One-Sided Negotiations

Boy, if you managed to stumble upon pages M8 and M9 of Sunday's LA Times yesterday, you sure picked up a great deal of information. On M8 was my Calitics buddy Robert's excellent critique of the Times' coverage of tax policy. And on M9 was a column by Anthony York of Capitol Weekly, which seeks to explain why legislative Democrats appear to be negotiating with themselves on health care reform. We learn that the Governor is basically holding his endorsement of Prop. 93 hostage in exchange for getting his way on health care.

Nuñez is scheduled to be termed out of the Assembly in November. If Proposition 93 passes, however, he could serve in the Assembly -- and presumably as speaker -- for six more years. If the measure fails, Nuñez would immediately become a lame-duck speaker, and talk of a successor would begin Feb. 6.

That's why he desperately needs Schwarzenegger's endorsement of Proposition 93. Most observers believe that voters will defeat the measure if it lacks the governor's seal of approval.

But Schwarzenegger's support comes at a price. The governor has consistently used Nuñez's desire to change the term-limits law as leverage in his negotiations with the speaker about healthcare reform, and it seems to be paying off.

We all suspected this was the case, but this appears to be more informed than opinion. So now we have a negotiation that's going to affect millions of Californians being predicated on the political career of one man. Nuñez is completely compromised, not only by needing to get a legislative victory to tout to the electorate, but by receiving the Schwarzenegger endorsement. Personally, I'm unconvinced that his endorsement is such a slam-dunk; it sure wasn't in 2005.

We see the direction that the negotiations have taken. First the Democrats were fully opposed to an individual mandate. Then they agreed to a mandate with cost controls (exemptions if coverage costs more than 6.5% of income). Then they'll drop that number. First the plan was that businesses would pay 8% in fees; then it became a sliding scale up to 6%; then it'll be down to 4, or 3, or really whatever the Governor wants. This is no way to negotiate. The Governor has absolutely no reason to budge off his numbers.

The Governor clearly cares about leaving a legacy on healthcare reform, and a smart negotiating strategy would tie that legacy to specifics that could not be compromised. But that's clearly not how it's being waged. And York even explains how a savvy negotiator could turn this right around.

If a (health care funding) plan ends up on the ballot, it would be a tough sell. All previous healthcare initiatives have been defeated. And with current budget forecasts for 2008 putting the revenue shortfall at $10 billion, an expensive reform plan -- some estimates put the price tag at $12 billion -- would face even more trouble. To win passage, Schwarzenegger will need help from unions and Nuñez. But if Proposition 93 fails in February, the lame-duck Nuñez could be ousted as speaker, losing his bully pulpit to campaign for reform.That would leave Republican Schwarzenegger as the face of a campaign relying heavily on unions and other Democratic-friendly groups while confronting stiff opposition from many business groups.

The Governor actually needs the Legislature as much as the Legislature needs the Governor. But that's not how the battle is being fought, because the Democrats have decided to put themselves in a position of weakness.