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Noem Predicates Budget Caution on Bidenphobia, Undermined by BFM’s Own Rosy Economic Projections

Governor Kristi Noem used her budget address yesterday in Pierre as another platform for her campaign to replace to Joe Biden in 2024. She capped her budget proposal with this grim assessment of economic and fiscal oppression under the Biden Administration:

Frankly, I expect the road could be rough under a Biden administration.

We can expect him to try and raise taxes. Similarly, we can expect him to try and eliminate fossil fuels by passing the Green New Deal. And, whatever else a Biden administration might do, it would certainly drown us in new regulation. I expect Biden’s federal agencies to see South Dakota not as a partner but as a subordinate.

So, we must be prepared [Gov. Kristi Noem, FY 2022 Budget Address, as published in that Sioux Falls paper, 2020.12.08].

That must be why she wants to buy herself a new plane now, before President Biden raises taxes on the airplane industry.

But her own Bureau of Finance and Management estimates that the first year of the Biden Administration will bring economic growth nationally rather than the decline Donald Trump is leaving us with:

Bureau of Finance and Management, FY 2022 Budget Supplementary Slides, 2020.12.08, slide #3.
Bureau of Finance and Management, FY 2022 Budget Supplementary Slides, 2020.12.08, slide #3.

GDP down 3.6% this year with great gobs of government stimulus (Noem’s main budget slides show that South Dakota’s share of federal coronavirus relief equals over 7% of our 2019 GDP), up 3.1% next year even if the Biden Administration and Congress choose not to further goose the pandemic economy—that doesn’t sound like a rough economic road to me. Maybe I’ll buy myself a plane….

BFM sees housing starts slowing to 2019 levels after folks settle down and get over the notion that they can run away from coronavirus to a new ranch in Rapid, but they also forecast that we’ll recover all the jobs we’ve lost to Trump fever in two years:

BFM, 2020.12.08, Slide #4.
BFM, 2020.12.08, Slide #4.

BFM warns that total general fund revenues for Fiscal Year 2022 may slip $1.4 million below what we’re now expecting to take in this fiscal year, but with Noem proposing to sock away $50 million of our federal coronavirus relief money in a new trust fund and another $41.6 million in our budget reserve fund, that revenue dip is negligible.

Economic pessimism may be warranted in the short term, but only because of the failure of Noem and Trump to properly manage the pandemic the way most Americans want and set the stage for swifter economic recovery:

The Dow Jones taking out 30,000, and Pfizer and Moderna vaccine trials achieving up to 95% effectiveness haven’t stopped Americans’ view of the U.S. economy’s outlook from slipping into pessimistic territory, the December IBD/TIPP Poll finds. The growing toll of the coronavirus pandemic, the job market slowdown, and the lack of new federal stimulus likely kept Americans from focusing on the light at the end of the tunnel.

…The IBD/TIPP Poll finds that 41% of households have at least one member who is out of work and looking for employment. Another 42% are concerned about job loss in the household. Factoring in the overlap, the share of job-sensitive households is currently 58%.

Meanwhile, the IBD/TIPP Financial Related Stress Index dipped 1.3 points in December to 65.4, still the second highest reading since April. Readings above 50 reflect rising stress.

Yet Americans favor measures to restrain the spread of the coronavirus, even at a cost to the U.S. economy, by a 59%-30% margin [Jed Graham, “Economic Pessimism Returns Despite Vaccine, Dow Jones High: IBD/TIPP,” Investor’s Business Daily, 2020.12.08].

To tackle that pessimism and the real and pressing problems causing them, President-Elect Biden is not prioritizing any of the fake news Governor Noem is trying to shove into his mouth. Biden is prioritizing more of the practical assistance that kept us out of an even deeper recession this year:

Biden said he would press for more relief once he is in office.

“Any package passed in the lame-duck session is not going to be enough overall. It’s critical but it’s just a start. Congress is going to need to act again in January,” Biden told reporters in his hometown of Wilmington, Delaware.

“We’re looking at hundreds of billions of dollars,” he said.

Biden said he expected Republicans to join Democrats in delivering more coronavirus relief because “they are going to find there is an overwhelming need” [Trevor Hunnicutt, “Biden Urges Broad Action on Coronavirus Aid After ‘Grim’ Jobs Report,” Reuters, 2020.12.04].

Farm prices are already rebounding thanks to changing market conditions, and they’ll only get better under the boring, sane global trade policies of the Biden Administration. Biden’s economic and energy plans will put millions more Americans to work than four more years of Trump would have. Biden won’t sign the “Green New Deal,” but his vow to fight climate change will grow the economy in a long-term, sustainable fashion.

I don’t mind a conservative budget, but there’s no need to base the people’s budget on the Governor’s partisan hack lines. Save the campaigning for Fox News, Kristi; leave the budget projections to the BFM, which sees the economy growing in the first couple years of the Biden Administration.

10 Comments

  1. Loren 2020-12-09

    Don’t be too hard on Kristi, Cory. Imagine how embarrassed she must feel to show up at all her rodeo queen appearances in the old SD turboprop when all her new Trumper friends have Gulfstreams. Airplane envy! Maybe she can get a good deal on Donald’s used 757, the one with the gold toilets! Eat my contrail, libbies! @#%^&*! (insert eye roll)

  2. aaron 2020-12-09

    Being as how the future of the country is at stake I believe Kristi needs to leave governing this little burrow in the effective hands of Lt. Gov. Rhoden who shows no further ambitions that would distract him from the job, resign immediately and focus her efforts on procuring a slot on the 2024 ticket to again make America great again again.

  3. John 2020-12-09

    The US economy historically ALWAYS performs better under democratic presidents. She can have her own opinion but not her own facts.

  4. Donald Pay 2020-12-09

    Taxes will go up for middle class taxpayers in 2021. That was written into the Trump tax deform plan that Republicans passed. The middle tax cuts sunset, but guess what? The tax cuts for billionaires don’t sunset. It was always a bait and switch scam, and Covid Kristi was front and center pushing the scam.

  5. o 2020-12-09

    This all seems about right: Trump took credit for the fundamentals of a strong economy under Obama; now Biden will get saddled with any downturn from Trump’s undermining that economy from deficits, income disparity, and pandemic neglect.

    As I see more and more windmills up in my area, and more and more growling when ethanol subsidies are threatened, the is the SD opposition to the Green New Deal based on again?

  6. o 2020-12-09

    John, “having their own facts” is the CORNERSTONE of the GOP/Right/Conservative/Trump gang. Objective truth does not at all mix well with their political philosophy.

  7. Prairie Farmer 2020-12-09

    O: What exactly are the ethanol subsidies?

  8. o 2020-12-09

    Prairie Farmer,

    I was thinking both 1) the actual subsidy which is commonly referred to as the “blender’s credit,” which offers ethanol blenders registered with the Internal Revenue Service a tax credit of 45 cents for every gallon of pure ethanol they blend with gasoline and 2) the mandate to blend ethanol into fuels – in effect subsidizing the price by increasing the demand for corn. One is more a direct retailer subsidy, the other more an indirect farm subsidy.

  9. Prairie farmer 2020-12-09

    You mean more like the subsidies( tax breaks) that the oil companies have received for the last 80 years?

  10. o 2020-12-09

    Prairie Farmer, sorry, my comment on the Green New Deal was attempting to make the point that SD and Governor Noem are already doing pretty well from elements found in the Green New deal. Things like windmill infrastructure projects and ethanol monies are finding their way to SD. The Governor bad mouthing the GND seems hypocritical – or at least biting the hand that is helping to feed her state.

    I could not agree more that any of this spending is pennies compared to the subsidies we give to oil (of which SD doesn’t profit directly). The price subsidies, the costs in environmental clean up, the military costs to patrol the seas and fight wars in the Mid East to keep our supply safe, all cost tax payers – even SD taxpayers – a fortune. Big oil does not pay its way for the government services it uses.

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