Pressure Builds on Northam to Crank up Spending

by James A. Bacon

In many ways Governor Ralph Northam has governed as a leftist-progressive Democrat bearing little resemblance to the moderate he proclaimed himself to be when he ran for office. He has expanded Medicaid, mandated a 100% carbon-free electric grid within 30 years, and turned over Virginia’s schools to zealots far more dedicated to expunging “systemic racism” than raising academic performance.

The main exception to his hard tilt to the left has been fiscal policy. Although it’s impossible to describe Northam as a fiscal conservative — he has backed too many revenue-raising measures for that — it is fair to call him a fiscal moderate. Erring on the side of caution, the Governor built up the state’s cash reserves before the COVID-19 epidemic hit and used revenue sources of limited duration to pay for one-time spending initiatives rather than expanding ongoing programs.

The question now is how long Northam can hold the line. As the Virginia Mercury writes today, many Democrats are saying that Northam isn’t spending nearly aggressively enough. Forecasting a $2.7 billion revenue shortfall in the two-year budget cycle, he’s not backing Democratic priorities like tuition-free community colleges, teacher pay raises and expanded health care access until the fiscal picture, clouded by the COVID-19 epidemic and recession, clears up. Writes Graham Moomaw:

Some progressive groups and Democratic legislators feel a cautious approach misses the moment in a pandemic that’s fallen differently on the rich and the poor. With many working-class Virginians struggling to pay their bills, stay healthy and keep their homes, they say, the state should be using every resource at its disposal to help.

That includes dipping into the roughly $1.1 billion the state has in reserves, the so-called rainy day money meant as a fallback in a downturn.

“It’s called a rainy day fund for a reason. It’s pouring,” said Del. Sally Hudson, D-Charlottesville, a labor economist and assistant professor at the University of Virginia. “At some point we have to accept that D.C. is not coming to our rescue and step into a world where states start doing more for their people.”

The sentiment is not universal. Del. Vivian Watts, D-Fairfax, chair of the House Finance Committee, doesn’t support using reserves for the special budget session for fear of undermining the state’s AAA bond rating. The state’s reserves, about 7% of the general fund budget, are “not that extraordinary,” she says. And as Finance Secretary Aubrey Layne told the Mercury, the administration didn’t consider using the rainy-day funds because no one knows “it won’t pour harder later.”

But the pressure will be relentless. In the progressives’ way of looking at the world, the list of “unmet needs” is limitless. They are a bottomless pit. And the pit will remain bottomless no matter how much money is spent because the proffered solutions to problems are rarely solutions at all. New programs create new dependencies and establish new constituencies calling for more.

Regardless, the Democrats are in control now, the Republicans are adrift, and the only debate that matters at the moment is between different factions of the Democratic Party.

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50 responses to “Pressure Builds on Northam to Crank up Spending

  1. As I predicted just a day or so ago. You beat me to this….

    https://www.baconsrebellion.com/wp/northam-asks-legislators-resist-the-urge-to-spend/

    FYI, among the many failings of this disaster of a special session, none of the legislators’ individual proposed amendments to the budget bill are available online yet. Not like we can go by the committee offices looking for the paper copies. We are past incompetent and well into intentional…..They don’t want to share.

    Get ’em up this weekend please.

    • They’ve gone from promising transparency to providing opacity without even pausing at translucency.

    • When confronted with the need to explain the actions of our General Assembly as either conspiracy or incompetence you will almost always be right by picking incompetence.

      • Hanlon’s razor.

      • If you ask me whether it’s conspiracy or incompetence I will answer “Yes”.

        • An incompetent conspiracy?

          • Well the ones that get caught are….

          • Funny, only Republicans seem to find them. I wonder? Are they really conspiracies, or a Republican planning product?

          • Or a conspiracy of incompetence.

            Take your pick.

          • N-N

            Only Repubs? Really?

            What about Hillary Clinton’s “vast right-wing” conspiracy?

            Or, more recently, Nancy Pelosi’s “Trump is sabotaging the post office to steal the election” conspiracy?

          • I don’t know that one. What was the conspiracy?

            Well, are they wrecking the USPS? Will it affect the election?

        • Apparently Trump sabotaged the USPS back in 2018 to prevent mail-in ballots being used in the 2020″time of covid” election. For this to be true, Trump would have had to know two years ago that covid-19 was coming.

          My point is that no one has a lock on conspiracy theories.

          • well,it’s _not_ a “conspiracy” if a politician says that USPS is grossly inefficient and needs to be reformed.

            “conspiracies” by their very nature are “secret” plans with like-minded conspirators often working outside the law to do something.. overt plans in the public realm are called politics.

  2. Northam was always for expanding Medicaid. I also wrote on this blog that Northam is more progressive. Remember? Why is this suddenly such big news. I see it as a healthy change.

    • well it’s a change from rural repub extremism, to progressive liberal extremism. I am still not smiling. The rural repubs insisted among other things that the tax burden be borne by NoVA. I can at least hope for a more equitable increase in taxes across the board, such as the recent gaso tax hikes, that everyone has to pay.

      • Perhaps, but Medicaid is what provides basic healthcare to a lot of rural folks who never had employer-provided.

        And for older rural folks, it’s Medicare – and what’s not recognized is that Medicare actually costs money – a monthly premium but also it only pays 80% so the Medicaid expansion actually pays that monthly premium as well as the 20% co-pay for rural folks.

        They’re called “dual-eligibles” and without Medicaid , a good number could not afford Medicare. That’s about 200,000 people in Virginia.

        Another irony is that the Medicaid Expansion is part of Obama-care. If Obama-care is killed – then the expansion might go away also.

        So when you look at these issues and what the Dems would do and what the GOP would do – yes – “extreme” is a word.

    • “I see it as a healthy change.”

      In so many ways.

  3. Northam always supported the Medicaid expansion and the truth is that the GOP lost the GA over that issue.

    Call it “leftist” but also call it what voters wanted and the GOP ignored it.

    And yes, it would be dumb to use the reserves for increased spending and if they do it, I expect Northam to veto it and if they pass it over him – I expect the GOP to re-take the GA.

    Is Northam doing what the majority of voters in Virginia agree with?

    I think he is. If the best the critics have is that he’s a “leftists” good luck with that with most voters.. I think it says more about those who are using the word “leftist”.

    I

    • When it comes to healthcare and paying for it, the Democrats are like women and the Republicans are like men; Democrats will buy any $10 item they don’t need that’s on sale for $5, while Republicans will happily spend $10 for a $5 item they do need.

  4. This is a hybrid schoolyard game – half chicken and half kick the can (down the road).

    The chicken part comes from waiting for the federal government to bail out the states. The newfound concept of Modern Monetary Theory (MMT) holds that currency is a public monopoly where the spending of that currency bears no serious relationship to other forms of spending … such as household spending. Adherents to MMT think that the federal government should create more money so long as unemployment remains high. Deficits and debt repayment largely don’t matter, at least a the paltry levels of defecit we have incurred to date. It’s not just Keynes on steroids but a gigantic, Godzilla – sized Keynes on steroids, human (monster?) growth hormone and meth. Since the federal government controls the public monopoly of currency Virginia’s best bet is to play chicken with impending economic catastrophe waiting for the Feds to create more money and send it to us. By this measure, financially conservative states like Wyoming were really stupid, mid-level states like Virginia were pretty stupid and profligate spenders like Illinois and New York were brilliant. Play chicken and hope the mob doesn’t burn down Richmond before the Fed money arrives.

    Northam wants to kick the can down the road pretending that the piper will never have to be paid. Temporarily slow the growth in spending, avoid any government layoffs, don’t raise taxes and preserve the rainy day funds. It would be nice to know a bit more about the endgame that the chess grandmaster we call a governor is expecting to play but Ralph sees no need to explain.

    In the context of playing chicken with the Feds the kick the can down the road option makes little to no sense. Why slow spending when our indescribably rich uncle (Uncle Sam) stands ready to bail us out? We should be spending anything and everything we have (screw the bond rating) and when we’re destitute just throw ourselves, along with states like Illinois, at the feet of the incoming Biden Administration. Wasn’t it Sleepy Joe who coined the phrase, “From each according to their ability, to each according to their need”? Seems like being needy in a world where the Fed creates wealth by printing money is the right play.

    In the MMT world states have neither fiscal strength nor a need for fiscal responsibility. They need political power in DC to get more than their share of the freshly printed money.

    Right now I feel like the engineers in the control room at Chernobyl must have felt as they watched one light after another turn from green to red.

  5. I don’t have much positive to say about Northam, but will acknowledge he has been reasonably moderate on spending. Someone like Vivian Watts understands that finances can get worse and if the state spends the rainy day money now, it won’t be there if things get worse and will need to be rebuilt. A college professor would, on the other hand, likely be clueless. Raise taxes; invent new ones.

    Northam and Watts are likely to know and understand that “In 2012, Californians voted to increase the state income tax for top earners by 3 percent. A recent academic paper researching this tax hike’s impact found that it prompted a greater number of higher earners to leave the state, and that ‘eroded 45.2 percent of state windfall tax revenues within the first year and 60.9 percent within two years.'” National Review https://www.nationalreview.com/2020/08/california-wealth-tax-proposal-will-likely-backfire/?utm_source=Sailthru&utm_medium=email&utm_campaign=NR%20Daily%20Monday%20through%20Friday%202020-08-20&utm_term=NRDaily-Smart

    Ditto for Maryland. “For example, the state of Maryland passed a so-called millionaires tax in 2008, projecting it would bring in $106 million in new revenue for public services. In actuality, the result was $1 billion of its tax base lost to other states due to out-of-state migration. The tax ended up corresponding with a decrease in total tax revenue from the affected group by $257 million.” Ibid.

  6. Still no list of names of the delegates who voted to continue the out of town per diems after the delegates returned to their homes. No only brazen theft of public property but obfuscation to protect the guilty.

    Congratulations to Eileen Filler-Corn – she has reduced Virginia to Banana Republic status in less than two years in power.

    What a fine new world Virginia has entered now that the Democrats have control.

    • In the 2018 session , in which Republicans were in the majority, the GA stopped listing the names of delegates voting on this, and other, procedural resolutions. So, to blame the Democrats for this issue is wrong.

      • Geeze, Dick -you are such a partisan buzz killer… I notice Steve, who likely knows these things also, tends to hang back on offering that info.

      • Yes. However, we can hold the “transparency in government” democrats responsible if they do not reverse the republicans’ decision and go back to listing who voted how.

        This would be the ideal time for them to do that, what with the remote meetings by the house and the lack of access to house members by the public and press.

        • wait – the GOP runs amok for a decade and crickets and now the Dems are “corrupt” because they are following what the GOP was doing? hypocrisy?

          • Please tell me EXACTLY what part of my comment you disagree with. Furthermore, please show me where the word “corrupt”, in any of its various forms, appears in my comment.

            Please avoid including any of the following items in your response:
            1) A claim of “well they did it too”
            2) A change in subject.
            3) The tossing of a straw man.

            The democrats promised that they would not behave the same way republicans had behaved. Do you think they have kept that promise?

          • Geeze, I thought I was no longer to respond…

            re: ” The democrats promised they would not behave the same way republicans did for so many tears. Do you think they have kept that promise?”

            Did they? And have they? Neither side does – that’s the point. why hold one to a higher standard than the other especially if you’re on one side and holding the other side to a higher standard.

            This is pro forma behavior for both parties.. most of the time.

            There is a reason why – it’s been called sausage-making…for quite some time.

            Sometimes – something nice rises above the pile of poop – other times… it’s just different kinds of poop, varying colors and smells.

            I bet Steve does not disagree.

          • Larry:

            You wrote: “why hold one to a higher standard than the other especially if you’re on one side and holding the other side to a higher standard.”

            Yes they did and no they haven’t.

            With that said, please point out where in my comment I was actually holding democrats to a HIGHER standard than republicans.

            And, of course, as it turns, in this case the republicans didn’t even do “the crime”. I’m sure they WANTED to do it, but apparently they did not.

            And by the way, I hit the trifecta.

          • Wayne – it’s a game both sides play. Neither side lives up to their respective “promises”. It’s the nature of politics.

            For all the years the GOP was in control and doing the same things the Dems are doing now – I don’t recall the GOP promising to do better… and reform… only after they end up in the minority.

            This is the modern political version of counting coup. Call me a non-partisan cynic on this.

            we can certainly agree to disagree – no harm, no foul.

          • If you think I have any love for the republican party you are sadly mistaken.

            But again, please tell me when/where I have ever held one political party to a higher standard than the other.

      • Dick — Really? Here’s one. With roll calls. Not on per diem but very much procedural. For a 2018 special session…..
        https://leg1.state.va.us/cgi-bin/legp504.exe?182+sum+HJ5002

        Find me examples to the contrary and I’ll expand my scope of fire…

        • It is with much chagrin that I must admit that I was wrong. The items that I had looked at in my search were procedural items dealing only with authorizing the clerk to pay the House expenses. I assumed they included per diems; they did not. Beginning in 2018, LIS stopped listing all the names of the individuals voting for the resolution.

          However in the 2018 and 2019 special sessions, this procedural resolution did include the authorization of payment of the per diems and, as Steve notes, the names of the individual delegates were listed. For special sessions prior to 2018, I could not find a comparable resolution dealing with per diems.

          By the way, good luck on finding out the amount of the per diem from any of these resolutions. The language refers one to a Code section which refers one to the Appropriation Act. The provisions of the Appropriation Act have references to each other. There is an authorization of a $300 per day payment, but the reports in the media refer to $200 per day. So who knows?

          • http://leg1.state.va.us/cgi-bin/legp504.exe?192+sum+HJ4003

            Found another one while you were admitting error, which I appreciate. Who fed you that line? 🙂

          • Reed Fawell 3rd

            Democracy dies in darkness. Which is the current plan all along for current regime.

          • Dick Hall-Sizemore

            I came up with it on my own, unfortunately. I made the unforgivable mistake of not bothering to read the procedural resolutions in the prior regular sessions; I just went by the titles. I assumed they dealt with per diems, as does the one in the current session.

          • Even if you had been right it wouldn’t have mattered. Authorizing the payment of per diems for legislators working out of town in Richmond is the normal course of events. Authorizing per diems for legislators working from their basements is another matter altogether. Disgraceful behavior made all the more disgraceful by the fact that the vote is kept hidden.

            Here’s a question. I assume the per diems are not taxed since they represent payments for out-of-pocket expenses incurred by out-of-town legislators while temporarily residing in Richmond. What about Richmond-based legislators? In an even reasonably well run company they would not be eligible for per diems since it would be expected that they get to go home at night. But if they did take the per diem it would certainly be taxable. Do Richmond-based legislators still get per diems? If so, do they have taxes witheld?

        • It appears that the Speaker may be running afoul of the Virginia Constitution. Article IV, Section 10 says, in part:
          Each house shall keep a journal of its proceedings, which shall be published from time to time. The vote of each member voting in each house on any question shall, at the desire of one-fifth of those present, be recorded in the journal.

  7. I endorse Rippert’s message. Toomanytaxes message, too.

  8. Right now all parts of the state want to get the full benefit of everything they contribute to the whole and more. The resources don’t exist.

    Everything is all of nothing. One has complete control or the other does. It’s either extreme lib or extreme conservative.

    We’ve got to move to finding ways for win/win and get beyond win/lose.

    • That’s exactly why we need to quit playing the role of useful idiots to these political parties. While each person does lean a little more left or a little more right, very few are on either extreme. We have much more in common that not. However, when we back our party to this extent, we get what we ask for. We need to stop looking at the other side as them, and start seeing them as fellow citizens. Typically, our own party screws us more than citizens from the opposing side anyway.

  9. Public opinion in Virginia at large on spending is likely right in line with Northam’s positions.

    I think we’re going to see a pattern in Virginia of Democratic governors being more moderate than the General Assembly is. If they’re not, the public will elect a moderate GOP governor to check the legislature. This is what continually happens in Maryland and Massachusetts. Only thing is I wonder if the VAGOP is capable of nominating a moderate Republican.

    • While I agree with your analysis I quibble with your facts. Maryland has elected two Republicans as governor since Spiro Agnew ran the state (endding in 1969). One served a single term and the other is in office now. So, “continuously happens” is a bit of a stretch for Maryland. Of course, the Republican Party in Maryland can come up with a Larry Hogan or Bob Erlich. It seems increasingly clear that the Republicans in Virginia remain mired in far right hysterics and simply refuse to back candidates with state-wide electability. The recent absurdity of the Denver Riggleman ambush made that clear to me. What did Riggleman do to raise the ire of the far right wingers? He presided over a gay marriage for one of his ex-staffers.

      The real question is whether the Republicans can get their act together before the Democrats turn Virginia into Illinois.

  10. Dems typically call spending “investments”. GOPpers call them wealth transfers…

    I’d vote for a Moderate GOP in a heartbeat but those critters are no longer allowed in the Republican party… Steve know this.. sometimes even admits it!

    • Steve just WROTE that (and you stayed away), but the moderates still exist, just being shouted down. With a new chairman, another campaign to come, perhaps we can start back. Moderate is in the eye of the beholder, but I’d welcome 1) polite and accessible, 2) willing to listen and 3) with a touch of understanding that we don’t get all wisdom from Rush and Hannity and Fredericks and you need 50% plus 1 to win.

      • Unfortunately, those type of folks are not surrounded with the drama required to garner attention in today’s politics. I’m afraid that while we need this type of leadership, they’re not politically viable in this era.

      • There’s a certain irony in that supposedly we are one of the most free countries in the world especially with regard to the ability to elect our leaders and yet – many voters are not happy with the way things work… I started to say “government” but it’s not only government, it’s higher, the media and who knows what else.

        To me – a “moderate” is someone who knows that we must have health care for all of us – that in the end – if we don’t, the rest of us end up paying anyhow so no GOP that says “kill Obamacare” is a moderate in my book – so you’re right about the eye of the beholder!

  11. maybe this: ” Yes. However, we can hold the “transparency in government” democrats responsible if they do not reverse the republicans’ decision and go back to listing who voted how.”

    Were we holding the GOP to that standard before when they were in power or did the GOP never promise such transparency?

    My view is this just goes back and forth between the two parties – and when one if out of power -they, of course, say it’s time for the other one to “reform”.

  12. One could say that it’s not like the GOP in Va does not have a voting constituency, they clearly do and they clearly represent their values.

    Further, if the Dem candidate is truly a leftist not just in the minds of the far right – the GOP will win and they can win without winning NoVa – but they have to be competitive enough to add to the RoVa votes.

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