Legislature Passes Groundbreaking Renewable Energy Legislation; "Green" Governor Will Veto

SB14, which would set a first-in-the-nation standard that utilities must receive 33% of their energy from renewable sources by 2020, passed the Legislature late last night.

“Increased development of renewable energy in California has tremendous potential as an economic development tool. These are clean, green jobs that belong in California. SB 14 sets a clear target with a real deadline, and then makes it as easy as possible to bring renewable energy on line.

In light of the state’s ambitious new carbon emission targets, SB 14 will give energy agencies the flexibility they need in order to meet those goals. Current law “caps” the amount of renewable energy that the Public Utilities Commission may order utilities to buy or build at 20 percent. This bill would remove this cap and require utilities to acquire 33 percent of their electricity from renewable resources by 2020.”

This would make California's renewable energy standard one of the most aggressive in the world. The Governor, feted in magazines and national media as an environmental leader, has vocally backed the 33% standard in the past. But power plant generators have pressured Schwarzenegger to veto the bill. And according to the LA Times, he will.

The Senate did manage to pass the energy bill, which would raise to 33% the amount of energy the utilities must get from renewable sources. Final approval by the Assembly of some minor amendments was expected.

However, a high-ranking administration official said late Friday that the governor may not sign the bill, SB 14 by Sen. Joe Simitian (D-Palo Alto), because of provisions limiting the amount of energy that could come from outside California. The official spoke on condition of anonymity because the bills were not yet on the governor's desk.

That would really be the icing on the cake to the worst Governorship in California history. The one issue on which he staked his legacy, and he is likely to veto the bill most likely to drive the lowering of greenhouse gas emissions, mainly because it would keep too many jobs in the state. Adding a renewable energy standard and mandating a majority of that energy be generated in state, is probably the only bill passed this year that looks to expand the local economy. And because of that, Schwarzenegger will veto it.

And the same magazines will put him on the cover with the slogan "The Greenenator" and talk up his environmental credentials.

Breaking The Law To Balance The Budget - Again?

There's been quite a bit of confusion about whether or not the Governor was able to make line-item cuts in this budget. After all, it was a revision, not a budget agreement where spending appropriations are made. In those cases the Governor can make cuts, but this was a revision consisting of a series of cuts and fund shifts, and it's unclear whether the Governor can make additional cuts on top of cuts in a budget revision.

Craig Cornett, the Budget Director in the office of Darrell Steinberg, has sent out a letter to interested parties, which I've reproduced below. Cornett reiterates the argument that the revision do not constitute appropriations, and should not be subject to the line-item veto. This is particularly true with any appropriation reductions that passed with a simply majority vote, since a budget vote must have a 2/3 majority. Cornett offers the remedy here, but he confines it to the courts.

Should the Controller implement these vetoes, we suspect that some party that will be injured by the vetoes will file a lawsuit. Given the sweep of the reductions, this could come from any of a number of potential plaintiffs, such as children who will no longer have health insurance because of the reductions to Healthy Families Programs, battered women’s shelters that will be threatened with closure because of elimination of funding for the Domestic Violence Program, AIDS prevention and treatment programs that will no longer receive state support because of the elimination of Office of AIDS funding, or counties that will see cuts to their Child Welfare Services or Medi-Cal administration funding.

What Cornett leaves out of this analysis is the ability for the Legislature to override the Governor's blue pencil edits. Obviously that is off the menu, as far as we know.

I don't think it would surprise anyone to see Schwarzenegger break the law to balance the budget - so many provisions in this budget violate the law that it can be seen as a stimulus package for the legal system.

When the Governor signed ABx4 1—the bill that revised the 2009-10 Budget Act—and accompanying trailer bills this morning, he line-item vetoed about $500 million in General Fund expenditures in order to ensure that the state has a reserve for 2009-10.

Budget staff from both the Senate and Assembly worked closely with Legislative Counsel in construction of ABx4 1 and, based on that work, and follow-up conversations, we think that these vetoes—especially those of health and human services programs—are outside the Governor's Constitutional authority, for a couple of reasons.

First, reductions to amounts in the various budget schedules do not actually constitute appropriations and, thus, are not subject to line item veto. This argument is bolstered by Counsel’s long-held view that, unlike new or increased items of appropriation, the Legislature may reduce General Fund items of appropriation with a simple majority vote, and any General Fund action that takes place with a simple majority vote is not, by definition, an appropriation, and therefore not subject to line-item veto.

Second, most of the budget revisions for the health and human services departments were not even included in the scheduled items, but instead were placed in Sections of 568 to 575 of ABx4 1. These sections of the bill added new Control Sections 17.50 to 18.50 to the 2009-10 Budget Act that reduced the various appropriations for HHS departments in a descriptive manner, thus making it even clearer that they do not constitute appropriations. These control sections include departments that were specifically included in the Governor’s line-item vetoes—Aging, Health Care Services, Public Health, MRMIB, Mental Health, Developmental Services, and Social Services.

Should the Controller implement these vetoes, we suspect that some party that will be injured by the vetoes will file a lawsuit. Given the sweep of the reductions, this could come from any of a number of potential plaintiffs, such as children who will no longer have health insurance because of the reductions to Healthy Families Programs, battered women’s shelters that will be threatened with closure because of elimination of funding for the Domestic Violence Program, AIDS prevention and treatment programs that will no longer receive state support because of the elimination of Office of AIDS funding, or counties that will see cuts to their Child Welfare Services or Medi-Cal administration funding.

...Dan Aiello has a bit more about this.

Governor Veto Pen

Brian and Robert have the rundown of what line-item veto cuts the Governor made today when signing the budget. The budget solution presented to him was about $1 billion short of the goal, so the Governor used his blue pencil to make unilateral cuts. I think I've said before that the good rule of thumb for these cuts, from the Governor's perspective, is to ask "Who doesn't vote?" and cut there. And for the most part, he did that. I guess he hopes that the AIDS patients who will no longer receive treatment due to cuts in the Office of AIDS Prevention and Treatment will succumb to the disease and therefore not vote. Cuts to child welfare and health care services fall on children who cannot vote. But since Schwarzenegger will never face voters again, he decided to even wield the blue pencil on actual voters. $6 million more got slashed from state parks, used by virtually everyone, and this could see as many as 100 state parks forced to close. All community health clinics get cut of their state funding, which may disproportionately affect rural areas, as will the elimination of funding for the Williamson Act, which gives farmers a subsidy to keep their parcels from falling into the hands of developers. In this budget, Schwarzenegger has assembled something for everyone to hate.

As Robert says, there's a way around this that the legislature probably won't take:

The state legislature could try and override these vetoes. But as we've seen time and again, this legislature appears to have forgotten that the override power actually exists. It would be a very good chance for Democrats to force Republicans to take a stand on these programs. Either they vote to restore the funding, or they vote to kick kids off of health care and close beaches and parks, giving Dems a set of issues to run on in 2010.

It seems doubtful that such an override will even be attempted. And so California slides deeper into ruin.

I'd have to look at the rules, and see if they've closed the extraordinary session and thus cannot override the blue-pencil vetoes. But basically this is correct. And some of those line-items, like the Williamson Act funding, would get a good deal of Republican support.

Needless to say, I agree that the line item veto, and the aggrandizement of executive power generally, should get ditched in a Constitutional convention. At the least, we could set up a mechanism where line items must be upheld by the Legislature.

...AP has a story up. Darrell Steinberg comes out with fighting words:

Senate President Pro Tem Darrell Steinberg, a Democrat who negotiated the original budget compromise with Schwarzenegger, immediately questioned the legality of many of the governor's line-item vetoes.

"We will fight to restore every dollar of additional cuts to health and human services," Steinberg said in a statement. "This is not the last word."

The last word, Senator, is override.

...also, fun fact: the budget is already around $8 billion short for 2010-2011. Surprise!

More Signing Statements

This was a bill, the war supplemental, which the President orchestrated, amended and whipped heavily. One provision, to provide some accountability on the funds delivered to the IMF, didn't meet to his liking. So he essentially nullified it.

The Obama administration announced in the statement it would disregard provisions of the legislation that, among other things, would compel the Obama administration to pressure the World Bank to strengthen labor and environmental standards and require the Treasury department to report to Congress on the activities of the World Bank and International Monetary Fund (IMF).

"Provisions of this bill...would interfere with my constitutional authority to conduct foreign relations by directing the Executive to take certain positions in negotiations or discussions with international organizations and foreign governments, or by requiring consultation with the Congress prior to such negotiations or discussions," Obama said in a statement.

"I will not treat these provisions as limiting my ability to engage in foreign diplomacy or negotiations," he added.

If this President or future Presidents want a line-item veto, they could ask for one. However, they wouldn't get far since such a law was declared unconstitutional back in 1996. So instead, this signing statement process gets used to nullify certain elements of a statute. Obama has used 5 in his first 5 months or so, and about the only difference from Bush is that he makes the statements public immediately instead of having them discovered later. That's transparency, but not quite the kind I can believe in.

In this case, Congress could probably fashion their desired result better in the legislation than telling the executive what to say to the World Bank. As holders of the purse strings, they could simply set limits if certain labor or environmental targets are not met. Actually, both sides are overstepping their boundaries a bit here. At some point, we need a clearer definition of the roles of the branches of government when it comes to legislation, and so hopefully the courts can provide such a remedy.

McCain: Veto The Bill I Voted For, Mr. President

This is some kind of flip-flop record:

SCARBOROUGH: Why did these (pork-barrel) items have to be in this critical bill?

MCCAIN: Well that’s just the way the system is working in Washington and the reason why it’s got to be fixed, and it’s got to be changed. And no matter what the stakes are, you’ve got to stop this by starting to veto bills that come across the president’s desk. … It’s insanity and it’s obscenity, because it’s a waste of taxpayers’ dollars and it goes on, and until we stop it, until we get frankly a president who will say, I’m gonna veto these bills, I’m gonna make the people famous that put them on there, uh, famous.

I want to clear up a misconception that these "sweeteners" were somehow picked specifically to appeal to individual legislators in the House. That's not true. This was a tax package that the Senate passed weeks ago. They picked it up and added it, maybe to appeal to a couple tax-cutting Republicans, but really to jam the House and force them to vote for it, after they demurred earlier. For crying out loud, the bill increases taxes on Big Oil. Do you really think they would have constructed it that way to appeal to Republicans? It's the only part of this or ANY bill passed this year, really, that would help reindustrialize America (due to the renewable energy production tax credits), and as a standalone I would have voted for it happily.

But let's get back to the main point. McCain flew to Washington yesterday and voted for the bailout bill. He hasn't been on the Senate floor to vote in six months. So this was obviously very important. And now, he turns right around and says that the President has to show some courage and veto the bill which he just voted to pass.

The disconnect is staggering. It's the same feeling you get when you see McCain's reinvention as a master regulator despite his consistent opposition for 26 years. More than anything, this is why he's losing. People don't trust him.

Our Compassionate Conservative California Governor

There were news reports galore about Arnold Schwarzenegger signing the $143 billion dollar state budget (hey, four more of those and they can bail out Wall Street!), but not so many reports about the $515 million he cut out. Marty Omoto enlightens us.

A wide range of senior programs - including the Multipurpose Senior Services Program (MSSP), Alzhiemers Resource Centers, were especially hard hit with additional cuts by the Governor.

Also hit hard was the CalWORKS program - California's "welfare to work" program that serves thousands of low income children and families - many of them with special needs and disabilities, was hardest hit by the line item veto, with an additional $70 million reduction on top of what the Legislature approved in the budget bill passed last week.

Two programs overseen by the Department of Social Services, Adult Protective Services and Deaf Access Program were also hit with additional reductions. The reduction to Adult Protective Services was especially significant - and a reduction that was fought earlier this year by advocates.

Alzheimer resource centers, nutrition programs for seniors, the Home Delivered Meals program, the Deaf Access Program, Medi-Cal, Healthy Families, the Alcohol and Drug Program, and the Department of Mental Health - these are just a few programs and departments that got their funding cut. The common thread is that they all involve struggling communities of need. Nice guy, that Arnold. He even cut the California Discount Prescription Drug Fund by $2 million - this was part of one of Schwarzenegger's main accomplishments in 2006. Read Omoto's post for the details. Oh, and those 10,000 state employees who were fired as a result of insufficient funds? Don't bother coming back to work.

State Finance Director Micheal Genest this afternoon said that the state employees whose jobs were a casualty of California's budget impasse won't be rehired this budget year.

Gov. Arnold Schwarzenegger's executive order on July 31 terminated about 10,000 part-time and retired annuitant positions, curbed overtime and suspended some contracts.

"We expect the order to remain in effect the rest of the (fiscal) year," Genest said to reporters shortly after Schwarzenegger signed the budget.

We talk about removing the 2/3 requirement and bringing some sanity to the budget process. And the people will have a chance to weigh in on parts of this budget in 2009. But these heartless cuts are never put up for vote, and it's important to remember that it matters who's sitting at the Governor's desk in 2010.