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Podcast Host
This is an iHeart podcast.
- [00:04]
Anabe Sofas Advertiser
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- [01:05]
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- [01:39]
Newt Gingrich
On this episode of Newts 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, what you can expect and look for. Reconciliation is a central tool to try to get some control over spending. It was originally created with the Congressional Budget and Impoundment control act of 1974, 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, 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, you have to have 60 votes to be able to bring something up to pass it. Now, when you have a partisan issue, neither party has had a 60 vote majority and so people can stop things, cause confusion, demand specific changes. And they came up with 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 filibustered. 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 and Senate have learned to 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 really 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 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 all done before the end of the fiscal year so that when they enter the new fiscal year, which is October 1st, 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 to do. People are fighting over the amount of money. The very process of legislation is cumbersome and filled with 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 to try to adopt appropriations just to get them done. But generally speaking, the use of a continuing resolution has been ongoing now for several decades. The challenge here is really simple. You want to get a continuing resolution out. Remember, it takes 60 votes in the Senate, and you have to have the votes in the House. So both sides, 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 into 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 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 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 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 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 pass one big reconciliation bill, which would have money for the border, but it would also have money for the tax cuts, and it 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 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 213 or 214 yeses, Trump stepped in and got the last three literally by phone calls while they were trying to decide whether or not to move forward. So now the House has passed a budget, and I'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 60 votes. The Democrats aren't inclined to be cooperative. They want to add some things, but anything 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 common budget resolution. Now, at that point, the reason this matters 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 is you have to reconcile the budget as passed with current law. So let's say that the budget as passed says we're going to spend a billion dollars on going into space, but current law says we're going to spend $3 billion going into space. Now you have to reconcile. And the principle is that the budget takes precedent. So you've got to find a way to cut the $2 billion 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, it'll take two or three months to negotiate the scale of change that they want. Because to his credit, Speaker Johnson 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 is called the Byrd rule. Bob Byrd of West Virginia was the majority leader and then the Appropriations chairman. I served with him. He was one of the smartest and toughest people in the U.S. senate in modern times. And he proposed a rule which basically says you, you can only bring up under reconciliation things that relate to money. And 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 filibuster and stop it. Now, the Bird rule then has the parliamentarian deal with, is this in or is this out? Does this affect spending or does it affect recent 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 look at everything very carefully in order to make sure that you fit the Byrd rule so that it could be passed with 50 votes plus the vice president. And that's an enormously complicated problem in terms of what you can and can't get done.
- [11:39]
Anabe Sofas Advertiser
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- [12:40]
Podcast Host
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- [13:14]
Newt Gingrich
Now the fact is, 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 system does work in a complicated, cumbersome way, which is part of the nature of the American system. And when you look at it, Congress has passed 27 reconciliation bills since the original act was adopted and 23 of them became law. President Clinton vetoed three, President Obama vetoed one. But the fact is, over time we were 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 1997 was a budget reconciliation bill that set the stage for the only four balanced budgets in your lifetime. It was a very big, very important deal. Now the fact is, this system forces you to work together. 12 of the first 14 enacted 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 1994 with the contract With America, we entered office as a governing party. And by that I mean our interest was in getting things done, in finding solutions and working out something, knowing that we had a liberal Democratic president. And so we had to negotiate in a framework so that Bill Clinton would sign it, because otherwise it wouldn't become law. We didn't have the votes to override his veto. Now, in that setting, we managed to get a lot done. As I said, we balanced 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 were going to focus on solution. And I think that's a key thing to remember about this. So you have two things going on right now in parallel. You have the current spending law, which Biden signed in December. It expires on March 14th. 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 see exactly what happens and how it happens. The bill that came out of the House is a very Republican bill, and President Trump has endorsed it. 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, yes, next week. Great things are coming for America, and I'm asking you all to give us a few months to get us through to September. So we 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 a different challenge in the Senate, and the continuing resolutions come up under regular order, and that means you can have a filibuster. So we'll see how they maneuver, try to get this done. I think it'll 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 and go home so they're not there to negotiate with. So the Senate either has to vote on what the House did or. Or allow the government to close. And the Democrats historically are very opposed to that. However, when the House version came up, House Minority Leader Jeffries in a letter to Democrats wrote, quote, republicans have decided to introduce 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 Hakeem Jeffries, the leader, and the Democratic whip, Catherine Clark and the Democratic Caucus Chair, Pete Aguilar, said in a joint statement, quote, the legislation does nothing to protect Social Security, Medicare and Medicaid while exposing the American people to further pain throughout this fiscal year. We are voting no. 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, I mean, Jeffries is not stupid. If he gets a chance to negotiate, he's going to ask for a lot more than Johnson normally could do. And so it 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 a minute. But the budget itself and the continuing resolution, both are going to be essentially 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 16 years when we 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 1979, 1980. We called it the budget of hope and Opportunity. And we're trying to move in a positive way in a direction which reflected both Jack Kemp and Ronald Reagan and as 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.
- [19:31]
Anabe Sofas Advertiser
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- [20:31]
Downy Unstoppables Advertiser
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- [21:08]
Newt Gingrich
Here are a couple of key ground rules. 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 in the last week, and the fact is, under any circumstance, Medicaid spending is going to go up. In fact, under the worst circumstance, it's going to go up by $169 billion 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 1974 radical Congress. And it is designed to 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 anybody. 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 nose to nose with the bureaucracy, with the news media and with the Democrats. And to say this is an increase, it may not 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 clear that they, in fact, do not want 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 feeling. I was actually surprised by this, but in our recent America's new majority poll, 84% of the American People, and I want you to check this against your own beliefs. 84% agree that we have a corrupt political system. Now think about that. More than 8 out of every 10 people think that our system is corrupt. 81% say this corruption is a major obstacle to getting America on the right track. 68% that's little more than two out of every three say that bureaucracy is a major or significant part of that corruption. And then 57% say the bureaucracy needs a major overhaul. And in fact they believe the change is so important that if their choice is to either move quickly, make mistakes and correct them, or move much more slowly to be careful, 58% 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 a better system, we can have a system using, for example, the Make America Healthy approach of Robert F. Kennedy Jr. Which is 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 recipients to work. It's just amazing the consistent patterns. 68% of Americans believe individuals who could work but choose not to work while receiving safety net benefits are, are committing fraud. 78% support a work requirement for safety net programs like Medicaid, food stamps and income assistance. And the average American believes that about 25% 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 apart the machine they built. Since Franklin Roosevelt came into office in 1933, they've 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 at large, including a very large number of Democrats, I mean, you don't get to an 81% number without having virtually all the Republicans, virtually all the independents and a fairly large number of Democrats. So what you have is an environment which we really haven't seen very often. And the challenge to the Republicans, and this is very hard 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, and we know it can be done. Look at everybody who goes online, orders from Amazon, and has 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 in ways that are amazing and that have enabled us to be a dramatically more productive country and a country that is dramatically more capable 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 the reconciliation process moves forward. And I emphasize the next two to three months because I believe absolutely 100% 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 2026, it'll be extraordinarily hard for the Republicans to keep the House. On the other 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 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 2026 with a very healthy economy, with substantial reform in the government, and with a sense that the President and the House and Senate Republicans are keeping their word 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 1994 with a contract With America, we were the first Republican majority in 40 years. In fact, from 1928 to 1994, you had four years of Republicans and 64 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, we passed tax cuts, we helped invent Medicare Advantage. So people reelected us in 1996. That was the first time House Republicans had been reelected. In 68 years, not since 1928. Since then, if you start in 1994, Republicans have held the House for 22 years. Democrats have only held the House for eight. Now, that's a genuine revolution in 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 pace it could. There's no reason we can't have two or three or four years of 5% economic growth. That's what Reagan got. And so if we start moving in 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. Thank you for listening. This World Is Pretty produced by Gingrich 360 and iHeartMedia. Our executive producer is Garnesey Sloan. Our researcher is Rachel Peterson. The artwork for the show was created by Steve Penley. Special thanks to the team at Gingrich360. If you've been enjoying Newts World, I hope you'll go to Apple Podcast and both rate us with five stars and give us a review so others can learn what it's all about. Right now, listeners of Newtsworld can send it for my three free weekly columns at Gingrich360.com Newsletter I'm Newt Gingrich. This is Newt's World.
- [30:48]
Downy Unstoppables Advertiser
What's that sound? That's the sound of Downy Unstoppable scent beads going into your washing machine and giving your clothes freshness that lasts all day long. There it is again. It's like music to your ears. Or more like music to your nose. That freshness is irresistible. Let's get a Downy Unstoppables bottle shake. And now a sniff solo. Nice. With Downy Unstoppables, you just toss wash. Wow.
- [31:15]
Podcast Host
For all day freshness, this is an I Heart Podcast.