If the Democrats want to pass anything in the Senate with 50 votes over the course of the next year, they have to decide now what they want to use reconciliation for and include that in next year’s budget resolution.

What kind of progressive changes can you accomplish using reconciliation?  Well, anything done through reconciliation must effect the federal budget because of the Byrd rule.  But that still includes a huge set of great potential issues.

A reconciliation bill gives Democrats the opportunity to pass the bills they want without compromise.   It can serve as the perfect vehicle to prove to the American voters how they plan to improve the country and why they should be allowed to hold their majorities.

Below are ten areas Democrats should think about addressing using reconciliation:

1. End Tax Loopholes

Arguably the entire purpose of the reconciliation process was to end things like completely unjustifiable tax loopholes. The special loophole that allows hedge fund managers to pay only a 15% tax rate on their income is a great example of a loophole that should be on the reconciliation chopping block.

2. Job Creation

There is whole range of job creation/job protection actions that could be addressed as part of a reconciliation bill. Something like the Local Jobs For America Act is a good starting point.   Tom Harkin’s plan to provide schools with sufficient funds to stop the massive teacher layoffs occurring around the country would a smart job protection idea. And Kent Conrad, Chairman of the budget committee, seems to be envisioning jobs legislation as the main purpose for any reconciliation measure this year.

3. Fixing The New Health Care Law

There are literally dozens of critical changes you could make to the new health care law using reconciliation:

  • adding a public option or Medicare buy-in
  • strengthening the risk adjustment mechanism
  • earlier start date than 2014
  • all-payer
  • direct Medicare drug price negotiation
  • taxing direct-to-consumer drug advertising to discourage the practice

4. Climate Change Legislation

A simple straightforward tax on greenhouse gas production would be economically and environmentally the right thing to do. Putting a tax on CO2 production would help deal with global warming, and the money it generated could be used for many other functions, including deficit reduction, pay for new social services, or proportional reductions in payroll taxes.

Moving to a system that taxes pollution instead of work is not a bad idea. Unfortunately, Kent Conrad is determined to make sure reconciliation will not be used for climate legislation.

5. Energy Efficiency Improvements

Most of our homes, offices, and public buildings are not as energy efficient as they could be. This is bad for the environment and an unneeded added cost to personal and public budgets. Obama’s “cash for caulkers” program is one idea making its way through Congress. Similar legislation could probably be moved using reconciliation with additional funds directed to local governments to add energy efficiency improvements to schools, libraries, police departments, etc.

6. End Corporate Welfare Programs

Our system is so riddled with corporate welfare programs that it is hard to even know where to start. A good place would probably be cutting the insane agricultural subsidies, which appeals to both supporters of sustainable agriculture and anti-subsidy libertarians.

7. Taxing Wall Street and CDOs

A Wall Street tax could be designed to make it unprofitable to get “too big to fail.”  Another tax could be create to at least rein the insane volume of CDOs that the finance system is engaged in. The goal would be to have the new taxes on Wall Street that would reduce leverage and risk, to prevent them from bring down the whole economy during a collapse. At the very least, such taxes would allow us to get back some of the billions they have stole from the taxpayers over the years.

8. Dealing With Citizens United Ruling

The Citizens United ruling will unleash an even bigger flood of corporate spending within the political system.  While reconciliation might not be the best vehicle to deal with that, there are some solutions that probably could survive the Byrd rule.  A bill requiring that all corporate spending on elections be treated as profit and taxed at the top corporate tax rate, for instance. The money raised could be used to create a small donor matching fund program, or a public financing program for those seeking federal office.

9. Increase Infrastructure Investments

Many of our water and sewer systems are incredibly old. We are falling behind in broadband access, and we need to begin a serious investment program in public transportation because gas prices will eventually start to rise as world wide demand picks up. We need to direct more money toward upgrading our infrastructure, and reconciliation could be used as a vehicle to do much of that.

10. Extend Unemployment and COBRA

Republicans have been continuously holding up the temporary extension of unemployment benefits and COBRA  coverage. While I think it would be a bit of a waste of reconciliation to use it for this purpose, there are a lot of people hurting in this economic downturn who need help and this is something that would easily fit within the rules of reconciliation.

You Don’t Need To Choose Just One

The great thing is that many of the possible uses for reconciliation are not mutually exclusives, so several of them could be included in one reconciliation bill.  For example, jobs creation legislation could be paid for by ending tax loopholes and the billions that would be saved by a public option. A carbon tax could pay for energy efficiency investments and improving mass transit systems.

Reconciliation is the best tool the Democrats have for getting around  Republican obstructionism in the Senate.

Please share your thoughts on reforms (need to effect the budgets) that you would like to see passed using reconciliation.