In the later portion of this video Matthews and Rep. Alan Grayson go toe-to-toe over the issue of whether or not Reconcilliation can or can't be used to pass Health Care.
Ultimately I actually think they're both right.
The Senate Parliamentarian is the one who determines whether or not something fits within the Budget Reconciliation Rules or not. In the past not only have they passed tax cuts via Reconciliation, they also funded the Iraq War and expanded SCHIP using that process.
These are the rules for Reconciliation.
Reconciliation generally involves legislation that changes the budget deficit (or conceivably, the surplus). The "Byrd Rule" (2 U.S.C. § 644, named after Democratic Senator Robert Byrd) was adopted in 1985 and amended in 1990 to outline which provisions reconciliation can and cannot be used for. The Byrd Rule defines a provision to be "extraneous" (and therefore ineligible for reconciliation) in six cases:
1. if it does not produce a change in outlays or revenues;
2. if it produces an outlay increase or revenue decrease when the instructed committee is not in compliance with its instructions;
3. if it is outside the jurisdiction of the committee that submitted the title or provision for inclusion in the reconciliation measure;
4. if it produces a change in outlays or revenues which is merely incidental to the non-budgetary components of the provision;
5. if it would increase the deficit for a fiscal year beyond those covered by the reconciliation measure, though the provisions in question may receive an exception if they in total in a Title of the measure net to a reduction in the deficit; and
6. if it recommends changes in Social Security.
Any Senator may raise a procedural objection to a provision believed to be extraneous, which will then be ruled on by the presiding Senator. A vote of 60 Senators is required to overturn the ruling.
I still don't believe that Insurance rule changes such as the banning of pre-existing conditions, the limiting of life-time cash outlays and recisions probably can be done via Budget Reconcilliation. But one thing they can do is remove the Excise Tax, a program already exists, it can be expanded or contracted via Budget Reconciliation - but the program has to EXIST first. Creating an Insurance Exchange with or without a Public Option via Reconciliation is doubtful.
In the end though, this decision and distinction is for the Senate Parliamentarian.
There is also the possibility that Pelosi's announcement that the Senate Bill won't pass the House without changes may have been a head-fake. Via Alternet.
"In every meeting that we have had, there would be nothing to give me any thought that that bill could pass right now the way that it is," Pelosi said yesterday, "There isn't a market right now for proceeding with the full bill unless some big changes are made."
Now, maybe Pelosi doesn't have the votes right now, but such is the life of the Speaker of the House. Just because she doesn't have the votes in hand doesn't necessarily mean she can't get them.
If Pelosi does have the votes right now, she'd be a fool to say so. In the wake of Martha Coakley's defeat, all eyes are on the House. If health care reform is to survive, the House will have to pass the Senate bill "as is." But that wouldn't necessarily be the end of the story. The Senate could still fix some stuff the House doesn't like through budget reconciliation. In theory, it could even put the public option back.
Pelosi would be foolish announce that the House could pass the Senate bill right off the bat.
So what I think will probably happen is that the House and Senate will first come up with a modified version of the Combined House/Senate Bill which will go down in flames in the House and get buried in the Senate,
This will take a few weeks to play out, then comes the hard-knuckle deal making...
House members who hate the Senate Bill may be offered a deal to support it in exchange for a series of Amendments fixing it attached to the Budget Reconcilliation Bill. As Rep Grayson alludes - this deal might already be in the works it's just a matter of working out some of the details. Since the Senate has already passed a Bill, getting the bill through the House and then immediately amending it via Reconciliation is a mean and dirty way of getting Health Care done - but it can GET DONE.
Then we just have to start trying to fix our financial system.