixty votes. The Democrats aren't inclined to
be cooperative. They want to add some things, but anything
(06:42):
you add, if it has to come back to the House,
it's very hard to see how Johnson can pass it.
So they'll have a very tough time getting something out
of the Senate. If it's significantly different from the House,
they'll have a very tough time negotiating it and getting
down to a single comment budget resolution. Now, at that point,
(07:02):
the reason this matter is is under the Congressional Budget Act,
it is the budget which establishes the overall plan, sets
the guidelines on spending and revenue, and at that point
you trigger the reconciliation Bill. Now, if you think about it,
reconciliation is a very useful practical term. What it means
(07:23):
is that you have to reconcile the budget has passed
with current law. So let's say that the budget has
passed says we're going to spend a billion dollars on
going into space, but current law says we're going to
spend three billion dollars going into space. Now you have
to reconcile. And the principle is that the budget takes precedent.
(07:46):
So you've got to find a way to cut the
two billion dollars in order to have reconciled current spending
with the budget. And that becomes a very very complicated process.
If they're lucky, if they can get it done, he'll
take two or three months to negotiate the scale of
change that they want, because, to his credit, Speaker Johnson
(08:07):
has picked up the sentiment of President Trump and the
desire of the people who elected President Trump to achieve
real change. And so they have produced a budget which
is going to require dramatic real change. Now there's one
more piece of this, just to sort of add to
the complexity. Reconciliation is defined in the Senate by what
(08:31):
is called the Bird Rule. Bob Bird of West Virginia
was the Majority Leader and then the Appropriations chairman. I've
served with him. He was one of the smartest and
toughest people in the US Senate in modern times, and
he proposed a rule which basically says you can only
bring up under reconciliation things that relate to money. And
(08:55):
so that means that they can't just dump in every
bill they want and thereby escape having to go through
the process involved with the potential for the Senate to
basically full of buster and stop it. Now the Bird
role then has the parliamentarian deal with is this in
or is this out? Does this effect spending or does
(09:18):
it effect revenues? If it does, then you're allowed to
move forward. If you do more than the budget bill,
you can then be pushed into you're not reconciling to
the budget. So the budget really sets the stage. Then
you think through the reconciliation and you have to word
everything very carefully. Even in the House, you have to
(09:40):
look at everything very carefully in order to make sure
that you fit the bird rule so that it could
be passed with fifty votes plus the vice president. And
that's an enormously complicating problem in terms of what you
can and can't get done. Now. The fact is that
(10:11):
the Congressional Budget and Impoundment Control Act was adopted by
an extraordinarily liberal Congress after Watergate and after the anti
war movement was at its peak, and so they designed
the process i think, to favor spending and to make
it hard to cut taxes, and they set the whole
thing up for that. But the fact is that the
(10:35):
system does work in a complicated, clumbersome way, which is
part of the nature of the American system. And when
you look at it, Congress has passed twenty seven reconciliation
bills since the original Act was adopted, and twenty three
of them became law. President Clinton vetoed three, President Obama
vetoed one. But the fact is, over time we were
(10:59):
able to move very substantial changes by using budget reconciliation. Now,
at this point, what you have to confront is, for example,
the Balanced Budget Act of nineteen ninety seven was a
budget reconciliation bill that set the stage for the only
four balanced budgets in your lifetime. It was a very big,
(11:22):
very important deal. Now, the fact is the system forces
you to work together. Twelve of the first fourteen and
acted reconciliation bills actually occurred even though the presidency, House
and Senate were not controlled by the same party. I
always tell people, for example, that when we won in
nineteen ninety four with the Contract with America, we entered
(11:44):
office as a governing party, and by that I mean
our interest was in getting things done, in finding solutions
and working on something. Knowing that we had a liberal
Democratic president and so we had to negotiate in a
frameworks bill. Clinton would sign it because otherwise it wouldn't
become law. We didn't have the votes to override his veto. Now,
(12:05):
in that setting, we managed to get a lot done.
As I said, we bounced the budget for four times
for the only time in the last hundred years, and
we passed welfare reform. We passed a whole series of things.
But it required having an attitude that we were going
to get positive things done and we're going to focus
on solution. And I think that's a key thing to
remember about this. So you have two things going on
(12:29):
right now. In parallel. You have the current spending law,
which Biden signed in December. It expires on March fourteenth.
So if you are going to try to avoid the
government shutting down, they've got to pass a continuing resolution
to keep the government moving and they've got to get
it all worked out. It's going to be interesting to
(12:50):
see exactly what happens and how it happens. The bill
that came out of the House is a very Republican bill,
and President Trump is in he said on Truth Social Quote.
The House and Senate have put together, under the circumstances
a very good funding bill. All Republicans should vote yes, please,
(13:10):
yes next week. Great things are coming from America, and
I'm asking you all to give us a few months
to get us through to September so we can continue
to put the country's financial house in order. Now that's
the President's version, and we'll see in the next couple
of days what the impact is on the Senate side.
It's clear that on the House side they have to
pass it with only Republican votes. I think they're facing
(13:32):
a different challenge in the Senate and that continuing resolutions
come up under regular order and that means you can
have a fullobuster. So we'll see how they maneuver try
to get this done. I think it will be very
hard for them to come back to the House and
get something. And my personal guess is that what you're
going to see is the House pass a continuing resolution
(13:53):
and go home, so they're not there to negotiate with.
So the Senate either has to vote on what the
House did or allow the government to close, and the
Democrats historically are very opposed to them. However, when the
House version came up, House Minority Leader Jeffreys, in a
letter to Democrats wrote, quote, Republicans have decided to introduce
(14:15):
a partisan continuing resolution that threatens to cut funding for
health care, nutritional assistance, and veterans benefits through the end
of the current fiscal year. That is not acceptable, and
Kim Jeffries, the Leader, and the Democratic Whip Katherine Clark
and the Democratic Caucus Chair Pete aug we Are said
in a joint statement, quote, the legislation does nothing to
(14:37):
protect Social Security, Medicare, and Medicaid while exposing the American
people to further pain throughout this fiscal year. We are
voting now now. The reason that happens is if Speaker
Johnson tried to do something that the Democrats would like,
he would lose a third to half of his own conference, Because,
(14:58):
I mean, Jeffries is not stupid, but if he gets
a chance to negotiate, he's going to ask for a
lot more than Johnson normally could do, and so makes
perfect sense for Jeffries to be currently focused on trying
to stop it. Now. I think that changes when you
get to the reconciliation bill, and I'll explain why in
(15:19):
a minute. But the budget itself and the continuing resolution
both are going to be essentially a partisan. Whether or
not the Budget Reconciliation is partisan, I'm not quite sure yet,
because that's where you're dealing with real change and real issues.
So let me talk for a minute about the politics
of the Budget Reconciliation Act. I had a lot of
experience with this both in the sixteen years when we
(15:42):
were in the minority and I was involved. I mean,
I helped write my first draft budget with David Stockman,
who later on became Director of the Office of Management Budget.
We wrote that in nineteen seventy nine nineteen eighty. We
called it the Budget of Hope and Opportunity, and we're
trying to move in a positive way in ares, which
reflected both Jack Kemp and Ronald Reagan. And it is
(16:04):
sort of the baseline for what we came back to
many years later and passed under the contract with America,
which allowed us to then get to those four balanced budgets.
I've been looking at this sort of thing for a
long time. Here are a couple of key ground boys.
(16:35):
It's very important that the Republicans win the argument about
what is going on. And let me give you an example.
You'll hear a lot about cuts to Medicaid. Well, I
just did some real research last week, and the fact is,
under any circumstance, medicaid spending is going to go up.
(16:56):
In fact, under the worst circumstance, it's going to go
up by one hundred and sixty nine billion dollars over
the next nine years. Now, Washington is the only city
in the country where an increase is a cut, and
that's because the Congressional Budget Office was invented by that
nineteen seventy four radical Congress, and it is designed to
(17:18):
discourage any kind of shrinking government and to encourage higher taxes.
And the Congressional Budget Office invents a fantasy score of
what they think should be spent. They're not elected by anyway.
That's a perfect example of the whole danger of bureaucrats
and the degree to which the system is sick. So
Republicans have to go out and be prepared to go
(17:40):
those to those with the bureaucracy, with the news media,
and with the Democrats, and to say this is an increase.
I may I'd be as big an increase as you
would like, but it's an increase. And we just got
a poll in from the America's New Majority Project which
is very encouraging, in which the American people are very
very very clear that they in fact do not want
(18:04):
to see the government go on with business as usual.
They actually are very very interested in having the government
be in a position where we cut spending, we cut
the bureaucracy, and we are in a position where we
take on these kind of issues. Part of it's because
there's a deep filming. I was actually surprised by this,
(18:25):
but in our recent America's New Majority poll, eighty four
percent of American people, and I want you to check
this against your own beliefs, eighty four percent agree that
we have a corrupt political system. I think about that.
More than eight out of every ten people think that
our system is corrupt. Eighty one percent say this corruption
is a major obstacle to getting America on the right track.
(18:47):
Sixty eight percent, there's little more than two out of
every three say the bureaucracy is a major or significant
part of that corruption, and then fifty seven percent say
the bureaucracy needs a major overhaul. In fact, they believe
the change is so important that if their choice is
to either move quickly, make mistakes and correct them, or
(19:07):
move much more slowly to be careful. Fifty eight percent
say it's better to move quickly and correct mistakes than
to move slowly and potentially have the system not change.
So the point I'm making is the country is ready
for very substantial direct change, and if Republicans go out
and make the argument that in fact, we can have
(19:32):
a better system, we can have a system using, for example,
the make America Healthy approach of Robert F. Kennedy Junior,
which has turned out in the same poll to be
very popular and very acceptable. We have discovered that the
American people believe that you can reduce the growth of
medicaid spending by removing illegal immigrants and requiring able bodied
(19:56):
recipients to work. It's just amazing the consistent patterns. Sixty
eight percent of Americans believe individuals who could work but
choose not to work while receiving safety net benefits are
committing fraud. Seventy eight percent support a work requirement for
safety net programs like Medicaid, food stamps, and income assistance,
(20:16):
and the average American believes that about twenty five percent
of federal spending is lost to fraud. Now, they define
fraud more than just criminal activity, but they certainly are
not sympathetic to the notion that you can't change anything,
you can't cut anything, that we have to go forward blindly.
And that puts the Democrats in a very difficult position
because they're not set up to be participating in taking
(20:42):
apart the machine they built since Franklin Roosevelt came into
office in nineteen thirty three, they have spent almost a
century building this huge, centralized bureaucratic system which gives out
a lot of money to their foundations, their interest groups,
their universities, pays their union members, and so they're sort
of trapped. And yet when you talk to the country
(21:04):
at large, including a very large number of Democrats, I mean,
you don't get to an eighty one percent number without
having virtually all the Republicans, virtually all the Independents, and
a fairly large number of Democrats. So what you have
as an environment which we really haven't seen very often.
And the challenge to the Republicans and this is very hard,
(21:25):
trust me, because when we did it, it was extraordinarily hard.
The challenge is to now take these big ideas and
find solutions that actually will improve services, save money, produce
better outcomes. Now we know it can be done. Look
at everybody who goes online orders from Amazon and has
(21:49):
it delivered within nine hours to three days and just
sees that as normal. Well, the private sector has been
innovating and developing and using technology ways that are amazing
and that have enabled us to be a dramatically more
productive country and a country that is dramatically more capable
(22:09):
of getting things done at lower cost. And yet it's
in that setting that you have people saying no, no,
you can't change anything. And I think that's why we
are seeing the kind of struggle that's underway in Washington today.
I would say that there are three things you should
watch for over the next two to three months as
(22:31):
the reconciliation process moves forward. And I emphasize the next
two to three months because I believe absolutely one hundred
percent this has to be done by late May or June,
because in order for the House Republicans to retain control,
they have to go to the country next year having
been successful. If we have a weak economy in twenty
(22:54):
twenty six, it'll be extraordinarily hard for the Republicans to
keep the House. On the other their hand, if all
the efforts to tax cuts, to deregulation, to getting huge
investments from all around the world to invest in the US.
If all that pays off and we end up with
a good economy next year, it'll be I think, relatively
(23:14):
easy to keep control of the House. So there's a
lot at stake. This requires us, I believe, to get
the Reconciliation Bill done to the President and signed into
law before the fourth of July, so you have six
months for the economy to start speeding up. So you
enter twenty twenty six with a very healthy economy, with
(23:36):
substantial reform in the government, and with a sense that
the President and the House and Senate Republicans are keeping
their work and are getting the job done. That was
the great advantage we had when we ran for reelection.
Remember that when we first won in nineteen ninety four
of the Contract with America, we were the first Republican
(23:56):
majority in forty years. In fact, from nineteen twenty eight
to nineteen ninety four, you had four years of Republicans
and sixty four years of Democrats. That's how big the
difference was. Since we won, people saw that we were serious,
and we passed welfare reform. We began to balance the budget,
(24:16):
we passed tax cuts, who we helped invent Medicare advantage.
So people re elected us in nineteen ninety six. That
was the first time House Republicans had been re elected
in sixty eight years, not since nineteen twenty eight. Since then,
if you start in nineteen ninety four, Republicans have held
the House for twenty two years. Democrats have only held
(24:39):
the House for eight. Now, that's a genuine revolution and
who's in charge in the legislative branch. And we have
a chance next year to extend that. But to extend that,
we have to have a reconciliation bill with huge tax cuts,
with huge deregulation, with kind of fundamental changes needed in
order for this economy to start really moving at the
(25:01):
pace it could. There's no reason we can't have two
or three or four years of five percent economic growth.
That's what Reagan got. And so if we start moving
the right direction, we could actually have a remarkable couple
of years, and we could actually move towards what President
Trump in his speech to the Congress called a golden age.
(25:24):
Thank you for listening. Newsworld is produced by Ginglish three
sixty and iHeartMedia. Our executive producer is Guardzi Sloan. Our
researcher is Rachel Peterson. The artwork for the show was
created by Steve Penley. Special thanks to the team at
Ginglish three sixty. If you've been enjoying Newtsworld, I hope
you'll go to Apple Podcast and both rate us with
five stars and give us a review so others can
(25:47):
learn what it's all about. Right now, listeners of Newtsworld
can sent up from my three free weekly columns at
ginglishtree sixty dot com slash newsletter. I am Newt Gingrich.
This is Newtsworld.
On this episode of news World, we're really going to
talk about the whole process of reconciliation, why it's so complicated,
how it's evolved, and as you watch it play out
in the next couple months, which you can expect and
look for. Reconciliation is a central tool to try to
(00:33):
get some control over spending. It was originally created with
the Congressional Budget and Impoundment Control Act of nineteen seventy four,
and it allows for special consideration of certain defined tax
spending and debt limit legislation. Now, part of the reason
this was necessary is that the Senate, which was designed,
(00:56):
as President George Washington put it to be the cooling
saucer to the hot cup of coffee from the House,
has a set of rules that make it so hard
to pass anything that if you want something big, it
helps to have a device to get things through. And
that's what reconciliation is. Let me explain further. In the Senate,
(01:19):
you have to have sixty votes to be able to
bring something up to pass it. Now, when you have
a part it is an issue. Neither party has had
a sixty vote majority, and so people can stop things,
cause confusion, demand specific changes and they came up with
(01:39):
the idea of a reconciliation process so that you could
actually bring it to the floor. And it's the one
thing which cannot be full of bustered, so it only
takes a simple majority or a tie vote and the
Vice President. That's why it becomes so central. And over
time what's happened is the House sent have learned to
(02:01):
dump everything they can into a reconciliation bill because it's
the one thing you can try to force through the Senate.
And that's throughly the background of this and that's why
it works. Now, in theory, we ought to have a simple,
clear process of appropriations and everything which is spent by
the government should be appropriated, which means that the Appropriations
(02:23):
Committee writes a bill, let's say, for the Defense Department,
sends it from the House to the Senate. They meet,
they come up with a single bill which is then
voted on by both the House and the Senate. It
then goes to the President to get signed. Now, that's
the way it should work, and they should get it
(02:44):
all done before the end of the fiscal year, so
that when they enter the new fiscal year, which is
October first, At that point you're supposed to have passed
all the appropriations bills, well, almost nobody gets it done
for a lot of different reasons. It's very hard hard
to do. People are fighting over the amount of money.
The very process of legislation is cumbersome and filled with
(03:06):
all sorts of loopholes that slow you down and require
you to do things. So when you don't have all
the appropriations bills done, you then have what's called a
continuing resolution. Now, the continuing resolution basically says normally, we're
going to continue to spend at the rate of last year.
If you want to spend more money, put some pressure
(03:28):
to try to adopt to appropriations. That's to get them done.
But generally speaking, the use of a continuing resolution has
been ongoing now for several decades. The challenge hair is
really simple. You want to get a continuing resolution outmemror.
It takes sixty votes in the Senate and you have
to have the votes in the House. So both sides,
(03:48):
both Democrats and Republicans, figure out ways to basically charge
a fee. You want to get this done, then I
want something from my side, and so you get a
very difficult, very tense negotiations and It then leads to
potentially shutting down the government because theoretically, if you do
not have a appropriations bill and you do not have a
(04:11):
continuing resolution, there is no money. Now again, in the
nature of the American system, they find ways to wriggle
around this, and so the Defense Department, the police, people
who matter for public safety somehow get funded even when
they're not funded. But this puts real pressure on the Congress.
And that's why routinely two or three or four times
(04:33):
a year you'll see stories about is the government going
to shut down? Well, even if it does shut down,
everybody gets paid while they're not working. Then it reopens,
so it's not a crisis. But it just makes everything
very complicated. So the first thing we're looking at is
can they get through a continuing resolution to keep the
(04:54):
government open, and that has to go through both the
House and the Senate. Second, once you have gotten past
that challenge, you have to pass a budget. And the
House recently, and I wrote about this as sort of
a miraculous event. The House, which has no margin on
the Republican side, I mean they're down to having a
(05:15):
two or three vote margin, and they have one member
from Kentucky, who will always vote no and is totally hopeless.
So they really have the tiniest of margins. And they
had to pass a budget. And this was really important
psychologically because both President Trump and Speaker Johnson want to
(05:36):
pass one big reconciliation bill which would have money for
the border, but it would also have money for the
tax cuts and would have a large number of changes
to save money. And they put together a budget and
they brought it up, and at first Johnson thought he
did not have the votes. He thought he was three
(05:57):
votes short, and so he told the members go on home,
we're not going to be able to vote today. Ten
minutes later they called back and said, whoops, come on
back in because in the interim Johnson, who had done
an amazing job and had gotten the first two hundred
and thirteen or two hundred and fourteen yeses, Trump stepped
in and got the last three literally by phone calls
(06:20):
while they were trying to decide whether or not to
move forward. So now the House has passed a budget,
and they'll come back to why that's important in just
a minute. It's now over on the Senate side, and
it gets trickier there, both because under the Senate rules,
the budget takes sixty votes. The Democrats aren't inclined to
be cooperative. They want to add some things, but anything
(06:42):
you add, if it has to come back to the House,
it's very hard to see how Johnson can pass it.
So they'll have a very tough time getting something out
of the Senate. If it's significantly different from the House,
they'll have a very tough time negotiating it and getting
down to a single comment budget resolution. Now, at that point,
(07:02):
the reason this matter is is under the Congressional Budget Act,
it is the budget which establishes the overall plan, sets
the guidelines on spending and revenue, and at that point
you trigger the reconciliation Bill. Now, if you think about it,
reconciliation is a very useful practical term. What it means
(07:23):
is that you have to reconcile the budget has passed
with current law. So let's say that the budget has
passed says we're going to spend a billion dollars on
going into space, but current law says we're going to
spend three billion dollars going into space. Now you have
to reconcile. And the principle is that the budget takes precedent.
(07:46):
So you've got to find a way to cut the
two billion dollars in order to have reconciled current spending
with the budget. And that becomes a very very complicated process.
If they're lucky, if they can get it done, he'll
take two or three months to negotiate the scale of
change that they want, because, to his credit, Speaker Johnson
(08:07):
has picked up the sentiment of President Trump and the
desire of the people who elected President Trump to achieve
real change. And so they have produced a budget which
is going to require dramatic real change. Now there's one
more piece of this, just to sort of add to
the complexity. Reconciliation is defined in the Senate by what
(08:31):
is called the Bird Rule. Bob Bird of West Virginia
was the Majority Leader and then the Appropriations chairman. I've
served with him. He was one of the smartest and
toughest people in the US Senate in modern times, and
he proposed a rule which basically says you can only
bring up under reconciliation things that relate to money. And
(08:55):
so that means that they can't just dump in every
bill they want and thereby escape having to go through
the process involved with the potential for the Senate to
basically full of buster and stop it. Now the Bird
role then has the parliamentarian deal with is this in
or is this out? Does this effect spending or does
(09:18):
it effect revenues? If it does, then you're allowed to
move forward. If you do more than the budget bill,
you can then be pushed into you're not reconciling to
the budget. So the budget really sets the stage. Then
you think through the reconciliation and you have to word
everything very carefully. Even in the House, you have to
(09:40):
look at everything very carefully in order to make sure
that you fit the bird rule so that it could
be passed with fifty votes plus the vice president. And
that's an enormously complicating problem in terms of what you
can and can't get done. Now. The fact is that
(10:11):
the Congressional Budget and Impoundment Control Act was adopted by
an extraordinarily liberal Congress after Watergate and after the anti
war movement was at its peak, and so they designed
the process i think, to favor spending and to make
it hard to cut taxes, and they set the whole
thing up for that. But the fact is that the
(10:35):
system does work in a complicated, clumbersome way, which is
part of the nature of the American system. And when
you look at it, Congress has passed twenty seven reconciliation
bills since the original Act was adopted, and twenty three
of them became law. President Clinton vetoed three, President Obama
vetoed one. But the fact is, over time we were
(10:59):
able to move very substantial changes by using budget reconciliation. Now,
at this point, what you have to confront is, for example,
the Balanced Budget Act of nineteen ninety seven was a
budget reconciliation bill that set the stage for the only
four balanced budgets in your lifetime. It was a very big,
(11:22):
very important deal. Now, the fact is the system forces
you to work together. Twelve of the first fourteen and
acted reconciliation bills actually occurred even though the presidency, House
and Senate were not controlled by the same party. I
always tell people, for example, that when we won in
nineteen ninety four with the Contract with America, we entered
(11:44):
office as a governing party, and by that I mean
our interest was in getting things done, in finding solutions
and working on something. Knowing that we had a liberal
Democratic president and so we had to negotiate in a
frameworks bill. Clinton would sign it because otherwise it wouldn't
become law. We didn't have the votes to override his veto. Now,
(12:05):
in that setting, we managed to get a lot done.
As I said, we bounced the budget for four times
for the only time in the last hundred years, and
we passed welfare reform. We passed a whole series of things.
But it required having an attitude that we were going
to get positive things done and we're going to focus
on solution. And I think that's a key thing to
remember about this. So you have two things going on
(12:29):
right now. In parallel. You have the current spending law,
which Biden signed in December. It expires on March fourteenth.
So if you are going to try to avoid the
government shutting down, they've got to pass a continuing resolution
to keep the government moving and they've got to get
it all worked out. It's going to be interesting to
(12:50):
see exactly what happens and how it happens. The bill
that came out of the House is a very Republican bill,
and President Trump is in he said on Truth Social Quote.
The House and Senate have put together, under the circumstances
a very good funding bill. All Republicans should vote yes, please,
(13:10):
yes next week. Great things are coming from America, and
I'm asking you all to give us a few months
to get us through to September so we can continue
to put the country's financial house in order. Now that's
the President's version, and we'll see in the next couple
of days what the impact is on the Senate side.
It's clear that on the House side they have to
pass it with only Republican votes. I think they're facing
(13:32):
a different challenge in the Senate and that continuing resolutions
come up under regular order and that means you can
have a fullobuster. So we'll see how they maneuver try
to get this done. I think it will be very
hard for them to come back to the House and
get something. And my personal guess is that what you're
going to see is the House pass a continuing resolution
(13:53):
and go home, so they're not there to negotiate with.
So the Senate either has to vote on what the
House did or allow the government to close, and the
Democrats historically are very opposed to them. However, when the
House version came up, House Minority Leader Jeffreys, in a
letter to Democrats wrote, quote, Republicans have decided to introduce
(14:15):
a partisan continuing resolution that threatens to cut funding for
health care, nutritional assistance, and veterans benefits through the end
of the current fiscal year. That is not acceptable, and
Kim Jeffries, the Leader, and the Democratic Whip Katherine Clark
and the Democratic Caucus Chair Pete aug we Are said
in a joint statement, quote, the legislation does nothing to
(14:37):
protect Social Security, Medicare, and Medicaid while exposing the American
people to further pain throughout this fiscal year. We are
voting now now. The reason that happens is if Speaker
Johnson tried to do something that the Democrats would like,
he would lose a third to half of his own conference, Because,
(14:58):
I mean, Jeffries is not stupid, but if he gets
a chance to negotiate, he's going to ask for a
lot more than Johnson normally could do, and so makes
perfect sense for Jeffries to be currently focused on trying
to stop it. Now. I think that changes when you
get to the reconciliation bill, and I'll explain why in
(15:19):
a minute. But the budget itself and the continuing resolution
both are going to be essentially a partisan. Whether or
not the Budget Reconciliation is partisan, I'm not quite sure yet,
because that's where you're dealing with real change and real issues.
So let me talk for a minute about the politics
of the Budget Reconciliation Act. I had a lot of
experience with this both in the sixteen years when we
(15:42):
were in the minority and I was involved. I mean,
I helped write my first draft budget with David Stockman,
who later on became Director of the Office of Management Budget.
We wrote that in nineteen seventy nine nineteen eighty. We
called it the Budget of Hope and Opportunity, and we're
trying to move in a positive way in ares, which
reflected both Jack Kemp and Ronald Reagan. And it is
(16:04):
sort of the baseline for what we came back to
many years later and passed under the contract with America,
which allowed us to then get to those four balanced budgets.
I've been looking at this sort of thing for a
long time. Here are a couple of key ground boys.
(16:35):
It's very important that the Republicans win the argument about
what is going on. And let me give you an example.
You'll hear a lot about cuts to Medicaid. Well, I
just did some real research last week, and the fact is,
under any circumstance, medicaid spending is going to go up.
(16:56):
In fact, under the worst circumstance, it's going to go
up by one hundred and sixty nine billion dollars over
the next nine years. Now, Washington is the only city
in the country where an increase is a cut, and
that's because the Congressional Budget Office was invented by that
nineteen seventy four radical Congress, and it is designed to
(17:18):
discourage any kind of shrinking government and to encourage higher taxes.
And the Congressional Budget Office invents a fantasy score of
what they think should be spent. They're not elected by anyway.
That's a perfect example of the whole danger of bureaucrats
and the degree to which the system is sick. So
Republicans have to go out and be prepared to go
(17:40):
those to those with the bureaucracy, with the news media,
and with the Democrats, and to say this is an increase.
I may I'd be as big an increase as you
would like, but it's an increase. And we just got
a poll in from the America's New Majority Project which
is very encouraging, in which the American people are very
very very clear that they in fact do not want
(18:04):
to see the government go on with business as usual.
They actually are very very interested in having the government
be in a position where we cut spending, we cut
the bureaucracy, and we are in a position where we
take on these kind of issues. Part of it's because
there's a deep filming. I was actually surprised by this,
(18:25):
but in our recent America's New Majority poll, eighty four
percent of American people, and I want you to check
this against your own beliefs, eighty four percent agree that
we have a corrupt political system. I think about that.
More than eight out of every ten people think that
our system is corrupt. Eighty one percent say this corruption
is a major obstacle to getting America on the right track.
(18:47):
Sixty eight percent, there's little more than two out of
every three say the bureaucracy is a major or significant
part of that corruption, and then fifty seven percent say
the bureaucracy needs a major overhaul. In fact, they believe
the change is so important that if their choice is
to either move quickly, make mistakes and correct them, or
(19:07):
move much more slowly to be careful. Fifty eight percent
say it's better to move quickly and correct mistakes than
to move slowly and potentially have the system not change.
So the point I'm making is the country is ready
for very substantial direct change, and if Republicans go out
and make the argument that in fact, we can have
(19:32):
a better system, we can have a system using, for example,
the make America Healthy approach of Robert F. Kennedy Junior,
which has turned out in the same poll to be
very popular and very acceptable. We have discovered that the
American people believe that you can reduce the growth of
medicaid spending by removing illegal immigrants and requiring able bodied
(19:56):
recipients to work. It's just amazing the consistent patterns. Sixty
eight percent of Americans believe individuals who could work but
choose not to work while receiving safety net benefits are
committing fraud. Seventy eight percent support a work requirement for
safety net programs like Medicaid, food stamps, and income assistance,
(20:16):
and the average American believes that about twenty five percent
of federal spending is lost to fraud. Now, they define
fraud more than just criminal activity, but they certainly are
not sympathetic to the notion that you can't change anything,
you can't cut anything, that we have to go forward blindly.
And that puts the Democrats in a very difficult position
because they're not set up to be participating in taking
(20:42):
apart the machine they built since Franklin Roosevelt came into
office in nineteen thirty three, they have spent almost a
century building this huge, centralized bureaucratic system which gives out
a lot of money to their foundations, their interest groups,
their universities, pays their union members, and so they're sort
of trapped. And yet when you talk to the country
(21:04):
at large, including a very large number of Democrats, I mean,
you don't get to an eighty one percent number without
having virtually all the Republicans, virtually all the Independents, and
a fairly large number of Democrats. So what you have
as an environment which we really haven't seen very often.
And the challenge to the Republicans and this is very hard,
(21:25):
trust me, because when we did it, it was extraordinarily hard.
The challenge is to now take these big ideas and
find solutions that actually will improve services, save money, produce
better outcomes. Now we know it can be done. Look
at everybody who goes online orders from Amazon and has
(21:49):
it delivered within nine hours to three days and just
sees that as normal. Well, the private sector has been
innovating and developing and using technology ways that are amazing
and that have enabled us to be a dramatically more
productive country and a country that is dramatically more capable
(22:09):
of getting things done at lower cost. And yet it's
in that setting that you have people saying no, no,
you can't change anything. And I think that's why we
are seeing the kind of struggle that's underway in Washington today.
I would say that there are three things you should
watch for over the next two to three months as
(22:31):
the reconciliation process moves forward. And I emphasize the next
two to three months because I believe absolutely one hundred
percent this has to be done by late May or June,
because in order for the House Republicans to retain control,
they have to go to the country next year having
been successful. If we have a weak economy in twenty
(22:54):
twenty six, it'll be extraordinarily hard for the Republicans to
keep the House. On the other their hand, if all
the efforts to tax cuts, to deregulation, to getting huge
investments from all around the world to invest in the US.
If all that pays off and we end up with
a good economy next year, it'll be I think, relatively
(23:14):
easy to keep control of the House. So there's a
lot at stake. This requires us, I believe, to get
the Reconciliation Bill done to the President and signed into
law before the fourth of July, so you have six
months for the economy to start speeding up. So you
enter twenty twenty six with a very healthy economy, with
(23:36):
substantial reform in the government, and with a sense that
the President and the House and Senate Republicans are keeping
their work and are getting the job done. That was
the great advantage we had when we ran for reelection.
Remember that when we first won in nineteen ninety four
of the Contract with America, we were the first Republican
(23:56):
majority in forty years. In fact, from nineteen twenty eight
to nineteen ninety four, you had four years of Republicans
and sixty four years of Democrats. That's how big the
difference was. Since we won, people saw that we were serious,
and we passed welfare reform. We began to balance the budget,
(24:16):
we passed tax cuts, who we helped invent Medicare advantage.
So people re elected us in nineteen ninety six. That
was the first time House Republicans had been re elected
in sixty eight years, not since nineteen twenty eight. Since then,
if you start in nineteen ninety four, Republicans have held
the House for twenty two years. Democrats have only held
(24:39):
the House for eight. Now, that's a genuine revolution and
who's in charge in the legislative branch. And we have
a chance next year to extend that. But to extend that,
we have to have a reconciliation bill with huge tax cuts,
with huge deregulation, with kind of fundamental changes needed in
order for this economy to start really moving at the
(25:01):
pace it could. There's no reason we can't have two
or three or four years of five percent economic growth.
That's what Reagan got. And so if we start moving
the right direction, we could actually have a remarkable couple
of years, and we could actually move towards what President
Trump in his speech to the Congress called a golden age.
(25:24):
Thank you for listening. Newsworld is produced by Ginglish three
sixty and iHeartMedia. Our executive producer is Guardzi Sloan. Our
researcher is Rachel Peterson. The artwork for the show was
created by Steve Penley. Special thanks to the team at
Ginglish three sixty. If you've been enjoying Newtsworld, I hope
you'll go to Apple Podcast and both rate us with
five stars and give us a review so others can
(25:47):
learn what it's all about. Right now, listeners of Newtsworld
can sent up from my three free weekly columns at
ginglishtree sixty dot com slash newsletter. I am Newt Gingrich.
This is Newtsworld.
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