All posts by David Dayen

Budget Follies: By the Skin Of Its Teeth

A day after Calitics called the roll of the Yacht Party on the budget deal to be voted upon tomorrow in the State Senate, Shane Goldmacher does the same and comes up with just three Republicans who haven’t signaled a no vote:

The field of potential Republican votes for the budget compromise in the Senate — widely viewed as the most challenging caucus to corral support — has narrowed so significantly that only three members have yet to throw cold water on the tentative deal.

That happens to be the bare minimum of Republican votes needed to pass the $40 billion-plus budget plan.

Those three are Senate Republican leader Dave Cogdill, Sen. Dave Cox of Fair Oaks and Sen. Roy Ashburn of Bakersfield.

Neither Ashburn, Cox OR Cogdill said they would actually vote for the budget, by the way.  You can read all of the statements at the link.  It should be noted that normally, the Senate would need only two Republican votes to pass, but since Mark Ridley-Thomas’ seat is vacant (he was elected to the LA County Board of Supervisors in November) until the March special election, it takes three.

That basically means that full caucus unity is needed from the Democrats, and these three votes would have to come through, for the budget to pass.  And we know that Lou Correa is wavering.

And the outside pressure is on.  Opportunists like Steve Poizner are slamming the deal, and advocacy groups on both sides are urging a no vote.

GOP conservatives were incensed at the notion of a colleague supporting tax hikes, while labor and environmental groups were mad at what they consider Democratic concessions.

“If we’re going to win elections in 2010, we have to say that we’re the other party ? that we’re going to stop tax increases,” said Jon Fleischman, a conservative blogger and a vice chairman in the state Republican Party.

Jeanine Meyer Rodriguez, spokeswoman for the state council of Service Employees International Union, representing 750,000 workers statewide, was upset by spending restraints and billions in budget cuts in the proposal.

“We’re making it clear to all the legislators that if they vote for this, they’re not representing our members,” she said.

This morning’s Republican press release painted the budget as a necessary evil, so the skids are being greased for passage.  Still, with nobody owning the bill and lots of variables, it’s entirely possible that it goes down tomorrow.  Given some of the details, I’m not convinced that’s a bad thing.  But clearly, tomorrow should be… interesting.

CA-38: She’s Her Own Predatory Lender

Grace Napolitano is a fairly unassuming back-bencher Congresswoman from the Los Angeles area, who generally votes well on most issues.  Being in a heavily Democratic district, she hasn’t faced much competition from Republicans in election cycles during her decade in Congress, so she’s had to find somewhere for campaign contributions to go.  Like her pocket:

During a decade in Congress, California Representative Grace Napolitano has pocketed more than $200,000 of political contributions by charging as much as 18 percent interest on money she loaned to her own campaign.

The suburban Los Angeles Democrat made the $150,000 loan in 1998, when she was first elected to the U.S. House of Representatives. Through Dec. 31, her campaign committee has used donations to pay Napolitano $221,780 of interest while reducing the principal by just $64,727, a review of her Federal Election Commission filings shows.

As recently as June 2008, Napolitano held a fundraiser asking supporters and political action committees for money to pay down the 1998 debt. Napolitano, her spokesman and her campaign’s lawyers didn’t respond to requests for comment […]

For Napolitano, a 72-year-old grandmother of 14, the campaign IOU has been a profitable asset, far outperforming stocks since the loan started accruing interest in May 1998. Over the same period, an investment in the Standard & Poor’s 500 stocks, with reinvested dividends, would have lost more than 7 percent, according to Bloomberg data.

A case could be made that if you’re silly enough to contribute to Grace Napolitano in a D+20 district, you deserve to be fleeced.  But of course, the great majority of her contributors are corporate clients that are funneling personal contributions to her through interest payments on her initial loan.  It’s really shocking, particularly considering that she represents a district with a 16% poverty rate.  

Napolitano is a solid vote but we can expect much better than this from our public officials.  Politics should never be an avenue for self-aggrandizement.

Burton Watch Offers Revealing Critiques Of The Man Who Would Be CDP Chair

It’s been distressing to see the race for CDP chair turn from an election into a coronation, with John Burton lining up institutional support, muscling out the grassroots and forcing his competition to the sidelines.  Coming off an historic Presidential election, with the demographics squarely on the side of Democrats and a new generation of activists who have boundless ideas to bring a different organizing philosophy to California, the right chairman of the Party could really leverage the energy and activity into something special, to lay the groundwork for a re-imagining of the political structure.  Sadly, the best can be said of Burton is that he’s an old workhorse, but there are troubling signs that he is unaware of the changes in modern campaiging, unconcerned with reforming the broken institutions both inside and outside the party, and unable to use the new energy and excitement to any decent ends.  It appears that the frenetic organizing outside the party structure may be the only hope for progressives in the near term.

But it could be even worse than that.  The new site Burton Watch offers a substantive critique of the former State Senator, with information that every delegate and voting member of the Party ought to know before turning over the reins to this guy.  The initial post surveys how Democrats could lose California under this version of leadership:

Because the public instinctively knows that when power and money compete with the public interest, we all suffer. If you’ve ever registered voters or walked precincts for a candidate, you’ve undoubtedly been greeted with this response: “I’m not going to vote because it doesn’t matter. All politicians are the same.” And as the cynicism grows, voter turnout declines and the Decline To State registration escalates — now approximately 20% of all Californians are registered DTS. So how do we combat the innate distrust that drives a large segment of our population to disengage from political parties and even voting? Well, Obama showed us a part of the solution […]

When previously disenfranchised voters, minorities, and the young are all flocking to the Democratic Party because we represent a new way, a vision of hope and change, why on earth would we want to take a giant step backwards to the bad old days? And yet that’s exactly what Democrats in California are poised to do this April. The California Democratic Party, instead of rising to meet the challenges of a new millennium with openness and inclusion, is set to reach back to one of the oldest and most entrenched political machines in California history for its leadership.

Enter John Burton, California’s much older version of Rod Blagojevich. There are so many reasons why John Burton is unfit for the role of Party Chair in California, that I’ll be doing a series of posts, each one dedicated to a disqualifying aspect of his background. All of the material I’ll be using has been obtained through basic use of the google, and the state’s Republicans could easily find and use it against California Democrats. And trust me, they will.

At the end of this series, I think you’ll agree that John Burton is the wrong person to lead the California Democratic Party in 2009.

The next installment recounts perhaps the most infamous episode in Burton’s past – the very public sexual harassment lawsuit brought by a former staffer, with excerpts from the complaint filed by Kathleen Driscoll in San Francisco Superior Court:

During DRISCOLL’S employment, BURTON engaged in hostile, demeaning and sexually abusive conduct such that DRISCOLL’S working conditions were significantly altered. His conduct over the past year easily rises to the level of severe or pervasive conduct for a hostile work environment sexual harassment claim both in California and under federal law. The harassing acts started in approximately September 2006. They consisted of numerous events, which took place throughout DRISCOLL’S employment, including but not limited to:

Asking DRISCOLL over the phone, “What are you wearing?” on approximately 10 occasions;

On one occasion, DRISCOLL sent a temporary employee to deliver paperwork to BURTON. BURTON ordered DRISCOLL to never send someone on her behalf again by berating her, “When you drop stuff off, stop in will ya? I mean I’m not getting laid under the fuckin’ table.”

Singling DRISCOLL out for exorbitant demands and attention, included but not limited to excessive demands for immediate and frequent meetings to go over routine matters, including on weekends after the work week was over in contrast to her co-workers;

There’s more at the link, and it’s pretty graphic.  It goes without saying that women make up an extremely large bloc of the Democratic base.

I don’t know what more Burton Watch will trot out, but here are some facts: Californians have little connection to their state government other than knowing that they don’t like it.  They hear things like how politicians are living high off campaign donations and it’s both alienating and corrosive.  The rules are already rigged in favor of a conservative wipeout of government and the last thing Democrats need as they seek to make structural changes is the spectre of an old-school pol with a lot of skeletons hanging over their collective heads.  John Burton has the potential to take the state backwards and it’s a chance that delegates should think long and hard about.

DiFi Tries To Hand Corporations A Giveaway In The Stimulus

The final numbers on the stimulus package are trickling out.  Some of the baseline investments are here:

* Investments in Infrastructure and Science – $120 billion

* Investments in Health – $14.2 billion

* Investments in Education and Training – $105.9 billion

* Investments in Energy, including over $30 billion in infrastructure – $37.5 billion

* Helping Americans Hit Hardest by the Economic Crisis – $24.3 billion

* Law Enforcement, Oversight, Other Programs – $7.8 billion

It’s unquestionable that the conference report is worse than the House bill but better than the Senate.  It costs less than the Senate bill while providing more stimulus.  Some bad spending like the clean coal “FutureGen” project is out, along with some of the worst corporate tax breaks.  Mass transit spending is up, the child tax credit was partially restored to House levels (now kicking in after $3,000 in income), and the state fiscal stabilization fund gets around $54 million (but that includes funding for school construction).  You can find the full summary here.

There are some very solid elements to the bill.  White House economists estimate that the package will create or save 396,000 jobs in California and 3.5 million nationwide.  This is a down payment on a new generation of investment in America.

However, like with most Congressional sausage-making, there may be some rough patches.  The worst is the allegation that Dianne Feinstein is trying to include filtering into the stimulus as part of the program to expand broadband capacity across the country.

The Open Internet Coalition – which includes groups like Public Knowledge, Free Press and the Computer and Communications Industry Association (CCIA) – is applauding the more than $2 billion expected to be in the stimulus bill for broadband build-out in rural or underserved areas. They say not only will building out high-speed Internet instantly create jobs, but giving people in those areas more access to the Internet will spur small-business creation and other growth […]

These groups are also over-the-moon about the fact that the Senate bill has a non-discrimination, interconnection requirement that essentially says any provider receiving stimulus funding has to make sure they provide equal access to everyone over their network (part of the so-called “net neutrality” debate). The House version requires the FCC to define “open access,” which essentially calls for carriers to share their networks with competitors.

But they’re worried Hollywood is still trying to insert a content filtering provision via Sen. Diane Feinstein, D-Calif., at the last minute. Feinstein has been trying to add language specifying that Internet service provider (ISPs) may engage in “reasonable network management” … “such as” efforts to combat illegal activity like “child pornography and copyright infringement.” In essence, some argue, ISPs would be able to monitor any content coming to and from your computer, just in case there was some copyrighted material violating fair use, or kiddie porn in there.

But groups like the Motion Picture Association of America stress the “network management” angle of the bill (“filtering” is a nasty word around these parts). After all, it’s hard to argue against stopping kiddie porn from being sent over one’s pipes. I’ve left a message with Feinstein’s press office to see what the status of her amendment is. It doesn’t appear to be in there, but I’ll let you know if she plans on trying to stick it in at some point.

“Of course we see huge privacy invasions from this sort of thing,” said Cathy Sloan of CCIA.

Now, some caveats.  There was a hyperventilating story in the UK Register claiming that this would kill net neutrality.  As stated earlier, there are open access provisions in the stimulus, and it doesn’t appear that this amendment even made it into the final version.  This looks to me to be more of a privacy and anti-competition issue.

In another part of that story, Henry Waxman was implicated.  His office has assured multiple constituents, including yours truly, that he has had nothing to do with any filtering amendment.

That’s not to say that we shouldn’t be concerned.  DiFi is allegedly trying to pay back a corporate constituent with a highly invasive amendment that would certainly violate the spirit if not the letter of privacy laws.  And of course this kind of monitoring is a slippery slope, as are most IP issues.  At the root I agree with John Cole:

As baseball season is getting close, I would like to propose a trade. We give the Republicans Dianne Feinstein and a PTBNL and they give us Olympia Snowe. This is a solid trade for us. With Judd Gregg at commerce, we would almost complete the New England rout, and Feinstein, as a newly minted Republican, will go down to certain defeat in California. Additionally, there is nothing in this agreement that says the PTBNL can’t be Nelson or Lieberman.

Eric Garcetti Stomps On Budget Deal, Lights It On Fire

Before last night’s blogger conference call with LA City Council President Eric Garcetti, my opinions of the budget deal from Sacramento weren’t very well-formed.  I think I have become so inured to craptastic solutions from Sacramento that this one looked no worse than others.  Of course, I don’t have a responsibility to constituents and a need to implement the outlines of the plan, so Garcetti’s very forceful words against the package kind of snapped me out of my slumber.  Here’s a paraphrase.

“I think it’s a reflection of a broken system.  It’s like shooting a little morphine into a sick patient.  I think depending on federal dollars to balance the budget is irresponsible, and will blunt the impact of the stimulus.  It means that the county and school districts will see a lot of projects rolled back.  The health care cuts are going to be devastating.  You’re going to see a lot more homeless people this year, a lot more people who need critical care and can’t get it.  So there is no joy in this resolution other than that it is a resolution.”

Very strong stuff.  And he’s not wrong.  My one quibble would be that it’s not the reliance on federal stimulus dollars to balance the budget, which is necessary and will save jobs throughout the system, that gets me, but the continued reliance on borrowing and the raid of voter-approved funds for mental health and early childhood programs, which is illegal and will require the unlikelihood of passing new initiatives.  

There isn’t any margin for error if, say, one of the FIVE measures that will now be on the ballot in order to secure the budget fail, or if the giant corporate tax cut fails to satiate business, or if nobody wants to buy our debt or buy the state lottery, which is losing revenue.  It’s another seat-of-our-pants craptastic budget which makes no long-term solutions and essentially keeps intact a broken structure.  Garcetti is right that the problem is systemic, and so that’s the goal for progressives in the state for this point forward – systemic change.

Solis Approved In Committee – Goes To The Full Senate

It was a long struggle with a somewhat anti-climactic resolution, but Hilda Solis was approved by the Senate HELP Committee (Health, Education, Labor and Pensions) on a voice vote.  Today over 20,000 petition signatures were delivered to the leaders of the HELP Committee by SEIU, UFW, UFCW, Change to Win and the Courage Campaign, and those voices were heard.

Now the confirmation moves to the full Senate for a vote, where it will hopefully be approved in short order.  Sometimes we win one.

What Is This “Deal” You Speak Of?

I think we may be a little premature in calling this budget a done deal.  Dave Cogdill says it’s the best the GOP could get, but won’t even commit to voting for it HIMSELF:

“My deal, one more time, has always been that I would try my best to get it to a position where I felt it was as good as I could get and I was willing to release my members,” Cogdill said in a brief interview in the hallway outside his office. “That’s where I am. So I’m not guaranteeing any votes; it’s up to them (his members) to make that decision.”

“But I’ve negotiated it to the point where I think it doesn’t get any better,” Cogdill said.

Asked if he specifically would support the package, Cogdill hedged, “We’re waiting to see all the language and all of that so I’m not ready to commit who the votes will be at this point.”

Not a guarantee at all.  This still could be torpedoed when the votes come in.  In fact, Abel Maldonado, thought to be the most likely Yacht Party member to vote yes, had this to say:

“All I can say is that there’s still another $1 million for John Chiang for furniture in this budget so it’s an easy vote ‘no’ for Maldonado,” the Santa Maria Republican said.

That’s a reference to the recent spat between Maldonado and state Controller John Chiang over furniture purchases.

Doesn’t seem like a deal to me.  And Maldonado is an idiot, because the Controller budget was appropriated before Chiang showed up and was probably agreed to by him at the time.  But this isn’t about intellectual consistency.  It’s about looking for any excuse for the Yacht Party to hide from their responsibilities.

…oh, and the whole thing could be sunk by Lou Correa.  Awesome.

Update by Robert: Someone needs to ask Abel Maldonado why he thinks chairs come before children.

The Raw Numbers From The Federal Stimulus

When the cuts to the federal economic recovery bill in the Senate were made public, my back-of-the-envelope calculation was that $5-$8 billion dollars in aid to California would be lost.  The San Jose Mercury News did the math and came up with similar numbers.

The $838 billion Senate bill would create about 400,000 jobs in the state by funding infrastructure projects, from schools to roads to broadband. But that’s 51,000 to 63,000 fewer jobs for the state than the $820 billion House bill, according to the Center for American Progress. The Senate plan puts a heavier emphasis than the House bill on stimulating the economy through tax cuts, in addition to direct government spending.

Funds for reimbursing state Medicaid costs are about the same in each bill, but the funding formula in the House bill favors states with higher unemployment. California would receive $11 billion in the House bill and $9.6 billion in the Senate measure. The House bill also has funds to help those who are recently unemployed receive health coverage. “On health, the House bill is significantly better for California,” said Anthony Wright, executive director of Health Access California, a consumer advocacy group.

The Senate cut in half the House’s $79 billion fund to help states pay for education and other services. If the Senate version prevails, California would receive about $4 billion instead of the $7.9 billion in the House bill. In addition, the Senate eliminated $14 billion in funds the House allocated to modernize schools, which drew sharp criticism from Rep. George Miller, a Concord Democrat who chairs the Education and Labor Committee. He said the Senate version would cost 315,000 construction and other jobs nationwide.

“With more Americans losing their jobs by the day, we must make every effort to bring that figure up,” Miller said.

The Chronicle has a similar article.

The latest from the negotiating table is that only $5 billion of the $40 billion cut from the Fiscal Stabilization Fund will be restored in conference.  So that’s about $3 billion less, overall, for California from that fund, as well as the cuts to Medicare funding of about $2 billion.  The school repair funding will be restored to about $6 billion from $16 billion, which means that California probably loses $1 billion there.

So overall, we’re probably $5-$6 billion short from where we were with the House bill.  Which will make it that much more difficult to cut a budget deal.  In addition, if the formula for getting federal funds is in the form of block grants with a state match, California won’t be able to access any of them until the cash crunch is solved.

Solis Update

Politico reports that the recent tax issues surrounding Hilda Solis’ husband won’t derail her nomination for Labor Secretary, but they’re still going to obstruct:

Key Republican senators on the committee vetting the California Democrat’s nomination say they won’t blame her for the problems facing her husband, Sam Sayyad, who paid around $6,400 last week to settle tax liens against his auto-repair company.

But they are still exploring the congresswoman’s ties to a pro-union organization, and a vote on her nomination has yet to be scheduled […]

Solis has angered some Republicans’ on the panel for deflecting questions on her positions over controversial “card-check” legislation, which would make it easier for workers to unionize, and for whether she supports maintaining right-to-work laws that prohibit forcing workers to pay union dues as a condition of employment.

Those issues, however, are not enough to drag down her nomination and Republicans are unlikely to block the nomination, according to aides and senators.

Still, there is one last issue that could influence the HELP committee’s upcoming vote. The committee is waiting for additional information about her role as an unpaid board member and treasurer for the pro-union group American Rights at Work, while she was a member of the House.

Isakson said they are reviewing whether her role in an organization lobbying Congress violated campaign finance rules, “which I think would just come back to hurt her if we didn’t get that out and cleared out one way or another.”

These are just a series of stall tactics to drag this confirmation out.  Solis’ involvement with American Rights At Work has been gone over plenty of times.  It is a red herring.  Hilda Solis needs to be confirmed now.  Sign the petition.

The Furloughs Didn’t Work

Incredibly, forcing people to take off two days a month against their will not only lowered morale and increased inefficiency at state agencies, it didn’t put much of a dent in the budget crisis.  Revenues are still coming in short and will for the forseeable future.  So the Governor put the hammer down.

Gov. Arnold Schwarzenegger will move to lay off as many as 10,000 state workers if lawmakers fail to pass a plan to close California’s nearly $42-billion deficit by the end of the week, an administration spokesman said this morning.

Schwarzenegger’s press secretary, Aaron McLear, said at a media briefing that the administration would send out pink slips Friday, absent a budget deal. The layoff process generally takes about six months for state employees due to union rules and other legal considerations, and bureaucratic procedures the state must follow. The move would save the state $150 million annually if the jobs are eliminated by July 1, according to McLear.

This would have been a good thing for the Governor to be working on, I don’t know, yesterday, instead of jetting to Idaho.  It turns out that Arnold was making a scheduled appearance at the Special Olympics – but he cancelled a similarly scheduled appearance at the Republican National Convention when budget talks were ongoing last year, and if anything the crisis is worse now.  This is another case of Arnold making stern pronouncements in the media instead of doing his job.  He is a failed governor and frankly the press are the only people who will listen to him.

…I should mention that George Skelton came out yesterday for lowering the 2/3 requirements for budgets AND taxes, albeit on the latter he added a caveat that tax increases can’t be used to grow government above the rates of inflation and population growth.  I’m not much for the caveat, but Skelton is a bellweather for the media elite in California, so this is important.