A Gamble, a Threat and a Tradition: Take-Aways from Tuesday’s Senate Budget Fight

After three dramatic hours of debate, Senate Finance Chair Steve Ogden still did not have enough votes to bring the Senate budget up for debate Tuesday night. Senate Democrats stood unified against the measure—which left the chamber two votes shy of the 21 votes needed. Ogden has been scrounging for votes all week to pass the document, which is significantly more moderate than the House version. It includes significant cuts all around, but it also spends $11 billion more than the House budget on state services like schools and health care. At points last week, Ogden lacked support from members of both parties. Democrats argued the budget should spend more, while some Republicans objected to the bill’s use of $3 billion from the state’s Rainy Day Fund for the 2012-2013 biennium.

With only a few weeks until the end of the legislative session, Ogden made compromises to get the votes he desperately needed. The partisan split turned out to be one of the many unprecedented moments of the debate. First, he agreed to remove the Rainy Day money and opt for a riskier method of financing the bill (see below). He also made it clear that the Republicans have an opportunity to pass the budget even if they don’t have the two-thirds support normally required in the Senate. A caveat in the chamber rule allows simple majority votes on House bills during “House Bill Days.” This is hardly normal protocol, but no matter. Since the budget is technically a House bill—and since Wednesday is one of these House Bill Days—the budget debate will undoubtedly continue into Wednesday and likely through the end of the week. In the meantime, here are three key take-aways from the Senate’s debate.

The Tradition: Two-Thirds Rule At Risk 

As each Democrat rose to speak against the budget Tuesday night, almost everyone began by thanking Ogden. They emphasized how transparent and inclusive the budget process had been. Finally Ogden stopped one member. “I appreciate all this appreciation,” he said, “but what I really need is a couple of votes.” The Senate has always been the body of collegiality—and the two-thirds rule has helped ensure that bills get bipartisan support. But the body is also charged with passing a budget every legislative session, and the Republican leadership seems dead-set on getting something passed on the chamber floor. From the beginning of Tuesday’s debate, the threat to the Democrats was clear.

Once they had their “House Bill” loophole, Senate Republicans no longer needed the Democratic votes. But Ogden argued that he still desperately wanted to get two-thirds support and not diminish the rule. It amounted to an odd and latent threat: Don’t use your power or we’ll take it away from you.

Senators who did not vote to suspend the rules and debate the budget were “threatening” the tradition, Ogden said. “If we cannot suspend [the rules] with 21 votes, I am worried about the traditions of this Senate,” Ogden said. “That is why I have worked so hard and done everything I can possibly think of to get to 21 votes.”

Democratic Sen. John Whitmire, the longest-serving member of the Senate, spoke up. “You don’t really mean that those voting ‘no’ would be responsible for any demise of the two-thirds rule?” he asked incredulously. “You know that’s wrong.” Whitmire argued that the decision had in some ways already been made; if Republicans didn’t have their loophole, they would be negotiating with Democrats in back rooms rather than discussing the measure on the floor.

“The people in the state of Texas don’t give a diddle about the two-thirds rule,” Ogden shot back, arguing almost no Democrats were ever firmly committed to supporting the budget. 

The two-thirds rule has already weathered some storms. Sen. Dan Patrick, R-Houston, has frequently spoken against it, pushing for a less restrictive three-fifths rule. Last session and this time, the GOP senators made an exception for voter identification legislation, requiring that the controversial bill only need a majority vote. But with just over a third of the seats, Democrats have still been able to use the rule as a key bargaining chip.

After debate, both Ogden and Lt. Gov. David Dewhurst said they were still hoping to get two-thirds support tomorrow and eager to compromise with Democrats. But only up to a point. “I will get a budget passed out of here,” Dewhurst promised. 

And without the need for some bipartisan support, this is the end of an era.

 

The Gamble: The Financing of the Senate Budget

It turns out that the Legislature might rely on gambling to balance the budget this session after all. As part of a bid to win support from his Republican colleagues in the Senate, Ogden opted not to use $3 billion from the Rainy Day Fund.

Instead, he unveiled a complex scheme to replace that $3 billion by essentially betting that the state economy will dramatically improve over the next two years. It’s the type of odds the house in Vegas—or maybe an ultra-conservative House in Texas—might like.

It’s also an interesting exercise in math that Ogden only partially explained Tuesday.  About $1.25 billion would come from delaying Medicaid payments until the next biennium.

Sen. John Whitmire (D-Houston) asked Ogden whether that would simply mean tapping the Rainy Day Fund to pay those bills when they come due two years from now.

“How do you pay for that?,” replied Ogden. “I don’t know but I think the economy is going to grow and revenues are going to be much higher than the Comptroller estimates. We could be running a surplus two years from now.”

And what if the best-laid plans of budget-writers don’t come true? Ogden’s proposal includes a 1.2 percent across-the-board cut to state agencies if revenues don’t improve. That works out to about $690 million.

If you’re good at math, you’ve already figured out that the numbers don’t add up to $3 billion. And that’s where things get interesting. At least twice today, Ogden hinted at tapping the Rainy Day Fund when the so-called “supplemental” spending bill for the current 2010-2011 budget comes up for debate. Recall that the state of Texas also has a budget deficit for this biennium (2010-2011) that must be dealt with as well. The House patched the hole by using $3 billion from the Rainy Day Fund and $1 billion in cuts. That’s packaged up in House Bill 4, which the Senate has yet to vote on.

“I think it’s more than appropriate for us to debate how much of the Rainy Day Fund, if any, to fund House Bill 4,” Ogden mysteriously told one of his colleagues today.

Later, Ogden refused to elaborate to the press. Who wants to bet that more high budgetary shenanigans will unfold tomorrow?

The Threat: Role of the House in the Senate Budget Debate

 There’s more than enough blame to go around for the Senate’s near meltdown over the budget the past week. But the people perhaps most responsible for the impasse reside across the Capitol rotunda—in the Texas House.

The House, you’ll remember, passed an austere budget last month that sliced $23 billion from state spending. The reductions to public education and health and human services were particularly deep. If the House budget were implemented, many policy experts predict closures of schools and nursing homes.

For Senate Democrats—and Senate Republicans for that matter—the House version of the budget represents a shocking, almost cruel level of spending that must be avoided at all cost.

During Tuesday’s budget debate, Democrats Royce West and John Whitmire said publicly what many insiders had speculated: Senate Democrats don’t hate the Senate’s version of the budget. Rather they fear what will happen when a conference committee melds the Senate’s budget with the dreaded House version.

The Senate budget looks rather moderate. It relies heavily on cuts, but it spends $11 billion more than the House. The Senate version funds key areas such as public education, Medicaid, Child Protective Services and mental health at much higher levels.

The problem for the Democrats was they had only one weapon at their disposal—the two-thirds rule. And they had one chance to block the budget and force a special session this summer. Once the budget comes back from conference committee, the Senate can approve it with straight majority vote—an outcome the 12 Democrats in the Senate couldn’t impact.

If the Senate budget were standing on its own merits, some Democrats might have supported it. Whitmire and West both indicated on the floor today that Democrats had asked the leadership—Dewhurst and Ogden—for another two-thirds vote after the budget returns from conference committee. That request was turned down.

So Democrats chose to block the budget while they still could. Ogden needed just two Democratic votes to pass the budget. He could scrounge up only one.

Had the House version been less radical, it’s likely Senate Democrats would have been more accommodating.

The budget debate in the Senate has been a mess. But the House is largely to blame.