Reconciliation has limitations, though. Specifically, under Congress's parliamentary rules, it cannot be used for legislation that would increase the federal deficit in the long term (after 10 years). The task of projecting how bills advanced through reconciliation would affect the budget in the distant future typically falls to the Congressional Budget Office.
Before Republicans introduced their bill last week, it was clear that their plan would reduce the number of Americans with insurance and cut subsidies that the Affordable Care Act had extended to help many working-class Americans buy their own insurance plans.
Although the Republican bill would clamp down on spending, it also contains massive tax decreases — particularly for health-care companies and high-income households. And so it remained in doubt whether the GOP bill would meet the requirements for reconciliation.
A draft of the bill obtained by Politico's Paul Demko and dated Feb. 10 probably would have increased borrowing, said Avik Roy, a former health-care adviser to Republican presidential nominee Mitt Romney. Since then, however, Republican lawmakers revised the legislation, calling for even more severe reductions in Medicaid spending.
But the CBO analysis settled the matter Monday. The bill proposes $883 billion in tax cuts over a decade, but, per the CBO, those will be outweighed by a colossal $1.2 trillion reduction in spending over that time, for a total reduction of $337 billion in the deficit. (The spending cuts generally come out of programs aimed at helping poor and working-class health-care users, while the tax cuts generally benefit businesses and those further up the socioeconomic scale.)
The report did not include detailed estimates for the decades to follow, but stated that the bill was not likely to increase federal borrowing for at least 50 years.
Without the CBO's seal of approval, Republicans would have had several options, none of them especially attractive.
The GOP leadership could have rejected the CBO analysis in favor of some other forecast — perhaps one produced by President Trump's Office of Management and Budget. The director of that agency called the CBO report “just absurd” on Monday.
Republican leaders in the Senate could have changed the rules of that body, expanding the scope of reconciliation or eliminating the filibuster altogether. These approaches would have involved substantial departures from established congressional protocol, and senior GOP lawmakers have avoided fundamentally changing how the legislative branch operates.
Most likely, Republicans would have been forced to make changes to the bill to balance its effects on the budget, wasting valuable time on the congressional calendar.
Now, Republicans pushing the legislation have a different challenge: selling their fellow lawmakers, and the public, on a measure the CBO said would leave more than 20 million more people without health insurance.
House Speaker Paul D. Ryan (R-Wis.) told Fox News Channel on Monday that the CBO report “exceeded” his hopes.
And in more conservative parts of the party, the big spending cuts could work in the bill's favor, including to the small-government Republican lawmakers whose votes the bill's proponents will need to advance the measure through the House.
“I would expect that the speaker's office is pretty happy about that,” Roy said. “There are conservative holdouts out there, and that's the big battle that Paul Ryan's been fighting.”