The question of the day is: What difference will Republican control of the U.S. Senate make?
The backdrop is a highly polarized political environment. Regardless of whether it’s preferable for Congress to enact bipartisan laws, the moderates who produce them are so rare that only partisan legislation is likely to be considered. Getting such laws passed, though, requires that one party control not just the House and the Senate but also the White House. In a world where you need all three, having two as opposed to one doesn’t matter much.
The need for greater control is especially the case in the Senate, where at least 60 votes are generally required to get anything done. The Republicans, to be sure, could use a process called reconciliation to pass budget-related bills with just 51 votes, but even then the legislation is subject to a presidential veto, which takes 67 votes to overturn.
So anyone who expects the Senate shift to produce broad tax reform or immigration reform over the next two years is likely to be disappointed. Tax reform is easy to say and hard to do; immigration reform is slightly more plausible but still very unlikely in the polarized environment. So what might happen?
One bad scenario is another outbreak of fiscal drama. The U.S. economy seems to be recovering, despite headwinds from abroad, in part because for the past year lawmakers have not created needless uncertainty. Next spring, however, the debt limit, the “doc fix” and other fiscal cliffs will rear their ugly heads.
House Majority Leader Kevin McCarthy, R-Calif., already has spoken publicly against the strategy of creating mountains out of these cliffs. Many newly elected members of the House and Senate, though, may be itching for a cliff-linked fight.
Even without cliffs, fiscal issues will create tensions. The temporary budget deal that Sen. Patty Murray, D-Wash., and Rep. Paul Ryan, R-Wis., shepherded through Congress last year alleviated pressure on the discretionary budget, but that pressure will come back in force in 2015 and 2016. The caps on both defense and nondefense spending will become increasingly difficult to meet as time marches on, especially since the Obama administration and Congress have different spending priorities.
What about health care? Votes to repeal Obamacare may be inevitable, but they will not have sufficient support to override the inevitable presidential veto. Republicans may do better with targeted legislation aimed at provisions that are unpopular with a number of Democrats. On that list are the medical-device tax and the Independent Payment Advisory Board. I am a supporter of both, and believe the Independent Payment Advisory Board in particular has been widely misunderstood, but they are politically vulnerable.
The best thing that could happen would be for Congress and the White House to agree to improve the Affordable Care Act by passing legislation such as the Better Care, Lower Cost Act. That would settle the question of whether value-based payments should go to insurers (which Republicans generally support, in the form of Medicare Advantage plans) or to providers (which Democrats generally support, in the form of accountable care organizations or bundled payments) – by allowing both.
It would also reinforce the recent deceleration in Medicare spending. Nevertheless, given the difficulties of moving forward in today’s polarized policy world, it’s probably too much to hope for.
Peter R. Orszag, a Bloomberg View columnist, was previously President Obama’s director of the Office of Management and Budget.