With
all
due respect to Speaker William Howell, the most
important man in the House of Delegates, if not Virginia,
right now is Vince Callahan, chairman of
the House Appropriations Committee. He is low-profile,
low-tax, unlike his Senate counterpart Finance
Chairman John Chichester, the high priest of
high taxes and fiscally irresponsible tax
expenditures.
When
"Maximum John" unveiled his tax plan,
it was given gubernatorial-style coverage by
the media. Insiders claim Gov. Warner actually
wants Chichester's
larger tax plan, not his own, to pass.
In
broad terms, their advisors seem to have considered three
basic scenarios, believing each one a sure win
for Warner and Chichester if they don't lose their
nerve: (1) a Warner veto of any budget not
containing a general tax increase; (2) another
Chichester-manufactured budget stalemate as in
2001, with "Maximum John" refusing to
budge unless he gets a general tax increase; (3)
House DEMS loyal to Warner refusing to support
any House budget plan lacking a general tax
increase, thus creating an unprecedented
situation where Howell lacks enough GOP
votes to pass a house budget.
All
three
are aimed at sending House Republicans this ultimatum:
Pass our general tax increase or Warner will use
his bully pulpit to turn Howell into Newt
Gingrich and blame the House GOP for the government
shutdown required by law unless a new state budget
is in place by July 1.
This
cockiness is expressed in the following email,
forwarded to me, summing up their thinking: [name
deleted]:
[If]
Mark sticks to his veto and doesn’t buckle, he’s
got them. Budget deadlock, anyone? No, they tried
that ... [in 2001]. A second time would prove
disastrous [for the GOP]. I really do think
Mark will be immovable...
This is his last shot to shape the
state’s history..."
Let
me say this: The email is real, but something
doesn't ring true to me. Was this "Macho
Mark" strategy cooked-up while the hit
song from the Village People, "Macho Man,"
was playing at a strategy session at the Governor's
Mansion?
So
permit me to humbly suggest another scenario,
one any Democrat should weigh before risking it all
for a seat on the High Tax Express: At the end of
the day, Gov. Warner backs Vinny Callahan, not
"Maximum John."
Consider
these words from Mr. Callahan in Margaret Edds’
column for the Virginian
Pilot:
"We're
going to operate on that premise," [Callahan]
said, when asked if he believes the House can meet
spending goals without
a general tax increase. But Callahan
acknowledged ... it will probably have to be done
leaving the car-tax reduction frozen at 70 percent
and without eliminating the estate tax."
(Emphasis added.)
This
is bombshell material. Why? The Warner/Chichester
tax plans both include a budget-busting
100-percent car tax phase out and virtual
elimination of the estate tax. The governor says he
stands by previous statements that both of
these actions are fiscally irresponsible but he says
he had no choice but to include them in his tax plan
because the House GOP would demand them as the price
of a budget deal.
Yet
Callahan suggests that was never true.
Moreover,
Callahan’s interview exposes the phoniness of
Chichester
and
his editorial backers. In 2001, “Maximum
John” sparked the budget fiasco by rejecting 70
percent car tax repeal on the grounds it would
bust the budget and hurt education. Editorial
writers and education groups lauded his stance. But
now, he not only advocates 100 percent phase out,
he’s willing to abandon a law he demanded -- the
1998 budget cap limiting car tax rebates to 8.5
percent of General Fund revenues – in order to do
it!
What do the editorial pages and education groups say
now? Suddenly, an idea that would soak up money
needed for education and wreck the state's finances
when proposed by former Gov. Jim Gilmore is no
longer anti-education and fiscally irresponsible when
proposed by Sen. Chichester. Simply amazing.
This
situation fuels my sense that the whole
"Macho Mark" scenario doesn't ring
true. First, a governor cannot veto his
own rhetoric: He can veto only legislation the
house and senate have jointly
passed. But if this
House and Senate agree to a budget, I am supposed to
believe Mark Warner will veto it and tell
Virginians he did so because the General Assembly
didn't tax them enough?
When
pigs fly.
Second,
let's examine the rhetoric around the expected
budget stalemate between the House and Senate. As we
know, the House and Senate pass their own version of
the budget and then each body appoints
representatives to meet at a storied Budget
Conference to merge them into one acceptable plan.
Then each house gets to vote up or down on the new,
unified budget.
The
Warner/Chichester stalemate strategy is seemingly
based on a presumption that the House budget
will reject virtually all new revenue proposals from
any tax or user fee while demanding new tax cuts
totaling hundreds of millions of dollars. With all
sides conceding roughly a billion dollar gap before
the additional revenue drains from any
new tax cut, administration officials therefore
say the House Republicans will have no choice but to
balance their budget bill with draconian cuts to
essential services, inflated growth estimates
and budget gimmicks if they insist on not raising
general taxes.
a
When the House representatives bring their
document to the Budget Conference, Chichester, with
Warner cheering him on, then will play General
Jackson, standing like a Stonewall against the house
blueprint, indeed opposing to the death any
budget agreement lacking a general tax
increase. Warner/Chichester advisors believe
they could rally public opinion against the House
position, forcing the House Conferees to give
in to a big general tax increase either at the end
of the regular session, or at a subsequent special
session.
But
will the Stalemate Scenario transpire like that? Not
long after Warner unveiled his budget proposal last
December, I outlined a No General Tax Increase
budget that was pro-education, pro-growth, shored-up
the highway maintenance fund, met other
critical needs, while avoiding the traps in the
Governor's plan that overburdened the general
fund with unprecedented commitments for new roads,
and committed the state to new out-year
expenditures that would wreck state finances
and be unfair to poorer, more rural Virginians. My
plan would protect the AAA rating and held out the
possibility of a food tax if the numbers worked out.
Surely,
Vinny Callahan and his ace budget guy, Robert
Vaughn, know the numbers far better than
I.
So,
I ask Democrats: Suppose the conventional stalemate wisdom
is wrong? Clearly, the Callahan interview suggests he
wants to produce what I will call a
"less taxes, less spending" House budget
alternative to the Warner plan, one that satisfies
-- and then some -- the four conditions Warner laid
out last week. In opposition to Callahan will be
what I call the "More Taxes, More
spending" Senate budget bill Warner and
Chichester prefer.
Surely
any thinking Democrat can see Vinny's strategy. He
wants to make Warner answer this question: Why
are you backing Chichester's general tax
increase and threatened government shutdown when the
House budget meets your budget conditions on
education, AAA bond rating, state employee benefits,
fiscal integrity and accounting rules?
Granted,
if you accept the "Macho Mark"
approach his advisors say is guaranteed, then
you believe Warner will back the Senate
even if presented with such a sound, No General Tax
Increase choice.
When
those same pigs fly back.
Admittedly,
the political elite may get the last laugh because
Vinny knows that one or two modest user fees -- a
gas tax for maintenance, not new roads, and a
cigarette levy hike to pay for health bills of
smokers -- is needed for a slam-dunk No General Tax
Increase budget.
So,
yes, House GOP members might revolt against
Callahan and Howell, thereby missing a
once-in-a-generation chance to trump the political
establishment that has mocked them, reduce the
Senate to yesterday's news, and establish the House
has the 800 pound Gorilla at Mr. Jefferson's
Capitol. As a Democrat, I do hope they
miss this fat pitch.
Which
brings us to scenario (3) above: Warner
loyalists among House Democrats refusing to support
any House budget that does not include a General Tax
Increase. Yes, this maneuver might make it
impossible for the House to pass its
budget. But it would expose House
Democrats - and thus the whole party -- to a
withering crossfire of editorial and public
condemnation.
Warner
likewise would come under intense pressure to disown
the strategy. If he did, House Democrats couldn't
sustain the revolt.
Bottom
line: "Macho Mark" is far easier said than
done.
So
I suggest to Democrats again: At the end of the
day, assuming no House GOP revolt, Vinny's preferred
"less taxes, less spending" budget is
going to put Warner in a very difficult spot. The
governor didn't move here yesterday from
Connecticut. He knows, better than most, that
the timely backing of a responsible "less
taxes, less spending" budget avoids the Tax
Governor label guaranteed by the "Macho
Mark" strategy, and will win praise from the
fiscally conservative, pragmatic independent swing
voters who decide U.S. Senate elections.
But
you will forgive me for playing the political chess
board. It is something we old-fashioned, low-tax
Democrats like do.
--
January 19, 2004
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