Don’t Hold Your Breath on Obama Saving Us

Despite the fact that California is essentially the engine of economic growth for the nation, the CA budget situation has gotten relatively little coverage at the national level. Nonetheless, some of California’s state and federal leaders have been quietly cajoling the Obama administration to help us out.  The Washington Post thinks it won’t come soon, if at all:

The Obama administration has turned back pleas for emergency aid from one of the biggest remaining threats to the economy — the state of California.

Top state officials have gone hat in hand to the administration, armed with dire warnings of a fast-approaching “fiscal meltdown” caused by a budget shortfall. Concern has grown inside the White House in recent weeks as California’s fiscal condition has worsened, leading to high-level administration meetings. But federal officials are worried that a bailout of California would set off a cascade of demands from other states.

* * *

After a series of meetings, Treasury Secretary Timothy F. Geithner, top White House economists Lawrence Summers and Christina Romer, and other senior officials have decided that California could hold on a little longer and should get its budget in order rather than rely on a federal bailout. These policymakers continue to watch the situation closely and do not rule out helping the state if its condition significantly deteriorates, a senior administration official said. But in that case, federal help would carry conditions to protect taxpayers and make similar requests for aid unattractive to other states, the official said. The official did not detail those conditions.

(Washington Post 6/16/09)

After a whole schpiel about how Prop 13 and ballot box budgeting has created an inflexible budget too reliant on bubbles (can’t argue with that),  the Post then hints that the Geithner and the gang at Treasury might someday support a plan for California.  However, it appears likely that there will be strings connected to any money.  It’s not clear how the strings would operate, as the voters would still need to approve constitutional reforms to actually implement any of said strings. And you know, our voters can be a bit finicky.

The argument that we are offsetting about 5% of the federal stimulus doesn’t seem to be determinative, yet. For the time being, it appears that the Obama administration is content to let California cut its way out of this.  

8 thoughts on “Don’t Hold Your Breath on Obama Saving Us”

  1. The Governor and the Legislature both know the state can’t get out of the crisis without Federal help. The Governor’s apocalyptic budget proposals have been about raising the stakes and increasing pressure on Washington, and I think yesterday’s reversal on selling state assets confirms it.

    If the strings attached to Federal assistance include some mechanism for getting the state into a constitutional convention (during which Prop.13 can be undone, the initiative process overhauled, and term limits rescinded), all will be well. Pols will be able to blame Washington when some constituency’s ox gets gored and the rest of us have a shot at a functioning state government.  

  2. All federal support to the California budget will go into maintaining tax giveaways to the chamber of commerce and the wealthy.

    The governor has proven that he will not spend federal relief money wisely. He’ll just take the money and insist on layoffs and service cutbacks anyway.

  3. should shock the conscience of all Californians, particularly progressives.

    It is unconscionable that the federal government would stand aside while the legislature and the governor eliminate the social safety net and permanently cripple public education, among other things. But that’s what they are doing.

    I’d sure like to see somebody in a position of power get up on their hind legs and challenge the do-nothing Washington establishment over their lack of interest and lack of urgency.

    Our congressional delegation should be banging the drum and challenging the White House to quit standing around doing nothing every single day.

    If there is a solution, apart from shutting down large portions of the state government, it’s going to require far more federal participation than we have seen to date, strings or no strings.

    But so far, all we’ve seen is the dithering of the legislative Democrats, the rigidity of the legislative Rs and Schwarzenegger, and the utter indifference of Washington.

    This cannot be allowed to stand.

  4. Given the Obama Administration’s priorities, good (health care), bad (such as the current Supplemental business) and ugly (DADT and DOMA), it’s clear that they want to take their political risks in as limited an area as they can get away with.  And tailoring a bill to help out our situation here in Gullyfornya entails a lot of political risk.

    If the Obama people are going to take that kind of risk, they have to ask what the California Democratic Party is willing to do to resolve this.  Taking up the need for revenue has to be at the top of that list.  While we’re beginning to see grassroots organization on this that may help us, we still are not seeing signs that the leadership in the Assembly and Senate are willing to raise the stakes and start going to the larger public.  And if they do not this, and will not do this, agreeing to the cuts that Arnold and Scholock Docs are asking for is the only path open to them.

    If the institutional Democratic Party in California won’t take on the GOP here, why the hell do we expect that Obama will do it for us?  I don’t see this.

  5. Ah, but if Arnie will only hand the money off to the corporations and make cuts anyway, the Feds shouldn’t give us the money.  We need to toss him out, reverse the corporation tax, and get the 2/3s out, in whatever order it takes.

    Hold on here.

    If that were the case, you’d have a point. But right now, there is no money from Washington, not even any interest in California’s plight. So it’s kind of a stretch to speculate on what Ahnuld would do with the money if he had it.

    As for tossing him out, he should never have been elected in the first place, what a fucking joke, but as we know, in California, fucking jokes tend to occupy the Corner Office more often than not (at least in my lifetime…). The opportunity to toss him out always seems to pass by unused. Once he was installed, the whole establishment gathered around to sing his praises. No matter how much he screws the rest of us, he’s keeping that establishment happy. They aren’t gonna change their tune.

    There is no constitutional fix for at least a year, probably more, but people are going to be dying in the streets — it will become the New Normal, you watch — long before that. And since the same establishment that’s propping up Ahnuld is also spearheading constitutional “reform,” how much you want to bet we’re not going to see Prop 13 reformed, or any hike in corporation taxes? We might see the 2/3rds rule adjusted somewhat, but not enough (I’ll bet) to really hamper Republican control of taxes and budgets.

    So yeah, we are definitely fucked, but that does not in any way justify or excuse the total obliviousness of our rulers and representatives in DC.

    They can’t responsibly sit on the sidelines doing their nails. If what looks like is gonna happen happens — that almost all of the cuts will be enacted, no backfilling with stimulus or any other funds —  then the message from DC is incomparably brutal, cruel and essentially without precedent. What they’re saying to California, literally, is, “Drop Dead!” And that’s literally what’s gonna happen to a whole lot of people. And furthermore, they’re saying, “You aren’t even Americans!”

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