SADOW: Jindal Might Have More Arrows In His Quiver Than The Fiscal Hawks Think

First, it was the political agenda of the moribund Louisiana Democrats that the so-called “fiscal hawks” may revive. And depending on what they do this week in the Louisiana Legislature, Gov. Bobby Jindal’s prospects may be brightened as well while they destroy theirs.

Better known as the Louisiana Budget Reform Campaign, the “hawks,” comprised almost exclusively of House Republicans, joined forces with House Democrats to sideline last week the budget supported by Jindal and other Republicans, in favor potentially of their own concoction. They object to the use in the operating budget of what is termed “one-time” money, or a combination of nonrecurring, one-off revenues, and recurring revenues (as defined by R.S. 39:2) from sources not directly tied to the general fund but instead demand a bookkeeping entry in legislation to get them into the general fund (the latter point apparently not realized even by at least one long-time legislator.)

Instead, they seem ready, with Democrats, to offer up their own version – but potentially at the cost of accepting tax increases and growth of government, which would seem to go against the rhetoric espoused by many of their members. This empowers Democrats in a way they could not have imagined a month ago, and that could extend beyond their wildest dreams.

MacAoidh at The Hayride wonders whether events might head in a more apocalyptic direction, offering that the Senate might go along with such a budget only if it had a sweetener of expanding Medicaid, the thinking here that since a Senate committee passed along a version of the expansion (the deciding vote cast by state Sen. Fred Mills who has a pecuniary interest in seeing expansion), that this scenario could manifest. The expansion would bring the state more federal money in the short run even as federal taxes increased to pay for it (assuming the law remains the same), but by 2020 it would cost more than it brought in and costs would spiral much higher in the years after. Thus, both entirely bad policy decisions – growing government and stifling freedom both through tax hikes and taking on a new, expensive entitlement – might become part of the budget in progress.

The alternative would be acceptance of one or the other by Jindal and to use that chamber to bludgeon the other on this issue, according to this argument, which ends up creating a Hobson’s choice for Jindal in that he would have to backtrack on a stated core belief – no new taxes without offsets elsewhere and no Medicaid expansion – and thereby seriously damage his credibility and future prospects for higher office. Collaterally, this would self-inflict a wound on the state GOP and hand an electoral gift to Democrats.

But far more likely is that Jindal can come out of this himself empowered, because he holds not one, not two, but three trump cards – the veto, timing of veto sessions, and ability to call a special session. In the abstract, the governor can veto the entire budget bill, provoking a crisis because of the Constitutional requirement that appropriations last only one year. That is, no spending of money can occur after a year has passed since the effective date of the general appropriations bill containing that money (or past the appropriated level once it is reached prior to the end of that year). There are accounting tricks that can extend this a little, but what would happen only days after Jul. 1 is the state would begin to become unable legally to pay its obligations, especially payroll.

Thus, there really has to be a signed budget bill by the end of Jun. 30, and a Jindal veto in late May or later produces only the legislative options of a veto session to override, or a special session to take another crack at the budget. But a veto session is too late – 40 days after adjournment of the regular session, so the chambers would have to call themselves into special session reasonably quickly. Jindal could turn the pressure up even more by calling one immediately after the session, disrupting the personal and professional plans of the presumably part-time legislators.

Of course, the idea of this is not to play chicken, but for Jindal to use this as a threat to produce a budget without tax increases or Medicaid expansion. However, he really doesn’t even have to go this far and try to convince recalcitrant legislators that he would threaten a shutdown with this veto. He has another, more elegant option.

If either of these things that alter Jindal’s preferences are to work – a redone budget with tax increases or Medicaid expansion – they need companion legislation. And these also are subject to a veto, which unless the Legislature acts with some alacrity given the constitutional timelines must be wrapped up and to him in fewer than three weeks. If they don’t make it by May 25, he can veto them, throwing the budget out of balance, with no recourse via a veto session, requiring an inconvenient special session.

Not that the bills may make it at all. Any tax increase requires a two-thirds vote of the seated membership, and while the “hawks” and Democrats might be able to cobble that together, it’s uncertain whether enough GOP senators would comply. And even if 20 senators went for Medicaid expansion, it seems highly unlikely that 53 representatives would, even with assumed quid pro quos for each case.

Then there’s the final hurdle, Jindal vetoes. The two-thirds that would pass tax increases would have to be reassembled, and then constructed for Medicaid expansion. And even if there wasn’t the glare of a special session on these override votes, with the regular session winding down the spotlight on these votes will be bright, aided no doubt by Jindal and any number of interest groups.

So let’s say you’re a “hawk.” Likely you got elected on a no-new-tax, smaller government platform. And your group’s leaders are asking you to go on the record for a vote to enlarge government by a tax increase that may not pass, that if does then may never leave the Senate and/or may come at the price of voting for a new entitlement, which then if the Senate does pass one or both may get vetoed and you will have to reaffirm one or both again, possibly in an inconvenient special session, with no guarantee any overrides would work – knowing all the while in two years when you run for reelection or for the Senate, if not some Democrat candidate at home saying he would have raised taxes and spent them on better things than you did, then some Republican candidate will be calling you a big government sellout who’s let the liberalism of the capital make you forget the people back home and why you were sent there. So you’re supposed to commit political suicide because of your passion for the idea that recurring money that goes into the general fund is pure while such money that doesn’t go directly into the general fund but can be used for general fund purposes has the mark of Cain?

As long as Jindal continues to make clear he will veto any Medicaid expansion bill and tax increase that is not offset with cuts elsewhere, he wins this political battle every time. And if the “hawks” are so politically inept as to offer something with tax increases without offsets, Jindal has absolutely no downside politically to carry out these threats. Even in the almost impossible circumstance that enough “hawks” blindly impale themselves on their swords for the glory of an accounting rule and, with gleeful Democrats’ help, override everything, Jindal makes himself into a hero for fighting new taxes and in combating big government. If they even propose one tax increase in their plan, they create the opportunity for Jindal to regain his eroded status while immediately endangering their political statuses. For them, its heads they lose, tails they lose.

While for Jindal it’s heads he wins, tails he wins – and also for Democrats who in the best of all worlds may get an imploding Republican Party and higher taxes and bigger government. These are the stakes involved as the “hawks” feverishly build their alternative with the siren song of Democrats in the background. And if they don’t realize this already, then they are idiots.

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