Budget Stalement: Winners and Losers

It has been quite the week in Virginia politics.  First, there was the surprise resignation of Senator Phil Puckett causing a tectonic shift in Virginia politics ceding control of the Senate to Republicans. Then, House Majority Leader Eric Cantor shockingly lost his primary to an underfunded college professor. These two events completely changed the political landscape in Virginia and laid the groundwork for last night’s conclusion to the budget stalemate.  With the Senate now in Republican control, the General Assembly moved quickly to end the budget stalemate.  But it wouldn’t be Virginia politics this week if it went as planned.  What was expected to be a quick vote on the budget dragged into the late night hours with conservatives in the Virginia Senate insisting on an amendment to clearly restrict the Governor’s authority to expand Medicaid unilaterally, even though many legislators believed the language they agreed to last year surrounding the Medicaid Innovation and Reform Committee (MIRC) accomplished the same goal.

Why then did they strengthen the language?  Well, one only has to look at the winners and losers of the last week in Virginia politics to understand:


Governor Terry McAuliffe:  The lesson for Governor McAuliffe is clear.  His decision to leak that DMAS was laying the groundwork for expansion and he was considering unilaterally expanding Medicaid if the General Assembly failed to do so certainly drove the Assembly to try and craft language in such a way to ensure that the Governor cannot act without legislative approval.  It also has to be personally embarrassing for someone considered a strong national political operative to be so badly outmaneuvered by a handful of state senators.

Attorney General Mark Herring:  The complete disregard of the rule of law by the Attorney General regarding Virginia’s constitutional amendment defining marriage between one man and one woman and his creative reading of the law surrounding in state tuition for illegal aliens certainly weighed on the mind of legislators last night.  The Family Foundation spoke to several attorneys in and out of the General Assembly yesterday and all agreed that the budget language agreed to last year should prohibit unilateral expansion by the Governor, but they couldn’t be sure that the Attorney General would abide by the law unless it was strengthened and made unambiguous.

Lieutenant Governor Ralph Northam:  Already being heavily outmaneuvered on the left by Attorney General Mark Herring for the 2017 democratic gubernatorial nomination, he loses his one bastion of power, the ability to provide control of the Senate to democrats.  He will still have the occasional tie vote to break, but his ability to be in the spotlight as a power player took a significant hit.

Virginia Hospitals:  The Virginia Hospital & Healthcare Association put on a full court press to find a way to expand Medicaid.  While they primarily pushed for what they considered to be a private sector solution, the General Assembly and much of the public considered it Medicaid expansion by another name. The full court press they put on the Assembly angered many Republicans and Conservatives in the House and Senate.  Not only did the hospital’s political clout take a hit, so did their wallets.  While budget cuts had to be made to address the shortfall, it is noteworthy that the budget strips an increase in Medicaid reimbursement to address inflation for Virginia’s hospitals and stripped $15 million for indigent care at Virginia’s academic medical centers.

Senate Democrats:  Their control of the senate was short lived.  The hostile takeover of the Senate in January may be a distant memory, but it wasn’t forgotten last night.  With the resignation of Senator Puckett, and the strong likelihood of a Republican winning the special election, Governor McAuliffe’s ability to pursue his liberal agenda took a body blow.  The senate will be reorganized with Republican majorities on the key committees and liberals are left looking to 2015 and hoping the elections will be generous to them.

Senators Stosch, Watkins and Hanger:  First they angered conservatives by supporting the Marketplace plan to expand Medicaid.  Then they angered liberals by voting for the budget language eliminating the Governor’s ability to unilaterally expand Medicaid. These three senators have achieved a rarity in politics, they have angered every side to an issue.  While The Family Foundation applauds their vote on the budget last night, we recognize the difficult position they have placed themselves.


Grassroots/Tea Party:  Upending House Majority Eric Cantor in a shocking primary defeat to college professor David Brat was a significant and unexpected victory.  While national pundits quickly signaled that the shockwaves from Cantor’s defeat would mean no immigration reform or other significant legislative action will occur in Washington, it was easy to overlook the impact on Virginian’s budget stalemate.  Many of the grassroots and tea party leaders who supported Dave Brat quickly sounded the alarm last night promoting Senator Dick Black’s budget amendment and warning that the language from last year’s budget may not be ironclad.  One has to believe that legislators recognized the newly gained clout and quickly worked to strengthen the budget language.

Senator Tommy Norment:  “Majority Leader Norment.”  Need I say more?  The new majority leader in the Senate is known for his shrewd political maneuvering and certainly used his skill and knowledge over the past week to seize control of the Senate and resolve the budget stalemate that threatened to shutdown state government.

House Speaker William Howell:  Speaker Howell certainly comes out of the budget imbroglio as the most powerful man in Virginia politics.  He held his caucus together in lockstep against Medicaid expansion and gained the high ground in the media and public relations battle over who would be blamed for a government shutdown and whether Medicaid expansion was good for the Commonwealth.  By stopping Medicaid expansion, Speaker Howell and the House of Delegates changed the narrative and the expectation after the Warner tax hike that they would cave to the Governor and/or Senate.

House Republicans:  They held together and took a principled stand in a way many did not expect and stood up to the charm offensive led by Governor McAuliffe and the deep pockets of the lobbyists pushing for expansion.

Senator Dick Black:  Introduced a budget amendment that ensured the Governor would not be able to unilaterally expand Medicaid and held firm in the face of pressure.  Although his amendment was not successful, without it and his leadership, the enacted budget would not clearly limit the Governor’s power.

Senator Tom Garrett:  Masterfully used social media to alert the grassroots to the internal debate within the Republican caucus and made clear that he was resolute to any budget that left the door open for the Governor to expand.

Senator Bill Stanley:  While Senator Black’s amendment ultimately failed, Senator Stanley rode in to save the day with two amendments that accomplished the same goal and gave a majority of Senators language they could support.  His insider negotiation skills and developing influence within the Senate Republican Caucus is something to watch.

What happens next?  The Governor has seven days to amend or veto the budget once it lands on his desk.  Undoubtedly, he will strip or amend the language agreed to last night.  The House of Delegates will almost assuredly reject his amendment leaving the Governor no choice but to sign the budget or veto it and shutdown Virginia government.  It appears to be checkmate in favor of those opposed to expansion, but if the last week has taught us anything, we know anything can and will happen in Virginia politics.  We must all keep an eye on the Governor’s budget amendments and make sure that our legislators know where we stand to ensure once and for all that Medicaid expansion will not occur this year.