Schwarzenegger Threatens Government Shutdown

The Governor's shock-doctrine approach to the current budget crisis became very apparent this week, as he engineered rejections of bipartisan stop-gap measures and solutions that would cover $21.5 billion of a $24 billion dollar deficit. He clearly would rather essentially shut down the state government than participate in the normal political process of compromise and negotiation. This is his chance to be a dictator, and he is banking on the desire of Democrats not to watch the lights go out in Sacramento to push through his agenda.

Gov. Arnold Schwarzenegger, seeking to conquer what could be the last budget crisis of his tenure, is engaged in a high-stakes negotiating strategy with lawmakers that could force him to preside over a meltdown of state government.

As legislators have scrambled to stop the state from postponing payment of its bills and issuing IOUs starting next week, the governor has vowed to veto any measure that fails to close the state's entire $24-billion deficit [...]

The governor readily admits that he sees the crisis as a chance to make big changes to government -- to "reform the system," he said Friday -- with proposals he has struggled to advance in the past.

Among them: reorganizing state bureaucracy, eliminating patronage boards and curbing fraud in social services that Democrats have traditionally protected. The governor also would like to move past the budget crisis to reach a deal on California's water problems that has so far eluded him.

By agreeing to a partial budget solution such as one the Assembly approved Thursday, the governor would lose leverage to accomplish many of those things. Without the pressure of imminent insolvency, Democrats might be less likely to agree to his demands.

This is a dangerous strategy - not for Schwarzenegger himself, but for the hundreds of thousands of Californians who depend on a functioning state government every day. Contrary to popular belief, the recipients of these IOUs would not be debtholders or vendors, but the most vulnerable people in society - families on welfare, the elderly, the blind, the disabled, and poor college students with state aid grants. These are the pawns in the game Arnold has been playing.

The Governor has brought back to the table long-sought goals that he wishes to implement over the protests of a majority of the legislature. Some of them are described in his weekly radio address. The LA Times has a good synopsis here:

Back on the governor's demand list is a plan to cut the pensions received by state workers, which unions have stymied before but which he thinks may gain traction with a cash-strapped public. Schwarzenegger also views this as an ideal time to once again target growth and fraud in the state's multibillion-dollar in-home healthcare program, which employs 300,000 unionized workers.

His agenda includes anti-fraud efforts and tougher enrollment requirements for the state's food stamp programs, efforts that advocates for the poor say are designed to discourage people from participating. In his radio address, he said the state and counties could get by with a "fraction" of the 27,000 workers now handling eligibility for Medi-Cal and food stamps by using Web-based enrollment.

Schwarzenegger has revived plans to allow local school districts to contract out for services like school bus transportation and lawn maintenance, a proposal favored by the GOP but despised by school employee unions.

Arnold has basically taken the lesson of the GOP, holding the budget hostage for pet projects like privatization and purging state services rolls of the dependent (I'm sure a lot of the desperately poor have Web access to fill out their forms).

One wonders if this will finally color the local coverage of the Governor, which throughout his tenure has been fawning, even in the face of near-historic unpopularity. Some reporters seem to be coming around.