GOP House error already haunting it politically

It didn’t take long for the Louisiana House’s petulance, and in particular that of self-styled Republican “fiscal conservatives,” to come back to haunt it. The possibility that the GOP would put itself into a political bind became reality when its own recent action stymied its ability to pass a budget to its liking.

Earlier this week, supported by House Republican leaders, the body made a rule change that would require two-thirds approval for any use of funds that were deemed “one-time” in nature – asset sales, privatization proceeds, and dipping into funds with dedicated sources of revenue – in a budget beyond what the forecasted increase in state general fund revenues would be for the next fiscal year. This meant that when the state’s operating budget came up for discussion, cuts of $93 million needed to happen.

So the chairman of the House Appropriations Committee, Democrat state Rep. Jim Fannin, proposed hacking $81 million of that out of money that would fund the transition of Louisiana’s Medicaid system from its present fee-for-service arrangement to a more efficient coordinated care network.

Not that he had many options, because since five-sevenths of all revenues generated from state sources are locked into defined spending arrangements, if the House was not going to go into the accounts where those dedications were piling up and take some from them, he only could cut expenses from the other areas left unprotected – health care, higher education, and smaller areas of expenditures such as corrections and veterans affairs.

The Gov. Bobby Jindal Administration objected to that tactic, as the long-term reductions in spending on Medicaid would be, at the very least, delayed, costing the state more in the long run. It also claimed in order to compensate, when including other federal matching dollars, that the state’s Medicaid program would lose $280 million. That seemed enough to cause that amendment to lose 48-51, with the majority of Republicans voting for it and majority of Democrats against.

This was no accident. As previously noted, no doubt when the rule came up, Democrats realized they could use it to box in Republicans on tax and spending issues. By disarming themselves from using any idle funds sitting in 225 different accounts worth about $5 billion with only a simple majority, Republicans would be forced either to make only spending cuts that Democrats wanted to see  if there was more than minor dissension among their ranks and/or raise taxes to avoid making cuts unpalatable to them. That the new rule passed with most Democrats voting for it, who in the past never were shy about redirecting money from these dedications, as well as most against this amendment including all but one black Democrat present, shows they realized this and how quickly they could use it to put the squeeze on the GOP.

Fannin (who had voted against it) then tried to get waived the rule. That was routed and he had to yank the bill, leaving his Republican allies with difficult choices. The least damaging would be to flip a few votes by asking Republicans to dare the Jindal Administration to put long-term interests (making Medicaid operations more efficient) over short-term imperatives (avoiding having to reduce health care services even further). Asking the party to give up on a winning issue defies logic, but as politicians all too frequently assign much more importance to the short- than long-term, it well might work.

Failure to do this leaves cutting in areas less palatable and more politically damaging to Republicans, with many of the more short-sighted among them probably thinking the Fannin amendment was the least harmful to their political fortunes because Democrat voters likely predominate among Medicaid recipients. Depending upon what these choices would be, it could be that, for every option, enough Republicans would find it unappealing and/or detrimental to their electoral chances that combined with Democrats’ will to power each of these would suffer the same fate as that amendment. If so, then the worst option possible ideologically and politically to the GOP, and the one most Democrats truly want, would remain: tax increases, likely on tobacco.

It could come to that, because House GOP leaders still show they don’t quite get what has happened. Indicating that, just prior to the vote to waive the new rule, Speaker Jim Tucker postulated that a vote to waive would make a member appear not to be a “fiscal conservative” during an election year – a remark that shows Tucker has no clue as to how a genuine fiscal conservative with political courage would behave.

If Tucker and his ilk had any guts, rather than address the symptom – dipping into pots of languishing money to find offsets to spending – they would attack the disease – a straitjacketed state fiscal system that forcibly allocates money for low-priority purposes when higher priorities go begging for it. True fiscal conservatives would review regularly these dedications to ensure appropriate amounts were going to real needs, instead of setting so much on auto-pilot and then avoid making choices annually that may disappoint some prospective voters by claiming dedications lock away their ability to do anything about it – when it all it really takes is the same majority vote to pass a budget as it does to change most of these dedications.

Or, until recently, a majority vote could take funds tied to purposes of low importance and/or little necessity of state involvement to redress the problems of this inefficient fiscal structure. But representatives either too cowardly to deal with the root of the problem or others wishing to exploit them changed that, and some in the House GOP may start waking up to the political dilemma that created for their party.