V18, N26 Thursday, Feb. 28, 2013 Interlocking issues for Pence, Assembly What became clear after a series of press avail- Issues of tax cuts, budget, abilities Wednesday was that the Pence income tax is at the mercy of the economy and sequestration, as well as sequestration and Medicaid the biennial budget, which in turn is interlocked with the begging for elusive answers prospect of Medicaid expansion, which in turn is bound by an emphatically hostile political attitude toward President By BRIAN A. HOWEY Obama and the Affordable Care Act, which, in reality, is the INDIANAPOLIS – With an array of historic, billion- law of the land. dollar questions hanging in the balance, and a gnawing The inescapable murmur in the marble Statehouse realization that the answers are increasingly elusive, the hallways is the potential of a Pence presidential run in Indiana General Assembly and Gov. Mike Pence arrived at the halfway calendar point this week. Continued on page 3 The Sequester firing line By MARK SCHOEFF JR. WASHINGTON – When $85 billion worth of au- tomatic spending cuts begin to take effect on Friday, the Crane Naval Surface Warfare Center ‘‘No. 1 is stop the drama, please. in southern Indiana will be in the fir- ing line. Stop the constant last-day The base will take a legislating. No. 2 is we $36-million hit to its budget between now and Sept. 30, when the first cannot continue to spend what round of the so-called sequester concludes, according to Democratic we don’t have.” Sen. Joe Donnelly. It’s part of the - U.S. Sen. Joe Donnelly down payment on $1.2 trillion in cuts over 10 years that Congress HOWEY Politics Indiana Page 2 Weekly Briefing on Indiana Politics Thursday, Feb. 28, 2013 www.HoweyPolitics.com Howey Politics Indiana is a non-partisan newsletter based in Indianapolis and Nashville, Ind. It was founded in 1994 in Fort Wayne. It is published by WWWHowey Media, LLC 405 Massachusetts Ave, President Obama with Senate Majority Leader Harry Reid and House Speaker John Suite 300 Boehner Wednesday at Statuary Hall at the unveiling of the Rosa Parks statue. Indianapolis, IN 46204 agreed to in 2011 to raise the debt problem.” limit. Young and other Republicans Brian A. Howey, Publisher Donnelly told reporters in a say that Obama got the tax increases Mark Schoeff Jr., Washington conference call on Wednesday that on the wealthy that he was seeking Jack E. Howey, editor taking a whack at Crane, as well as in the New Year’s Day legislation that other across-the-board sequester cuts, averted hundreds of billions of dollars is a bad way to reduce the federal of automatic tax hikes and spending Subscriptions deficit. cuts known as the fiscal cliff. $599 annually “I have been hopeful we That’s where Young and 'Call Adrian France can reach a thoughtful, smarter way Donnelly diverge. Donnelly supports 812.455.4070 or email to cut; that we can include revenues a Senate bill that likely will be voted [email protected] as well,” Donnelly said. down that would replace the sequester The gulf between Republicans with a mix of tax increases and spend- and Democrats over the sequester is ing cuts. On the revenue side is the Contact HPI illustrated by the stance taken by the so-called Buffett Rule, which would www.howeypolitics.com GOP lawmaker whose district lies next ensure that people earning more than [email protected] door to Crane. $1 million annually pay at least a 30 “Of course I’m concerned percent tax rate. 'Howey’s Cabin: 812.988.6520 about defense cuts,” Rep. Todd Young, Donnelly said that federal 'Howey’s cell: 317.506.0883 R-9th CD, said in a recent HPI inter- revenues are running at about 16 'Washington: 202-256-5822 view. “But I’m also concerned about percent of the economy, while spend- 'Business Office:812.455.4070 my children and grandchildren.”’ ing is at 23 percent. Spending needs Taking care of the next two to come down, but revenues also need © 2013, Howey Politics Indiana. generations requires that the country to increase. make substantial progress in reducing “We’re still shy on that [rev- All rights reserved. Photocopy- annual deficits that have topped $1 enue] number,” Donnelly said. “I hope ing, Internet forwarding, fax- trillion for the last several years and people realize that.” ing or reproducing in any form, a debt that totals about $16.4 trillion, That’s the interesting ques- whole or part, is a violation of according to Young. tion. Where will the American people federal law without permission “The president and Sen- come down on how to tackle the ate Democrats seem disinclined to budget? Over the next several weeks, from the publisher. v deal with what is driving our nation’s we’ll have a chance to see the debate deficit,” Young said. “We don’t have a evolve in real time. revenue problem, we have a spending This is not one of those issues HOWEY Politics Indiana Page 3 Weekly Briefing on Indiana Politics Thursday, Feb. 28, 2013 that requires waiting until the next election to sort out. As equation. They have to put something creative on the table March 1 dawns, the voters seem split on the efficacy of the that forces him and Democrats to walk away, if they want sequester. to establish bright lines between the parties on spending. But it may be difficult for Americans to make up The other outcome is that such a move forces their minds because much of the sequester won’t be felt Democrats to come up with a counter offer that goes be- until weeks or months down the road – and even then only yond trimming around the edges of deficit reduction. They in certain areas of the country. might engage with some of their own big ideas or come up That means that Republicans and Democrats with a way to make revenue increases more palatable to likely will enter the next budget battle – over a March 27 Republicans. deadline for shutting down the government – without much Ultimately, the best politics is for the sides to come evidence of who is winning. together to cure the nation’s fiscal ills. If they can’t do it in The situation creates an opening for bold thinking March of an off-year, they never will. about the budget in general and, specifically, reform of so- In perhaps a faint sign of such movement, cial insurance programs, such as Medicare. If Republicans Donnelly said that he is part of a group of 25 senators that truly want to find out how their cut-the-deficit stance is has been meeting to come up with a sequester alternative. working, they should call Obama’s bluff -- offer a big pack- They are gathering “just as Americans, not Democrats or age of structural spending reforms, and see how he reacts. Republicans.” At the moment, Obama continues to ride a popu- “Everybody agrees that there has to be a better larity wave that has him above 50 percent in job approval. way to do this,” Donnelly said. v It will be hard for Republicans to win the spending debate just by asserting that Obama has ignored that side of the Schoeff is HPI’s Washington correspondent. run, it will not achieve what it promises. However, it is now Interlocking issues, from page 1 the law of the land. I will make all my judgments as gover- 2016. It is a prospect the governor and his people eschew, nor based on what is best for New Jerseyans.” but it is the source of constant speculation and observers “This makes sense for the physical and fiscal health are beginning to look at the emerging decision set through of Michigan,” Snyder said in a Feb. 6 statement. that prism. Governors with presidential ambition find their Pence, however, described it in political terms, policy decisions scrutinized through a political lens. Gov. talking about the “gift of a baby elephant”: “Where the Evan Bayh was always perceived differently than, say, Bob government says, ‘Here’s a baby elephant. We’ll agree to Orr or Frank O’Bannon. pay for the hay for the next five years,’” Pence said, add- In the past two weeks, a parade of conservative, ing, “Washington is broke, with more than $16 trillion in Republican governors – all greatly hostile to Obamacare – national debt.” have made the controversial call to expand Medicaid during Indiana Senate President Pro Tempore David Long, a three-year period when the federal government will pick speaking in the Senate chambers Wednesday about an up 100% of the costs. Ohio’s John Kasich, Michigan’s Rick hour before Pence, acknowledged the exclusion of the Snyder, Florida’s Rick Pence income tax cut from the Scott and, on Wednesday, House-passed budget. New Jersey Gov. Chris “I don’t have an answer Christie, himself a poten- for you right now,” Long said tial presidential rival of of whether the Senate would Pence, have begrudgingly reinsert what has become opted for Medicaid expan- Pence’s top legislative prior- sion. ity. “We remain very, very, As Christie put it, very concerned about some “Let me be clear: I am no costs coming down the road fan of the Affordable Care in Obamacare. The continued Act. I think it is wrong costs just shake us. Medicaid, for New Jersey and for if we don’t do any expansion, America. I fought against Gov. Pence points to his mid-session scorecard on Wednesday in will cost us $1 billion.