Walking Backwards In Indian Wells

In 2006, the Schwarzenegger campaign uncorked an ad almost immediately after the primaries showing Phil Angelides walking backwards, the assumption being that he would take the state backwards as well. One of the ads liberally quoted Angelides' rival for the Democratic nomination, Steve Westly, using the bruising primary against the winner. “What if Steve Westly was right?” the announcer says, after citing Westly's rhetoric in claiming that Angelides favored $10 billion in new taxes. Steve Westly wrote most of Arnold Schwarzenegger's early strategy and even his campaign spots, as Angelides was defined by his opponent swiftly.

Steve Poizner basically bestowed the same gift on eMeg Whitman over the weekend. The ads about Whitman's failure to register to vote for 28 years write themselves, but Poizner took the liberty of making the ad. If Republicans know how to do one thing well, it's go hard negative, and this ad will probably be very effective to the GOP primary audience. It will also be effective as a "here's what Republicans say about Meg Whitman" ad next year, should see prevail in the primary. Poizner actually reiterated his call for Whitman to drop out of the race "for the good of the party" over the weekend at the Republican convention in Indian Wells. The issue received major pickup throughout the media.



And Whitman did herself no favors at all with some of the worst damage control you'll see in politics, as she repeated like a mantra this line about how "there is no excuse for my voting record," completely avoiding any specifics about why. If she manages to win the primary, expect to hear this audio right through to next November. It's cringe-worthy.

I'm guessing the Republican Governor's Association just tried to pull back their invitation to Meg Whitman to come to any of their gala events.

This is terrible crisis management, of course. And it suggests that the general election would be no kinder on eMeg. But it's not like the split in the US Senate race, with serial non-voter Carlyfornia going up against wingnut conservative Chuck DeVore (The LA Times gets this wrong by trying to impose a blanket comparison). The Yacht Party grassroots has figured out that they have no candidate in the Republican primary, and regardless of who wins they probably won't be all that excited to work for the top of the ticket.

For activists such as Mike Spence, past president of the conservative California Republican Assembly, such centrist talk inspires unease following what they said was Gov. Arnold Schwarzenegger's betrayal of the Republican base.

Spence called the Republican governor a failure and blasted him for breaking his promises to conservatives by, among other things, approving the biggest tax increase in state history earlier this year. Schwarzenegger has also championed traditionally liberal causes such as Assembly Bill 32, which requires the state to reduce greenhouse-gas emissions by about 25 percent by 2020.

"After the governor, people are cautious about who they support," Spence said.

Of course, this could be true of the Democratic grassroots as well, depending on circumstances. I think the only certainty in next year's elections will be the low turnout, as a slice of both sides stay home for their own reasons. But the Yacht Party's cast of characters look particularly uninspiring.

Yacht Party Rushes To Tout Snake Oil That Works, Works, Works!

Around 11:00 this morning some senior Yacht Party members and their acolytes will stand in front of microphones in Sacramento trumpeting a report about state labor regulations and small businesses. They can be expected to say that the real problem with the California economy is all those gosh darn regulations, and if only businesses could free themselves from the iron boot of - I don't know, the 40-hour work week, child labor, the right to have an employee saw off his fingers in a lathe without responsibility, it's a different thing every week with these people - the state could be saved.

It's worth understanding what this report that makes them go ga-ga is all about. John Myers had a sketch of it the other day.

The document, wonkishly titled Cost of State Regulations on California Small Business Study, was quietly made public late yesterday. You can read it here [...]

The summary says it all, at least in the eyes of the business community:

The study finds that the total cost of [business]regulation to the State of California is $492.994 billion which is almost five times the State's general fund budget, and almost a third of the State's gross product. The cost of regulation results in an employment loss of 3.8 million jobs which is a tenth of the State's population. Since small business constitute 99.2% of all employer businesses in California, and all of non-employer business, the regulatory cost is borne almost completely by small business. The total cost of regulation was $134,122.48 per small business in California in 2007, labor income not created or lost was $4,359.55 per small business, indirect business taxes not generated or lost were $57,260.15 per small business, and finally roughly one job lost per small business.

Basically, regulations take your wives, enslave your children, throw your ice cream on the ground, and write "loser" on your chest in sun tan lotion when you fall asleep at the beach. It's amazing how in line this study is with standard conservative tropes about onerous regulations and big government. I wonder why that is? Here's Myers.

So how do (authors Sanjay Varshney and Dennis Tootelian) reach their conclusions? The 33 page report (85 pages if you include the charts) relies heavily on Forbes Magazine and its annual report of the best -- and worst -- states in which to do business. The 2008 report ranks California #40 in the nation, and that's the relative placement the authors used for their calculations.

"Forbes data is reliable," says the study, "in that it uses credible sources of secondary data that are well recognized and respected as credible independent research in the business world."

Perhaps, but Forbes' proprietary methodology isn't entirely transparent. Its website does note the sources for its rankings: data from both the federal government and nonprofits like the Tax Foundation and the conservative-leaning Pacific Research Institute.

This "academic" study cribbed their data from a MAGAZINE profile? One owned by a movement conservative, which includes materials from wingnut welfare think tanks? And we're supposed to just let that go?

Myers goes on to note that the way Varshney and Tootelian transform the Forbes data into dollar amounts is entirely inscrutable, but designed to advance the proposition that every single state's set of regulations are harmful to business. "Even Forbes' #1 state for business friendliness, Virginia, comes out with a regulatory climate that's a net loss to the state of $4.4 billion." The study also neglects to determine which regulations harm business more or less. It's a partisan mess of a report and it should not be taken seriously. Which is why the Yacht Party has taken to it so quickly, with classy headlines like "California Businesses Waterboarded by Governmental Overregulation."

Look, labor regulations serve a particular purpose. It's true that they have a cost to business, but they also provide a significant cost savings to the individual, to the public health system, to the overall quality of life for the laborer. We have made these trade-offs over hundreds of years. The Yacht Party may think that The Jungle is a fantasy utopia, but in my experience, Californians and pretty much everybody else appreciate safe food and clean air and the minimum wage.

You can get a good sense of the intellectual honesty of a politician - and the media - by seeing if they bite at this crap sandwich of a report.

Yacht Party Hijackers

George Skelton finds a nut:

The two-thirds rule is not used merely to protect taxpayers from politicians trying to reach deeper into their pockets. It's used by special interests -- mainly big business -- to game the system; a tool handy for legislative leverage, or extortion. If you don't give us what we want, we'll withhold the votes needed for the two-thirds.

It's about buying and selling. Last Friday, at the all-night windup of this year's regular legislative session, Democrats weren't in a buying mood.

This is what happened, according to Democrats, and Republicans aren't exactly denying it: The Senate GOP blocked more than 20 bills requiring a two-thirds vote because Democrats wouldn't cave on three unrelated demands.

This has been true for years if not decades. The 2/3 rule does not protect tax increases, it's a tool for the Yacht Party to hijack the process. In this case, the GOP wanted to create a forced market for Intuit, makers of TurboTax; to increase the corporate tax breaks from the Februrary budget deal, in particular to help Chevron; and to make Roy Ashburn a lead author on a Democratic bill. See if you can find the word "tax increase" in there. But because the Democrats didn't much feel like giving out even more corporate welfare or fattening the pockets of Intuit, the Yacht Party revolted. And they knocked down 20 bills, including one that would keep domestic violence shelters open throughout the state (which is nothing more than homicide prevention) by shifting available funds, and another to allow the Treasurer more leeway to renegotiate with banks and save the state $850 million dollars.

These and the other bills, again, did not involve tax increases. They were taken up under urgency requirements (so the policy takes effect immediately) or other factors, like changes to the budget, which necessitate a 2/3 vote. And the Yacht Party routinely takes advantage of this, mainly out of spite and an attempt to leverage their votes to reward their corporate backers.

Ashburn candidly defends blocking the legislation: "This was an opportunity for Republicans to have some leverage." Concerning the merits of measures buried in the fallout: "The subject matter of bills at that point was secondary to what the [GOP] caucus had decided to do with them."

This is a pretty startling admission. But not one anybody wasn't aware of before now.

Skelton has deciphered the problem pretty clearly, and Democrats are well-positioned to highlight it and show the disaster of governance ushered in by the onerous 2/3 rules.

Will they?

Spanky Duvall Just A Master Storyteller

Somehow, Michael "Spanky" Duvall thinks that he can get away with this statement:

Assemblyman Duvall Denies Reports that He Had Affair

I want to make it clear that my decision to resign is in no way an admission that I had an affair or affairs. My offense was engaging in inappropriate story-telling and I regret my language and choice of words. The resulting media coverage was proving to be an unneeded distraction to my colleagues and I resigned in the hope that my decision would allow them to return to the business of the state.

Apparently, Duvall was spinning a tale, in a private conversation never meant to be heard by anyone but his colleague, about a man named "Michael Duvall" who just happened to be sleeping with the same woman that everyone in Sacramento has seen him palling around with for the last several months. It was a bit of magical realism, I guess.

Actually, Duvall would be legally culpable if he admitted an affair with an industry lobbyist on a committee on which he sat. So this is CYA stuff.

I'm beginning to rethink my position that a Yacht Party member is equal in value to an empty chair in the Legislature. Actually, the empty chair has significant advantages. It's a predictable non-vote, equivalent to a no vote under the 2/3 rules, and crucially, the empty chair has almost no possibility of ever saying anything this stupid. I wouldn't be surprised if the Yacht Party just decided to keep the seat vacant. Would save them a lot of trouble.

California, Where Only Republican Concerns Matter

It looks like the Governor and the Legislature have resolved the issue over prison reform in the budget by setting that piece aside as a separate issue to be decided later.

Legislative leaders and Gov. Arnold Schwarzenegger defused an issue today that threatened to blow up a fragile compromise over the plan to erase the state's $26.3-billion budget deficit.

Instead, Senate President Darrell Steinberg, D-Sacramento, and Assembly Speaker Karen Bass, D-Los Angeles, said both houses would vote on the plan Thursday night - but without an element that would prescribe details of a $1.2 billion cut in spending on prisons. A vote on that part of the plan will be delayed until next month, the leaders said.

"Everything's on track," said Steinberg, after he and Bass met privately with Schwarzenegger in his office. The governor popped out after the Democratic leaders left to dismiss the issue as just one of "some hiccups, and some obstacles and bumps in the road ... there will be some difficult moments, but the bottom line is we are going to get this budget done."

I see, so a plank of the budget that involves policy changes will be put off until another time.

Gee, that doesn't seem to be the accommodation made for privatizing the welfare enrollment process. Or enacting measures like background checks and fingerprinting for IHSS clients and recipients. Or drilling at Tranquillon Ridge. Or selling the State Compensation Insurance Fund. Or the lobbyist-fueled deal to extend redevelopment projects and borrow against the funds. All of those are huge policy changes, some of them unrelated to the current budget, that reflect mainly conservative perspectives. They must be passed now, now, now, but because Republicans threw a fit and distorted the intent, a pretty modest (though necessary) prison reform part of the package, with savings of $1.2 billion dollars, gets delayed.

These dead of night budget deals and the disproportionate urgency placed on them are fruits of a poisoned, horrible broken process for determining budgets in this state. It's why everyone with a brain considers this not only a bad deal but one we'll have to revisit in a few months anyway.

And this is what we're talking about when we talk about the shame of the Democrats for giving in on virtually every part of this negotiation, without exception, and for failing to show the leadership for thirty years necessary to stand up to a broken process and actually do something about it.

In most public schools expect larger classes, fewer counselors and librarians, and a slimmer menu of arts classes and athletic programs -- and maybe a tighter array of courses generally. More subtly, the quality of all services, from graduate programs at Berkeley to the condition – and maybe the safety – of the neighborhood park will decline. Will any of those things – and there are countless more – bring the realization that you can’t have a great state, or maybe even a decent one, on the cheap?

What’s badly wanted here is political leadership with courageous enough to talk about that link and not celebrate surrender to the anti-tax fanatics of the right. In this current budget deal, the Democrats got a few face-savers on education funding and welfare reductions, but in the end, despite all the nervous smiles, they lost.

The New York Times today writes that a "pinch of reality" has threatened the California dream. Yet the political leadership still live in dreamworld, seemingly satisfied with the broken structure of government, confined to a short-term strategy and a political process that works for them as individuals but for none of their constituents, and just unable to operate against a minority the public hates but which runs circles around them. We have deferred that California dream for so long that it may be unable to get it back. But without a functioning democracy, and with a majority leadership that has practically abdicated responsibility in the face of a conservative veto, you can be sure of that proposition.

The Yacht Party Will Not Vote For The Budget; The Democratic Party Will Not Learn From It

If you get a chance, take a listen to Warren Olney's Which Way, LA? tonight. You can find it right here.



The California portion starts about halfway in, at around 28:40.

So Warren Olney describes the craptacular deal, and then has two lawmakers on to talk about it. First up is Bonnie Lowenthal, who is positively ebullient about the prospect of selling out local governments and breaking the very fabric of the social safety net. Asked if she'll vote for the budget, she goes "I certainly am!" Olney, incredulously, lists the scope of the cuts, but she replies, "We have a deal, the stalemate is done, the IOUs will be over!" Later in the show, she enlightens us that it's better to have something than nothing, and that we saved the "framework" - not the funding, just the framework - of most programs.

Then Chuck DeVore comes on. Now DeVore is running for US Senate, and needs to be as crazy as he wants to be. So Olney asks him if he's voting for the budget. And he says he hasn't read it, but it didn't go far enough with the "reforms" and cuts to programs. (He also uses the spanking new right-wing canard that California has 12% of the population and 32% of the welfare recipients, which is only true if you count all kinds of services that other states don't consider welfare as welfare) Then Olney says that there were no new taxes in the deal, and DeVore hails that, and eventually says "this is the best compromise we could possibly get." And Olney says, "So then you'll vote for it." And DeVore says "No."

I guess DeVore didn't get handed his talking points that he's supposed to throw a hissy fit about a fake report in the LA Times regarding early release, almost certainly planted by Sam Blakeslee to give cover to Yacht Partiers who want to vote against the budget.

I don't think you could encapsulate the strategy and approach of the two parties better in a work of fiction. Lowenthal is just pleased as punch for everything to be over, DeVore knows he can get more and doesn't want any part of his own handiwork so Democrats can be blamed for the consequences. One side looks only to put out immediate fires and the other has a long game strategy playing out over decades.

It is not pleasing to be a Democrat at this juncture.

Intrigue

Very interesting stuff going on.

This afternoon we got the Leak of the Week from Capitol Weekly - a look at Dennis Hollingsworth's letter to his entire caucus. It's in budget-ese, but Zed is positively giddy about all the cuts to social services, all the denial of fee increases, and he's basically telling his caucus they got everything they wanted. It was good to see the inside thinking, especially if Yacht Party members turned around and voted against the budget. They know that their preferred option is deeply unpopular, and would rather distance themselves from this solution and make the Democrats own the budget. So this was a key document counteracting that.

Then at around 2:30, Michael Rothfeld changed his original process story about legislators building support for the deal into this bombshell:

The state budget deal negotiated by Gov. Arnold Schwarzenegger and legislative leaders would reduce the population of California prisons by nearly 27,000 inmates in the current fiscal year.

That would be done with a combination of new measures, including allowing some inmates to finish their sentences on home detention, creating new incentives for completion of rehabilitation programs and scaling back parole supervision for the least serious offenders.

The proposal, details of which were obtained by The Times, would save a total of $1.2 billion in the coming year.

It is unclear whether Republicans will vote for a budget plan that includes reduction of the state prison system, which now houses 170,000 inmates. Some GOP votes are needed to pass a budget in California.

If Republicans demur, the Democrats who dominate the Legislature could approve the prison proposal as separate legislation with a simple majority vote, which would not require GOP support [...]

The budget plan also would create a sentencing commission to reexamine the state penal code, which would not save money immediately but would advance plans under discussion by lawmakers for years. The commission would be charged with establishing new sentencing guidelines by July 1, 2012.

Prisons are slated for $1.2 billion in cuts in the budget, and most stories last night claimed that included no early release. Clearly Republicans - and possibly the Governor - saw those cuts as best employed by turning the prisons into Public Storage units, cutting all drug treatment and vocational training programs and reducing corrections officer overtime. So this looked to be a bait-and-switch by the Democratic legislature.

Except nobody seems to know how the LA Times got this story. And less than an hour later, Sam Blakeslee alerts the media:

Throughout budget negotiations we insisted that Republican votes would never be provided for a budget deal that included early release of prisoners.

Our caucus and staff developed a cut strategy for corrections that provided the necessary savings to close the deficit without risking public safety.

We had a clear understanding with the democrats that NO corrections bill would be a part of the budget and that we would have an honest chance to contest the policy issues in the light of day in August.

Just two hours ago I learned from staff that Senate democrats are concocting a radioactive corrections bill that includeds the worst of the worst _ sentencing commission and release of 27,000 prisoners, etc

When I spoke with Dennis he was as surprised and upset as I was regarding what appears to be a serious breach of the agreement in the Big 5.

I have called and personally told both Karen and Darrell that their will be no republican votes for any portion of the budget if they allow such a bill to be part of the package.

This seems just a little too neat to me. This report was leaked to the Times anonymously, after a separate email from the Senate GOP gets leaked showing what a great snow job they think they got over the Democrats. And then Blakeslee has an email out to his caucus - within less than an hour of the story leak - that comes up with a credible reason to shut down the deal, blaming those double-crossing Democrats.

FWIW I'd love a sentencing commission/early release of nonviolent offenders bill to become a reality, but I hardly believe that Senate Democrats, who as a caucus have participated in 30 years' worth of sentencing increases, and who scuttled a sentencing commission bill from Gloria Romero just last year, would sneak this into a budget bill out of nowhere, with complete language less than a day after a deal was reached. It would be completely out of line with prior history. It doesn't scan at all.

But it's sure a bonne chance for Republicans to have this fall in their lap...

...OK, so the Governor's Corrections Secy is briefing reporters. And will you look at that, the Times' story was wrong, as was Asm. Blakeslee! The report of 27,000 released is misleading, says the Secretary, but the Administration is interested in some reforms, including a sentencing commission. Wow, that's great, at least in theory. They are offering early release credits that would maybe release 1,700 total. This looks more and more like a coordinated hissy fit laundered through a compliant media.

The Inevitable Tax Drop

You can almost set your watch by it. The state budget picture is a mess, Democrats ask for a balanced solution, Republicans hold their ground and say no, Democrats don't have the vote so they let it go. It happens practically every single year, and it's happening again, according to CapAlert:

Gov. Arnold Schwarzenegger and Senate President Pro Tem Darrell Steinberg said separately Thursday that they are optimistic a budget deal can be struck within several days.

The tone of their comments marked a stark contrast to Capitol fighting over the last few weeks between Democrats and Republicans over bridging the state's $26.3 billion budget gap.

Steinberg also said Democrats had given up any attempt to increase taxes on tobacco or establish an oil severance tax [...]

The Senate president said that Democrats no longer are pushing for a 9.9 percent tax on oil extraction or for hiking the state's tobacco tax by $1.50 per pack.

"We would like to see an increase in the tobacco tax and the oil severance tax as a solution, but in this chapter that's not realistic and it's not what we're holding out for," Steinberg said.

It's never going to be realistic in ANY CHAPTER. Republicans know exactly how to play this game. Their votes are needed for tax increases, so if they hang together they cannot lose. The Democrats haven't figured out how to shame the Yacht Party or make them pay for their votes, giving them no reason to do anything but hijack the process. You'll notice that as a result of this horrific experiment in governance, California is operating worse than practically every other state in the union.

We've seen this kind of "it's almost over" trial balloon on many occasions, so I wouldn't put on the party hats just yet. But somehow at the end of this process, somebody will step up to a microphone and claim how reaching agreement is a sign of success. No. It's a sign of failure. A failure to responsibly manage the state's finances, reflected by the worst economy in 70 years. The only lesson that can be learned from this process is that it's fundamentally broken.

P.S. You'll be thrilled to know that Schwarzenegger still sleeps well at night.

Schwarzenegger and I then repaired to a tent that he had put up in a courtyard next to his office, which allows him to smoke cigars legally at work (no smoking is allowed inside the Capitol). The tent is about 15 square feet, carpeted with artificial turf and outfitted with stylish furniture, an iPod, a video-conferencing terminal, trays of almonds, a chess table, a refrigerator and a large photo of the governor. Schwarzenegger reclined deeply in his chair, lighted an eight-inch cigar and declared himself “perfectly fine,” despite the fiscal debacle and personal heartsickness all around him. “Someone else might walk out of here every day depressed, but I don’t walk out of here depressed,” Schwarzenegger said. Whatever happens, “I will sit down in my Jacuzzi tonight,” he said. “I’m going to lay back with a stogie.”

This is the guy who dares to chide others for not doing their job.

Après Aujourd'hui, Le Déluge

I suppose the only good news to come out of last night, and indeed this entire cycle of budget nightmares, is that we are not alone. Several other states missed their fiscal year deadlines. Illinois has no budget and no plans to enact one; Pennsylvania may not be able to pay state employees due to a failure to reach agreement; Arizona got a budget in under the wire, but the Governor has not indicated whether or not she'll sign it, because it doesn't include a sales tax increase she sought; Ohio approved a temporary 7-day budget as legislators continued to wrangle; Mississippi left their utility regulatory agency unfunded; Connecticut's Governor signed an executive order to keep the government running despite no budget. We can take little solace in these difficulties other than to note that the national erosion of tax revenues combined with balanced budget agreements make the situation almost impossible for many states, particularly the large ones, and because of the threat to any economic recovery that would result from massive reductions in state spending and services, the door may crack open for a second federal stimulus package that specifically targets state budgets. I don't think we're quite there yet, but the crisis reaches a whole new level starting today.

First of all, this is the first day that budget cuts from the previous agreement in February take effect for fiscal year 2009-2010. These include major reductions in health and human services:

SSI/SSP grants for low-income seniors and people with disabilities will drop by 2.3 percent, cutting the maximum grant for an individual from $870 to $850 per month. A previous SSI/SSP grant cut took effect in May, reducing maximum monthly grants for individuals from $907 to the current $870.

CalWORKs grants for low-income families with children will be cut by 4 percent, reducing the maximum grant from $723 to $694 per month (the same amount as in 1989) for a family of three in high-cost counties. CalWORKs grants have been frozen since 2004-05.

Dental services for most adults in the Medi-Cal Program will be eliminated along with seven other benefits, including eye exams and incontinence creams and washes. (Last week, a trial court judge in Sacramento County ruled against a group that sued to stop the cuts from taking effect.)

Grants on those who make the least are the most stimulative to an economy, because that money gets spent quickly. Now it's drying up.

Of course, there's also the matter of the still-yawning budget gap here in California, which just got $7 or $8 billion dollars larger, depending on your math. This means that even more damaging cuts, likely to the most vulnerable elements of society, will ensue, leading to another wave of job loss, foreclosures, and pain. The Governor and Senate Republicans are completely responsible for that addition to the deficit - consider that $7 billion is MORE than the money at stake to the near-term budget in the May 19 special election - and for the issuance of IOUs, which will add billions in unnecessary interest obligations.

In a nutshell, under the governor's IOU plan the state pays vendors and others it owes with the equivalent of a post-dated check that is good for the face value of the amount owed plus interest. IOU recipients, for the most part, "sell" their IOUs to a bank for the face value of the check for quick cash. The bank holds onto and then redeems the IOU at a later date, earning millions of dollars in interest.

This type of borrowing is nothing like pulling out the state's credit card to pay the bills. Rather, this is more like the state going down the street and getting an expensive payday loan.

The Governor's payday scheme not only makes California the laughingstock of the credit markets, but it unnecessarily puts a black eye on the state's long-term credit rating.

This means that, for years to come, millions of taxpayer dollars get shoved into the pockets of Wall Street bankers every time we issue long-term debt to build schools or roads, or other needed public projects.

Somewhere in the neighborhood of $6 billion dollars in additional interest alone will be added to the cost of selling bonds that voters have already approved.

Of course, by that time, Schwarzenegger will be out of office, so what does he care?

Harold Meyerson has the must-read of the day about this disaster, pinning the blame where it needs to go - on shock-doctrinaires like the Governor who demand to use this crisis to destroy the public sector. Read the entire thing, but here's an excerpt:

Right-wing ideologues see the crisis as an opportunity to shrink government regardless of the consequences. Schwarzenegger is proposing to end welfare, not just as we know it but altogether, and to throw 1 million children off the rolls of the state's healthy families program. But the consequences of closing the deficit simply through cutbacks will be felt by more than the poor. Already reeling from $15 billion in cutbacks that the state put through in February, many school districts, including that of Los Angeles, have canceled summer school this year. Scholarships that enable students of modest means to attend California's fabled university system have been slashed. Most of the state's parks may have to be closed as well.

The terrible irony in decimating the public sector to save the state is that the California that was the epicenter of the postwar American dream was fundamentally a creation of government. Fighting a Pacific war during World War II compelled the federal government to spend billions on California industry and infrastructure, and the state was the leading beneficiary of Pentagon dollars during the Cold War. As Kevin Starr, California's leading historian, points out in "Golden Dreams," his brilliant new history of the state in the 1950s and early '60s, fully 40 percent of all defense dollars for manufacturing and research in 1959 went to California, anchoring the state's booming economy in a well-paid workforce that was either unionized or professionalized, and seeding an electronics and high-tech sector that was to blossom in the following decades. Building on that prosperity to create more prosperity, Earl Warren, Goodwin Knight and Pat Brown -- two Republicans, one Democrat -- invested state dollars in schools, universities, freeways and aqueducts that were the best in the world. The Golden State was never more golden.

Today, its governor seems determined to turn that gold to dross. On Monday, the Democrats in the legislature passed a budget that included cuts of $11 billion, levied a tax on oil companies and tobacco, and raised auto registration fees by $15 per car to keep the state parks from closing. Schwarzenegger reiterated his refusal to raise any taxes or fees and said he would veto the budget.

There's still a chance to avoid IOUs, though I wouldn't call it likely. There is no chance to avoid the devastating impact of a broken political process and irresponsible legislating which at this point can only slide California into depression.

The Search For An Endgame

So the Senate Republicans voted en masse against $11 billion in cuts as part of the budget proposal put forward by the Democrats today. Lou Correa and Leland Yee voted no as well, and the final vote was 22-16. Technically, I believe the bill could go to the Assembly, and after passage to the Governor, but Arnold has vowed a veto, so that's probably out. Meanwhile, California will start to use the reserve fund to pay bills for the next week or so, and failing a solution after that, will resort to IOUs, which basically was the deal back in February as well. Yes, the Democratic proposal has its share of gimmickry, but no more than the Governor's own plan, and considering the Yacht Party refuses to write a plan, ALL OF THEIRS is gimmickry, as is their entire ideology. But the Yacht Party smells blood in the water, the Democrats have pulled their tax proposals off the table, and the future is incredibly uncertain.

I cannot disagree with Greg Lucas' analysis.

Examining the Senate’s budgetary actions of June 24 from a political rather than a policy perspective, the majority party Democrats may not have achieved their objectives [...]

Judging from the remarks of Senate President Pro Tempore Darrell Steinberg, a Sacramento Democrat, the intent of the exercise was to illustrate that Democrats are unwilling to cut as deeply into social programs as Gov. Arnold Schwarzenegger and to portray Republican lawmakers as obstructionist or hypocritical or both for not backing the cuts embraced by Democrats.

“Democrats are asking Republicans to vote for billions of dollars in cuts and apparently your answer today is ‘no,’ Steinberg said. “Why won’t you cut? Why won’t you cut?” [...]

In a purely political sense, the “bad” vote is the one cast by Democrats, ostensibly champions of public education, who – if the February budget they backed is included – have chosen to reduce state support of schools by more than $12 billion over a two-year period.

Republicans can portray their “no” vote as a refusal to cut nearly $5 billion more from public schools.

Perhaps a more effective illustration of support for what Democrats call the safety net would be to bring several of the GOP governor’s more draconian proposals to a vote.

It seems unlikely Schwarzenegger’s call to eliminate California’s welfare program would garner the votes necessary for passage. Nor would the governor’s proposal to end state grants to lower-income high school students to help them attend college.

After rejecting those and possibly other gubernatorial proposals then a vote on the more modest – more humane – measure with $11 billion in cuts might more satisfactorily frame the issue.

I would argue that making these "symbolic" votes doesn't do a ton of good unless you're willing to use them in the context of the 2010 campaign (and I don't remember votes coming into play in key districts in 2008) or in a coordinated and widespread media campaign immediately. To the latter point, we don't have any such media in California. It's a good argument in search of a broadcaster, and that goes for Lucas' alternative solution.

The real problem is that Democrats don't appear to have an endgame strategy, and haven't for years. The words "two-thirds majority" hasn't exited anyone's lips in quite a while. This is a process problem, and only a process solution will suffice, and teachable moments like these have been wasted for 30 years.

Republicans Refusing To... Cut?

In the upside-down world of the California budget mess, the Senate President Pro Tem is now criticizing Republicans for their refusal to vote for cuts.

Senate Leader Darrell Steinberg wants to put Republicans on record today on two political questions: whether they can accept $11.4 billion in cuts that Democrats are proposing, and whether they will vote on $2 billion in new taxes.

On taxes, Steinberg conceded he is unlikely to win a single Republican vote when the Senate takes up the Democrats' $23.3 billion deficit reduction plan. But that, he said, shouldn't stop them from supporting his package of cuts, which will be voted on separately.

"If they're going to stand on the argument that cuts are not deep enough and thereby not vote for $11 billion in cuts, then we have some issues," Steinberg said at a news briefing next to his Capitol office. "It's interesting. I'm getting a sense that Republicans are getting shy about voting for cuts. That would be an odd headline: Democrats urging Republicans to vote for cuts."

Actually, it's not an odd headline. It's the inevitable consequence of a broken political system where you need a simple majority to make cuts and a 2/3 majority to raise taxes. Period.

In this case, Steinberg can pass the whole budget, save $2 billion in oil and cigarette taxes, by majority vote, because this is not a budget enactment, but a revision. If he doesn't muster 2/3 for the cuts, however, the revision will be delayed 90 days, reducing the effectiveness of the cuts by roughly 1/4, and forcing additional solutions to fill the deficit later. Even when mostly cuts are on the table, Republicans are using the leverage of undemocratic supermajorities to force more cuts.

Here's Zed Hollingsworth playing dumb that all he wants is a comprehensive solution.

"We're willing to vote for the cuts that provide for a complete solution," said Republican leader Dennis Hollingsworth, R-Temecula. "We're not willing to vote for a partial solution that has us coming back in the spring having to find more revenues when another calamity hits. We're not interested in political gamesmanship."

No, the Yacht Party would NEVER be interested in political gamesmanship, perish the thought. They'd never want to try to send the state into bankruptcy to make a political point or anything. By the way, Zed, news flash: you'll be back in the spring. The projections from the Legislative Analyst have consistently fallen short of reality, and no matter how big a budget reserve gets baked into this new budget, you can bet dollars to donuts it won't be enough, especially considering the potentially accelerated Depression that additional cuts to the social services net will force. The Anderson Forecast estimates 64,000 government jobs lost from this round of budget cuts. Even in Dan Walters' world, that's a significant chunk.

My problem with the Democrats on this is mainly their insistence on working within a broken system. They miss every opportunity to put the failed governmental structure on trial. Something as absurd as Republicans voting against program cuts - to ensure MORE program cuts - defies belief without an explanation of how it's a symbol for a bad process that must be fixed. The goal of this budget, which was never going to be pretty regardless of the May 19 election, should have been to heighten that reality.

Mimi Walters Doesn't Understand State Education Funding Policy

Here's an article showing kind of a silly trumped-up sanctimony on behalf of the Yacht Party.

California voters said no, but Democratic lawmakers are pushing to do it anyhow.

The issue involves billions of dollars and a ballot measure so important to schools that the California Teachers Association spent more than $7 million in a failed attempt to pass Proposition 1B.

One month after the initiative died, Democrats are proposing to pay schools the same $7.9 billion that was the heart of the measure and to begin payments the same year, 2011-2012.

The funding commitment is part of a massive budget-balancing plan crafted by a joint legislative conference committee and scheduled to be voted upon this week by the Senate and Assembly.

Sen. Mimi Walters, R-Laguna Niguel, said the proposal to commit $7.9 billion to schools directly contradicts the people's will.

"The voters have spoken and we need to listen," Walters said. "Unfortunately, the majority party in Sacramento isn't listening."

Would that the Republicans always listen precisely to what the voters want - say, when they put 63% majorities into both houses of the Leigslature, for example. The Republican Governor has asked for a $4.5 billion reserve at a time of economic crisis, when voters "rejected" a rainy-day fund in Prop. 1A. You can argue the economics of a reserve fund that large on the basis that the economy still has some rough patches, but you can just as easily argue that the Governor is somehow upending the voter's will.

The SacBee does offer the contextual reality of the Democrats' effort here. Before the May 19 special election, the California Federation of Teachers and associated groups sued the state for that $7.9 billion, which they feel is owed to them. The dispute comes over how mandatory Prop. 98 funding gets calculated, and the CFT feels they have a solid argument that they actually deserved more money under the law than the state provided. You can say that you don't like mandates in funding generally, but the courts will eventually decide this dispute regardless of what the legislature does. And Democrats can see the possibility - some would say probability - of CFT being able to win that lawsuit and receive payment immediately, rather than two years out (although "immediately" would probably not happen for a year or so, until the case worked its way through the courts).

Prop. 1B was essentially an attempted out-of-court settlement. That having failed, the participants are going to court. Incidentally, every subsequent budget cut adds to the money owed to schools under Prop. 98, which has ballooned to around $11 billion. So the options are: either set up a future payment schedule, hope the courts rule in a way that would break with precedent, or dismantle Prop. 98 (which wouldn't get the state off the hook for funds owed). So when Mimi Walters argues that "the people have spoken," she's saying that they've spoken on cutting school funding to dead-last in the nation, all the while not answering the still-thorny problem of a current lawsuit.

Someone should tell her constituents that.

De-Mythologizing

Via OC Progressive, Assemblywoman Noreen Evans, Chair of the Budget Committee, spells out slowly for everyone the structural problems and false assertions about the California budget process. If you have non-political junkie friends who want to understand this in a quick and easy way, pass them this link.



This is a very good place to start. Evans puts the lie to three big myths about California:

1) The "runaway spending" assertion. Um, no. Population and inflation accounts for 68% of the increase. I LOVE how Evans cites the tough on crime sentencing laws as a key element of over-spending, in this case on prisons (20% of the inflation and population-adjusting spending increase). Ballot-box budgeting with no dedicated funding stream (separate from the initiatives voters stopped lawmakers from raiding yesterday, which have funding sources) also contributes to the problem. And there are the prior tax cuts like Prop. 13 and Arnold's VLF cut (which would have filled this ENTIRE current deficit). To cover for this we sell bonds and now have to pay out interest to service that debt. The problems beget more problems, and necessitate more cuts because the conservative veto resists taxes.

2) There's all these "waste" in the budget. Again, no. The Performance Review of 2004 found virtually nothing that would save the state any real money.

3) It's just all that messy partisanship from both sides. No. The Democrats have made $40 billion in cuts over the past several years. The Norquistian Yacht Party won't budget because they don't have to. Evans details the 2/3 requirement and the conservative veto, and cites Norquist himself!

Seriously, pass this to your friends. Facebook it and Twitter about it. If you internalize these concepts, the solutions are obvious - we need to restore democracy and give our elected officials a budget process and a Constitution they can actually navigate.

And while we're at it, let me debunk one other myth. The one that says all California has to do is sell San Quentin and all that surplus property and save the state. Well, the money raised from selling state property would not be able to be used to balance the budget.

Under the terms of Proposition 60A, approved by voters in November 2004, proceeds from the sale of any state surplus property can only be used to pay the interest on $15 billion in budget-balancing bonds sought by the GOP governor and approved by voters in March of the same year.

Once the bonds are paid off – the Legislative Analyst estimated at the time that cash from the sale of surplus property would speed retirement of the 30-year notes by a “few months” – sale proceeds would be deposited in the state’s reserve account for emergencies.

Oops.

You're Missing One

The Yacht Party's public relations staff scored a coup by getting one of their press releases into print about those mean, nasty legislators spending all our tax dollars. Now, it turns out that some of the cost-cutting measures put forward by these Republicans have a bit of merit. But it's all a matter of scale. These measures would produce savings in the millions of dollars, which is a lot to the individual blogger who really welcomes your donations (hint, hint), but not so much to a nation-state of 38 million. However, missing from the litany in this article is any measure that would actually put a dent in the budget crisis, like a broader-based sales tax that captures what people consume. AB178, which was also squashed this week, could have added anything from $2 billion-$5 billion to the General Fund. In other words, it would take more than 1,000 bills of the likes of Jeff Denham's AB44, to abolish the Integrated Waste Management Board, to have the impact of Nancy Skinner's AB178. But million and billion sound alike, so the Waste Management Board bill gets in the paper, while the squashing of the bill that would raise almost as much as Prop. 1C all by itself gets... nothing.

More of the essentially conservative slant of the media.

The Two Santa Claus Theory

Riffing off of Brian's post referencing the horror show of a Field Poll, where Californians polled apparently think we can balance the budget through spending cuts but don't want to cut anything (a sort-of companion PPIC poll basically shows the same thing, with respect to nobody wanting education cuts but nobody wanting to pay for increases), this should be a very familiar outlook to people. It's at the heart of the two Santa Claus theory, proposed by Jude Wanniski, a Republican economist, during the time of Ronald Reagan.

By 1974, Jude Wanniski had had enough. The Democrats got to play Santa Claus when they passed out Social Security and Unemployment checks – both programs of the New Deal – as well as when their "big government" projects like roads, bridges, and highways were built giving a healthy union paycheck to construction workers. They kept raising taxes on businesses and rich people to pay for things, which didn't seem to have much effect at all on working people (wages were steadily going up, in fact), and that made them seem like a party of Robin Hoods, taking from the rich to fund programs for the poor and the working class. Americans loved it. And every time Republicans railed against these programs, they lost elections [...]

Wanniski decided to turn the classical world of economics – which had operated on this simple demand-driven equation for seven thousand years – on its head. In 1974 he invented a new phrase – "supply side economics" – and suggested that the reason economies grew wasn't because people had money and wanted to buy things with it but, instead, because things were available for sale, thus tantalizing people to part with their money. The more things there were, the faster the economy would grow.

At the same time, Arthur Laffer was taking that equation a step further. Not only was supply-side a rational concept, Laffer suggested, but as taxes went down, revenue to the government would go up!

Neither concept made any sense – and time has proven both to be colossal idiocies – but together they offered the Republican Party a way out of the wilderness [...]

Democrats, (Wanniski) said, had been able to be "Santa Clauses" by giving people things from the largesse of the federal government. Republicans could do that, too – spending could actually increase. Plus, Republicans could be double Santa Clauses by cutting people's taxes! For working people it would only be a small token – a few hundred dollars a year on average – but would be heavily marketed. And for the rich it would amount to hundreds of billions of dollars in tax cuts. The rich, in turn, would use that money to import or build more stuff to market, thus increasing supply and stimulating the economy. And that growth in the economy would mean that the people still paying taxes would pay more because they were earning more.

There was no way, Wanniski said, that the Democrats could ever win again. They'd have to be anti-Santas by raising taxes, or anti-Santas by cutting spending. Either one would lose them elections.

In the intervening 35 years, we have had no progressive leader in California, no Democratic leader, challenge that ridiculous theory in any meaningful way. Instead, over and over again, Democrats must lead the charge killing off the two Santa Clauses, filling budget deficits by raising taxes or cutting spending, frequently the latter. And while other factors have contributed to Democratic dominance in recent years, the ideological theories of Santa Claus conservatism remain. And Democrats and Republicans alike have ingrained them into their lizard brains, either by believing in them, or believing that everyone else believes in them and there's no way to change that.

In truth, public opinion, particularly in such a low-information state like California, is quite malleable. But nobody has bothered to discredit the Two Santa Claus theory, the idea that we can have all the services we need and the lowest taxes possible. Of course, the insidious dynamic of the two-thirds rule, putting Democrats both nominally in power but subject to a conservative veto, has made a Democratic message impossible, so constrained it is by the straitjacket of an ungovernable system.

Now, the out for the believers in two Santa Clauses is that government can just do more with the money they have, through better efficiency. Nobody would argue that government is perfectly efficient - I don't see anyone leaping to defend spending $580,000 on unused office space - but the savings from that efficiency exist on the margins, and would do little to really impact our woefully low per capita state spending on areas like K-12 education. So we get bullshitty ideas like cutting lawmaker pay (the Governor jumped all over that one), or trashing the state's Waste Management Board, which has become a waystation for termed-out legislators to pull in a nice salary. These "efficiency" maneuvers would do absolutely nothing relative to the budget deficit. And the areas that would make a dent, like a broader-based sales tax that catches everything we consume, if off-limits because of special interest lobbying:

The declining “yield” of the state’s sales tax is one cause of California’s ongoing budget deficits. Since 1960, the revenue raised by each one percent state sales tax rate has fallen by about one-third. The reasons for the decline are two-fold. First, consumers now spend a larger share of their incomes on services, which are largely untaxed, rather than goods, which are subject to the state’s sales tax. The second reason is the rise of internet sales, including purchases from out-of-state retailers, that don’t collect the tax on sales made to California consumers. Estimates suggest that California loses $2 billion to $5 billion per year from untaxed internet sales - enough to make a significant and lasting dent in the state’s chronic budget woes.

In light of this fact, one might think that a bill that attempts to narrow a loophole that provides preferential treatment for businesses located entirely outside of California would be a “no brainer.” Unfortunately, this appears not to be the case. Assemblymember Nancy Skinner’s AB 178 is similar to a recently enacted New York law, would require businesses such as Amazon.com that enter into “affiliate” relationships with California-based entities to collect California sales tax.

At a time when California faces significant budget shortfalls and California retailers face declining sales, you’d think a bill that makes it possible for the state to actually collect taxes that are legally owed and that limits an incentive for Californians to buy from businesses that don’t employ a single Californian would be greeted with open arms. Unfortunately, opposition from tech industry lobbyists has left the measure’s future in question.

Ultimately, we have a serious problem. Our citizens get almost no public policy information from media, our state capitol is too often run by corporate interests, our Democratic leadership cowers from advocacy to disabuse citizens of false notions, and our Yacht Party is completely crazy. This is not insurmountable but requires leadership. We elected a President by 61% of the vote in California who was derided as a socialist. Attitudes can be changed. But someone has to stand up and speak.

Be Afraid, Yacht Party, Be Very Afraid

In a last-ditch and ultimately futile attempt to get the Republicans to support the May 19 ballot measures, Yacht Party leader in the Assembly Mike Villines played the majority vote card.

One fear of GOP lawmakers surrounding the May 19 special election is that should the ballot measures fail, Democrats and Gov. Arnold Schwarzenegger could go around them and simply swap certain taxes for fees and raise revenues without their votes [...]

"I know it's counterintuitive, but by coming to the table and negotiating, we saved the two-thirds protection," Villines said as the California Republican Party opposed the measures. "Mark my word, I believe that if these initiatives don't go through, you will see a majority-vote budget, you will see it signed and you will see the defense of taxpayers in this state disappear."

Mike, you say that like majority rule is a bad thing.

Unfortunately I don't share the optimism of Asm. Villines about the backbone of the Democratic Party to go ahead and fill the budget gap with a work-around fee increase. I had the opportunity to share the stage with a couple members of the legislature this weekend to debate the special election, and in particular, Senate Majority Leader Dean Florez seemed especially pessimistic on the majority vote option. He basically said that the lawyers advising the legislature questions the legality of the effort and that if the ballot measures fail, "we will have a cuts-only budget." He even went so far as to identify particular cuts that have already been discussed, all affecting the usual suspects - the elderly, the blind, the IHSS patients, kids without health care, CalWorks members, etc. So that's the May 20th strategy that the legislature is teeing up.

Now, maybe it's easier to ramp up the fear by playing up this disaster scenario in the event of the failure of the ballot measures. But I definitely expressed disappointment that the Majority Leader was foreclosing on an option which the nonpartisan Legislative Counsel found perfectly legal. I see no need to shut down creative solutions to the budget problem, especially when they can offer a glimpse into how a working government can function in a post-two-thirds environment. Even moderates and conservatives understand that the Yacht Party has hijacked the state and irresponsibly used their chokehold on legislative rules to force failed solutions and drive California into a fiscal ditch. The point is that this is coming, or at least it ought to be, whether by a work-around or ballot initiative, and we can end this hostage situation that Republicans have forced upon us for the last thirty years. To their credit, everyone in the legislature that I've talked to wants to move forward on repealing two-thirds.

Sen. Florez and I had a lot else to discuss in our debate (including his admission that "if you want to vote No on 1F, go ahead," which was a bit off the reservation), including the continued debate over the state spending cap, Prop. 1A (or a spending constraint, if you prefer, but certainly not anything like the inoffensive tweak that supporters make it out to be). In the end, the West Los Angeles Democratic Club took no position on anything but No on 1E, and PDA, where I also spoke this weekend, voted NO on all the ballot measures.

Don't Fall For The Assumed Ubiquity Of The Yacht Party Mentality

That wise Mr. Skelton intones that Prop. 1A is not "a sneaky trick to raise taxes." I agree. It's a sneaky trick to drown government in a bathtub.

We touched yesterday on this bigger concern about the lessons that may be learned from the special election battle. It is clear that those anti-tax forces on the right will take credit if the ballot measures, particularly 1A, are defeated, saying that this is proof that California has had enough and the vote signals the rise of the teabaggers. That actually would be a dangerous lesson, mainly because it's not true, and it's part and parcel of the vast disinformation around taxes that the cynical forces on the right spare no expense in delivering to the public.

Low-, not high-, income Californians pay the largest share of their income in state and local taxes. Here’s an updated analysis of data we’ve blogged about before that takes into account the temporary tax increase included as part of the February budget agreement.

California is a moderate, not high, tax state when all state and local taxes and fees are taken into account. This results from the fact that California has moderately high state taxes, but low local property taxes due to the impact of Proposition 13 on local property tax collections.

High-income Californians aren’t leaving the state due to higher taxes. In fact, the number of millionaire taxpayers is growing at a rate that far exceeds the increase in the number of personal income taxpayers as a whole.

Over the past 15 years, lawmakers have enacted tax cuts that will cost the state nearly $12 billion in 2008-09. That’s a larger loss than the $11.0 billion 2009-10 temporary increase in state tax revenues included in the February budget agreement.

Moreover, while the tax increases included in the budget are all temporary, regardless of the outcome of the May election, the September 2008 and February 2009 budget agreements included massive corporate tax cuts that are permanent and that will reduce state revenues by approximately $2.5 billion per year when fully implemented.

Saying that tax policy is just plain wacky and inconsistent neglects these plain facts - that the past thirty years of the conservative veto have tilted tax policy, and most everything else, in a very rightward direction.

In actuality, we are seeing a grassroots/establishment divide, where the grassroots in the Democratic Party would like to see some leadership instead of another layer of failed solutions. Unfortunately, because the voices on the right are so loud in their opposition, and because advocates of the special elections would rather frame themselves in opposition to the right, the right is well-positioned to take credit for the defeat of these measures, should that happen. When that's simply not the lesson that ought to be learned.

The resultant fear is that the feckless Democratic leadership takes that lesson, and then cowers from going down the road of enacting the real structural reforms that represent the only solution possible to lift us from this perpetual disaster. That would be catastrophically wrong. Don't assume from a short-term setback that the Yacht Party mentality runs the state. People will pay for taxes in exchange for services; that was proven in 2005 and it's just as true today. Californians elect their leaders to function and yet the structure of government denies them. Dismantle that barrier, and restore democracy to the state.

Special Election Delays Make Yacht Party Happy Campers

CapAlert gets around to covering the issue we covered on Wednesday - how legislative vacancies on the Democratic side embolden the Yacht Party and make it more impossible to pass a decent budget. What amazes me is that they get a Yacht Party leader to go on the record about it:

To this day, Ridley-Thomas' seat remains unfilled. Democratic Assemblyman Curren Price of Inglewood finished first in the primary last week and is expected to take his place in the upper house after a May 19 runoff.

Of course, that will create a vacancy in the Assembly, which will likely last until early October by virtue of the state's election-scheduling laws.

"Every vote we pick up, it is exponential for the Republicans," said Assembly GOP leader Mike Villines. "It gives us a lot of ability to move the debate and navigate to issues that we care about."

This is Yacht Party logic - they actually think a vacancy is a PICK-UP for them. It's the logic of an extortionist. No sane person other than someone trying to exploit would agree that a less-than-full legislature for years on end makes sense from a public policy standpoint. That's why we could significantly reduce the time of the merry go-round AND save millions of dollars in special election costs by instituting Instant Runoff Voting for special election seats.

But the Yacht Party has no intention of fixing the policy. They want to laugh as they see legislators walk out the door.

In Northern California, Rep. Ellen Tauscher has accepted an Obama post in the state department, though still faces the confirmation process.

Sen. Mark DeSaulnier, D-Concord, has already declared for the seat, and Assemblywoman Joan Buchanan, D-Alamo, is said to be considering a run.

"Joan Buchanan should run for Congress," said a laughing Villines, hoping for yet another vacancy in his house. "She'd be an excellent congresswoman."

"It creates a better dynamic than having the ability of the liberal-controlled Legislature to just steamroll its own desires," Villines said.

A better dynamic in the sense of being a fake dynamic, where the elected will of the voters is not reflected in the ability of the legislature. I can't think of a better argument to repeal two-thirds than these two quotes.

Stimulus Funds Held Back By The Yacht Party Dam

There are two bills likely to come up for vote this week that would allow California to receive billions in stimulus funding, both of which have been subject to Yacht Party obstruction thus far of the Mark Sanford, Sarah Palin variety.

First up is the unemployment benefits extension bill which Republicans rejected last week. There are actually two separate measures, one which would extend benefits and one which would increase the pool of people eligible for those benefits, but the extension is the one that will be voted on as soon as today. Kudos to the SacBee for noting that the Governor has taken no position on these bills, despite the bromance rhetoric about the President and the stimulus.

The Assembly is expected to vote this week, probably today, on a bill that would pave the way for California to extend its lifeline for out-of-work residents by five months at federal expense.

The measure would ensure an extra $2.5 billion to $3 billion in federal funds for emergency benefits at a time when California is mired in recession, with an unemployment rate above 10 percent.

Passage would mean $6,140 in additional benefits for an out-of-work person receiving the state's average benefit of $307 per week. Benefits range from $65 to $475, based on previous income earned [...]

Gov. Arnold Schwarzenegger supports both concepts but has not taken a position on specific legislation, aides said.

Schwarzenegger has "no position" because the Chamber of Commerce doesn't like anything that could lead to higher corporate taxes, and they hold the puppet strings on our last action hero. The vote on this has yet to be recorded in the Assembly, so we shall see what the Yacht Party decides.

The second bill, currently in the State Senate, concerns Medi-Cal eligibility requirements that would open up even more federal funding.

Although California is slated to receive more than $31 billion in federal money, a change in eligibility rules for Medi-Cal made as part of this year’s budget prevents California from qualifying for more than 25 percent of those federal funds.

In order to do so, the state must have the same Medi-Cal eligibility rules today as those in place July 1, 2008.

The problem was caused by an attempt to save $70 million by changing eligibility rules for children receiving care from Medi-Cal was contained in the 85-day record late budget signed by Gov. Arnold Schwarzenegger last September.

Under the change, children must fill out a report every six months confirming their continuing eligibility along with their parents who were already required to fill out such a report prior to the change in law.

Critics of the requirement say that most of the children who lose eligibility do so because they forget to turn in the paperwork, not because they actually lose eligibility. Sorting out such issues increases Medi-Cal costs to counties, who administer the program locally.

To get the federal money, the state must change the law before July 1, 2009 so that kids don’t need to fill out the report. The bill would do that.

Let's be entirely clear - the Administration was banking on oversights from poor families who qualify for Medi-Cal to save the state money. That's borderline immoral and it ought to be addressed. Elaine Alquist is carrying the bill in the Senate, and on this one, Schwarzenegger has seen the error of his ways and promises to sign it. Will the Yacht Party follow suit, or prefer budgeting by forcing bureaucratic red tape on the poor?

Ashburn Tells The Truth About His Fellow Cowards

Voting for the budget and facing retirement has seemed to liberate Bakersfield-area Senator Roy Ashburn. He shared coffee with a couple local reporters and dished about the behind-the-scenes budget process, confirming a lot of expectations:

In the wee hours of the Thursday before the budget vote — which had to have been Thursday, the 12th — the Senate Republican caucus met.

One of the senators pointed to four others and basically outed them for coming to his office and asking him to vote for the budget— when they didn't have the guts to do it themselves.

Ashburn wouldn't name names.

Ashburn also said senators went to state Sen. Abel Maldonado, R-Santa Maria, and asked him to put pet projects into the budget. That as Republican senators railed against overspending. Maldonado wouldn't do it, Ashburn said.

What you have with the Yacht Party is a group of lawmakers afraid of their own base. They glorify the importance of simpletons like John & Ken* to almost mythic levels, so that if they dare to step out of their comfortable ideological shells and help move the state from the brink of financial collapse, they believe it would be the end of their careers. So like all sniveling creatures, they would rather have somebody else do the heavy lifting so they could maintain their pose of anti-tax purity. And at the same time, they have the gall to ask the same people to slip in tasty goodies for themselves and their districts, so they can have all the benefits of compromise with none of the costs.

I'm going to sound like a broken record, but this is again the fruit of a dysfunctional process that enables Yacht Party cowards to extract as much as possible and maintain maximum leverage over negotiations despite their small minority. The conservative veto must end, and democracy must be restored to California.

* - Just to add to the John & Ken stuff: James Rainey, the LA Times' media critic, slaps them around a bit:

It's all the fault of those no-good illegal immigrants. Yes, the price tag that comes with a huge influx of noncitizens is rightly part of the public discourse. So why muddy the waters with some confounding information?

John and Ken wouldn't make that mistake. They make sure to mention the taxes the newcomers don't pay and the bills they run up in public hospitals. Who needs to mention the taxes they do pay, or to waste time worrying about the lower prices and convenience we all derive from their low-wage labor?

Then, please, protest the cost of state workers. It's beyond righteous to worry about the payroll growing, when everyone else is cutting back. But certainly don't remind your listeners (at least that I've heard) that the fastest-growing state job category is prison guard and that their support of tough sentencing helps explain why that part of the state budget keeps growing by leaps.

And certainly don't suggest that an economic downturn -- affecting virtually every government and business in the world -- played any role in ruining the state's finances. It's much more fun to pin it on that special someone. Gov. Arnold Schwarzenegger "had five years to fix the problem and it got to $42 billion," KenJohn said the other day. (Sorry, I'm name-lumping. But when the two get all worked up, I can't tell their voices apart.) [...]

It should be no surprise that "California Psychics" is a frequent advertiser on the program of late.

The business offers the services of tarot card readers, clairvoyants, astrologers and the like. "I think, most of all," one satisfied customer says in the ad, "I felt validated."

It seems to me that's what John & Ken are selling too. A bit of hocus-pocus and validation of their listeners' anger with a story that doesn't bother with all the messy details.