Tag Archives: Don Perata

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Whatever Happened to the “Out of Iraq” Referendum?

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I wrote this for today’s Beyond Chron.

Remember when Democrats were pushing George Bush on the War in Iraq?  Remember when presidential candidates were getting heat for having supported the War – or their being wishy-washy about getting us out?  With California’s presidential primary in just two weeks, we were supposed to have a Proposition on the February ballot – making it official policy that the people of California support withdrawal.  State Senate President Don Perata championed the issue and the legislature voted to put it on the ballot, but then Governor Schwarzenegger vetoed it.  If Democrats were serious, however, they could have gathered signatures to put it on the ballot – regardless of what Arnold did.  Doing so would have boosted Democratic turnout, kept the issue alive and held all presidential candidates accountable.  Instead, we have allowed Iraq to slip from the consciousness of politicians – eluding a golden opportunity to help end this quagmire.

It’s no secret why Senate President Don Perata wanted to put this measure on the ballot – the same reason why he and Assembly Speaker Fabian Nunez championed moving up California’s presidential primary to February.  They want to extend term limits to keep their jobs longer – and Proposition 93 has been their priority all year long.  If a high-profile issue like the Iraq War were on the state ballot, it would boost Democratic turnout.  Most of these voters were inclined to support Prop 93.

Four months ago, the two Democratic houses of the state legislature passed SB 924 – which calls upon the people to vote on whether the President should get our troops out of Iraq.  It was technically an “advisory measure”- but putting it on the same ballot as the presidential primary would have had a political impact.  California voters strongly oppose the War, forcing the issue on the mind of candidates.  San Francisco voters passed a similar measure in 2004.

In September, Arnold Schwarzenegger vetoed it – so it failed to get on the ballot.  Not that his veto was much of a surprise.  The Republican Governor has always supported the War, and SB 924 passed the legislature on a party-line basis.  The California Constitution says that state propositions can either be placed on the ballot: (a) by the state legislature and the Governor, or (b) by collecting signatures from a certain percentage of voters.  If the Governor’s veto was predictable, why wasn’t the latter option pursued?

Of course, Arnold’s veto gave Democrats a chance to do some political grandstanding.  “The self-proclaimed ‘People’s Governor’ owed nothing less to the people of California and our troops overseas,” said State Party Chairman Art Torres, “than to let the voice of the voters be heard on this disastrous war in Iraq.”  But besides that, they just let the issue die.  Now we continue to hemorrhage American lives, American dollars and America’s standing in the world every day – when California had the opportunity to speak loudly.

Granted, it costs a lot of money to gather the necessary signatures to put a proposition on the ballot.  But it can be done.  Community college advocates put Prop 92 on the ballot by petition signatures.  Unions put Props 94-97 on the ballot by petition signatures, in order to repeal the anti-labor gaming compacts.  And the Democratic leadership – yes, the same people who said they want us out of Iraq – put Prop 93 on the ballot by petition signatures.

Nunez and Perata were willing to put in the money to collect signatures for a proposition that will extend their terms in office – but would not do the same for an albeit symbolic measure that would keep the most important issue facing America today in the minds of politicians who want California’s support.  Polling for the measure was sky-high: Californians supported it by a 2-1 margin, and among Democrats it was 10-1.

In April, when Perata and Nunez were still trumpeting the idea of putting this on the ballot, all the Democratic presidential candidates came to the state party convention.  Iraq was on everyone’s mind, and we had the time to hear from candidates about how they will get us out.  But now that they’re coming back to ask for our vote, it is less of an issue.  Beltway pundits are now proclaiming that the presidential race is less about Iraq, and more about the economy.

Why was this not a priority?  Could it be that Nunez and Perata, along with U.S. Senator Dianne Feinstein and the bulk of California’s Democratic establishment, have endorsed Hillary Clinton?  Senator Clinton voted for the Iraq War Resolution in 2002 while Barack Obama opposed it – and if Iraq becomes the central issue for California Democrats when they pick a candidate, she could be in trouble.  Maybe they just didn’t want to embarrass Clinton, and lose patronage in the next Democratic Administration.

Our leaders in Sacramento told us that an early California primary meant that we would have more “clout” in picking the next President.  In the minds of most voters, that would mean holding candidates accountable on issues – like the War in Iraq – where Californians are more progressive than the rest of the nation.  But it seems like their true motivation was Prop 93 – so that if it passes in February, some of them can run for re-election in June.

The Democratic leadership put their money where their mouth is – by paying to gather signatures for Prop 93, but not for a “Get Out of Iraq” referendum.

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Proposition 93: Even Ugly Babies Need Love

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( – promoted by jsw)

Disclaimer:  I am paid by exactly no-one to advocate for any political position.  I’ve heard rumors that certain people would actually pay me to stop.

There’s been a lot of heat, and not as much light as would be ideal, generated around Proposition 93, the ballot initiative to extend (a bit) the current legislative term limits.  I have already turned in my absentee ballot, and I voted for Proposition 93, despite its manifest flaws.  If you’re interested in why (and my take on those flaws), it’s below the fold.

First, here’s what Prop 93 does, according to the Legislative Analyst (who so recently cast her long and erudite shadow over the proposed health care reform):

Background: The state’s voters passed Proposition 140 at the November 1990 election. As well as other changes, Proposition 140 changed the State Constitution to create term limits for the Legislature-Members of the Assembly and Senate. Term limits restrict the number of years that individuals can serve in the Legislature. Currently, an individual generally cannot serve a total of more than 14 years in the Legislature. (An exception is when an individual serves additional time by finishing out less than one-half of another person’s term.) An individual’s service is restricted to six years in the Assembly (three two-year terms) and eight years in the Senate (two four-year terms).

Proposal:

Time Limits Without Regard to Legislative House. Under this measure, an individual could serve a total of 12 years in the Legislature (compared to 14 years currently). Unlike the current system, these years could be served without regard to whether they were in the Assembly or Senate. In other words, an individual could serve six two-year terms in the Assembly, three four-year terms in the Senate, or some combination of terms in both houses. (As under current law, an individual could serve additional time by finishing out less than one-half of another person’s term.)

Current Members of the Legislature. Under this measure, existing Members of the Legislature could serve up to a total of 12 years in their current legislative house (regardless of how many years were already served in the other house). This could result in some current Members serving longer than 14 years in the Legislature.

So, it’s a pretty moderate change to the current term limits, except that last paragraph with respect to sitting legislators, about which more in a moment. It does remove the incentive for the legislature to play musical chairs every election, and it allows each house of the legislature to develop an institutional memory of a decade or so.  This is important to me, as it ties into the reason that I am opposed to term limits for legislatures.  Despite all of the badness associated with perpetual incumbency, in my view the alternative is to turn over the entire institutional memory of how you get things done over to unelected staff (and worse) lobbyists.  I’ve picked my poison, and I can live with it (and more on that below).

Now, that last paragraph, that’s a doozy, ain’t it?  Basically, the people currently sitting in the legislature completely screwed up the politics on this, if they actually wanted to deal with term limits, not just keep their positions.  And of course, it’s impossible to to dismiss as an innocent coincidence the fact that both Speaker Nuñez and President pro Tem Perata would be termed out in 2008 after the end of their current terms if Proposition 93 does not pass.

If the legislature had really been serious about changing the landscape on term limits, not just keeping themselves in office, they could have grandfathered sitting legislators into the old system.  Or the Speaker and the President Pro Tem as individuals could have publicly disavowed further terms for themselves.  But they didn’t.  Instead, the legislature elected to follow a path of fairly obvious and politically toxic self-dealing.  Ironically (and in my view, stupidly), that may result both in sitting legislators (including the aforementioned legislative leaders) losing their seats and an outcome that places the issue of term limits off limits for several years at least.   Well played, gentlemen!  Well played indeed.

And I still voted for Proposition 93.  Term limits are a crappy idea, for the reasons explained above, and in legislation, you have to cut deals, you have to log-roll.  The amusingly perverse situation here is that the interest group with whom you have to cut a deal is the legislature itself.  So that’s the deal I think we’re cutting — longer terms for the current legislature in order to build a better institutional memory and stronger legislators.

As a brief coda, let me note that the notion that term limits (or redistricting) are meaningful structural reform is essentially bogus.  It’s true that with term limits, you will cycle younger people through legislatures, and their attitudes on social issues in particular will change, but you’re still cycling people into and through a system where money buys campaign success, and when those self-selected people arrive at the legislature, the industry lobbyists run the show.  I don’t like that bargain, myself.  But people like Howie Rich and the rest of the radical-right funders of US Term Limits do like that bargain, because they want weak legislators and a lobbyist-run legislature.

Arnold Schwarzenegger, Health Care

Sen. Yee Throws Health Care Reform Into Total Chaos

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The massive health care reform plan brokered by Governor Schwarzenegger and Speaker Nuñez has been fraying at the edges a bit in recent weeks.  State hospitals appeared to waver on supporting the fees that would be charged to them under the plan, and hearings in the Senate Health Committee were delayed a week pending an analysis from the Legislative Analyst.  That hearing is currently scheduled for Thursday tomorrow, but State Senator Leland Yee just put a major wrench into that plan.

On the eve of a hearing for landmark health legislation, a spokesman for Sen. Leland Yee said the San Francisco Democrat will oppose the health care measure. The move throws into limbo whether the legislation has the necessary votes to move forward.

“The costs are a big concern for him,” said Adam Keigwin, a spokesman for Yee, regarding the $14 billion health care price tag that coincides with a projected $14.5 billion budget hole […]

Keigwin said Yee conferred with labor leaders in his district over the weekend who were “almost unanimous” in urging Yee “to vote no.”

With Health Committee chair Sheila Kuehl already opposed to the bill, this means that it would be unable to get out of committee without a Republican crossover vote.  And even with moderate (for the GOP) Abel Maldonado on the committee, that is unlikely.

I don’t think this is the end of the bill by a longshot.  Yee or Maldonado could have their arm twisted, or Kuehl could let the bill pass without a recommendation.

What happens next is unclear, though options certainly remain for passage.

For instance, Senate President Pro Tem Don Perata could ask Kuehl to grant the measure a courtesy vote, allowing it to proceed to the Senate floor despite her personal opposition.

In an interview Tuesday morning, Kuehl reiterated her position, saying, “I’ve been very clear with all the advocates and everybody that I do not favor the bill.”

She said she had not been contacted by Perata or his staff to support the bill. Asked if she would consider granting a courtesy vote if she was, she replied that she “can’t answer that.”

“In the Senate, we generally are equal as members,” Kuehl added.

Don Perata could also kick Yee off the committee and replace him, although he hasn’t exactly been wildly supportive of the bill thus far.

What will happen is anyone’s guess.  But for the moment, this is a major blow to efforts to overhaul health care in California.

UPDATE: Frank Russo has more:

There are rumors that the report of the nonpartisan Legislative Analyst’s Office, to be released soon-tonight or tomorrow morning-will not be all that favorable. That report had been sought by Senator Perata in December to further vet and test the assumptions made so that voters would not be faced with a ballot measure with shaky financial underpinnings in a year of a massive budget deficit, cuts in other programs including health, and uncertainties.

Making it even less likely that Perata will act.  But the pressure on him must be intense.

Arnold Schwarzenegger

Nunez Asks Voters to Pay Steep Price for Prop 93

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I wrote this for today’s Beyond Chron.

Assembly Speaker Fabian Nunez has one priority this February: pass Proposition 93 so that he can remain Speaker for another six years – even if it means betraying Democratic constituencies.  When Arnold Schwarzenegger proposed budget cuts last week, the Governor had at least one good idea: release 22,000 of the state’s non-violent offenders (most of whom are low-income people of color) who are overcrowding our prison system.  But while Republicans predictably cried “betrayal,” the big surprise was that Nunez backed them up – saying such a move would “put the public at risk.”  Did Nunez do this because the prison guards gave $100,000 to pass Prop 93?

If so, it won’t be the first time that Fabian Nunez sold out to advance his career.  A while back, the former union organizer allowed the 4 wealthiest Indian tribes in California to pass anti-labor gaming compacts – after they threatened to campaign against Prop 93.  As voters consider Prop 93 in February, they should wonder what the price is to keep Nunez in power?

Arnold announced some disgraceful budget cuts last Thursday – including $4 billion in education and closing down 45 state parks.  But one idea he had to save money was a good one: release non-violent offenders from prison who have no prior serious or violent offenses and place them on parole.  This would reduce our prison population – currently at 173,000 – by more than 28,000 next year and nearly 35,000 by 2010.  It would save the state $17.9 million this year, $378.9 million next year and $782.7 million in 2010.  Up to 2,000 prison guards will be laid off.

Assemblyman Todd Spitzer, an Orange County Republican, called this move a “betrayal” – and the legislature’s caucus of right-wing lunatics will certainly oppose it.  But Fabian Nunez, the powerful Democratic Speaker who represents a poor part of Los Angeles, also opposed the Governor’s proposal because releasing non-violent offenders will “put our public in danger.”

A budget cut opposed by both the Speaker and the Republican caucus is likely dead on arrival.  With the state budget in crisis, that means other cuts in public education, parks and social services will probably become a reality.  Can we really do with even more budget cuts – after the state took $1 billion out of public transportation this year, and the Governor took $55 million out of housing for the mentally ill?

Meanwhile, Nunez has prioritized the passage of Proposition 93 so that some – but not all – members of the legislature can stay in office longer.  The California Correctional Peace Officers Association (i.e., prison guards) gave $100,000 to the “Yes on 93” campaign committee.  Does that explain why Nunez now says releasing non-violent offenders would “put the public at risk”?

In fairness, Nunez also criticized Schwarzenegger’s budget package for not considering tax increases.  Which is a good point.  Arnold has consistently refused to support raising taxes on the wealthy – as he repealed the vehicle license fee and eviscerated higher education.  But while the state clearly has a revenue problem, Nunez added that tax increases should be a “last resort” – meaning that, unlike his Prop 93, it’s not a priority for him.

Apparently, Nunez prefers to raise revenue by letting the 4 wealthiest Native American tribes build the equivalent of 12 Las Vegas casinos – without respecting California labor law, environmental law, or a guarantee that more impoverished tribes get part of the proceeds.  The gaming compacts are now on the February ballot as Propositions 94, 95, 96 and 97 – so the voters can undo the damage that Nunez and Schwarzenegger inflicted.

Why did Nunez, a former union organizer first elected to the California State Assembly with labor support decided to sell out his main constituency?  The four Indian tribes threatened to spend money against Prop 93 if he did not.  You would think that the Native American tribes would have rewarded Nunez – like the prison guards did – by contributing money to the Prop 93 after he bailed them out.  But they haven’t, at least not yet.  Nunez’s goal was merely to neutralize any opposition to his term limits initiative.

When the Democratic leadership in Sacramento put Prop 93 on the ballot, they said it would be good for progressives because it would keep them in power longer – giving them time to get more experience and be on stronger negotiating terms with the Governor.  It’s why the California Democratic Party and the vast majority of labor unions have ponied up money to the “Yes on 93” campaign effort.  But the question should be what is the value of letting Assembly Speaker Fabian Nunez stay in office longer?

Is it worth letting the prison guards get Nunez to argue against releasing non-violent offenders who shouldn’t be locked up and are a drain on our state budget?  Is it worth doing that when the inevitable result of not releasing these offenders is that the state will make more draconian cuts in education, health care and housing?  Is it worth letting the four wealthiest Indian tribes get a sweetheart deal that disrespects labor law, environmental law and does not guarantee revenue-sharing with impoverished tribes?’

While our term limits law leaves much to be desired, I think we can do a lot better than another six years of Fabian Nunez.

UPDATE: I have been advised that the California Correctional Peace Officers Association (CCPOA) contributed $1 million against Prop 93 — and that they have formally taken a position against it.  This does not negate the fact, however, that the  prison guards gave $100,000 to “Yes on 93” campaign — or that Nunez has criticized the Governor’s early prisoner release program.

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Challenging Denham? The Road to 2/3

The Dump Denham campaign came to life in the midst of last year’s budget wrangling, helped in no small part by Senator Don Perata.  Well Jeff Denham may or may not ultimately face recall, but he’ll be termed out in 2010 if he lasts that long, and it looks like Democrats have themselves a challenger ready.  It seems that Assemblymember Cathleen Galgiani recently moved into Denham’s Senate district.

Galgiani, who succeeded the ever-popular Barbara Matthews in 2006, says she just wants to live closer to the center of her Assembly District, but it certainly is convenient that she also happens to enter SD-12.  Denham’s district is at or near the top of nearly every Dem-target list for the near future, especially as the 2/3 rule collides with the year’s budget crisis.

Just a hunch, but I’m guessing that budget flexibility is going to become a bigger issue over the course of the year, what with that whole budget shortfall thing.  And healthcare funding.  And Indian Gaming compacts.  Might just be that ambition is finding a place in all this.

Arnold Schwarzenegger, Health Care

Well, that was a short-lived Celebration

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Capitol Alert is pretty cool now that it’s not behind a paywall. And today they delivered a little email telling me, right away, that the health care plan should now be referred to in the past tense.  From Senator Perata:

“I think it’s DOA. I haven’t found anybody yet that I have talked to that can make any sense out of it. It sounds ridiculous to say that we’re going to have health care for everybody in four years, but in the meantime most people won’t have health care because we have to cut the budget,” Perata told KPIX.(CapAlert 12.18.07)

You can even watch the video here (comments around the 3 min mark.) So, well it looks like this plan will be another casualty of the growing budget deficit.  Now, let’s see, how did we get into this mess. Ah, yes, the governator “Terminated” the “Car Tax” to show he was no “Girlie Man” on Taxes.  Well, now that he’s boxed himself into a corner over his tax populism, where does he go now.  How does he impliment his agenda without spending money?

So, what’s next?

Arnold Schwarzenegger, Health Care

Wham! Bam! Pass a Healthcare Plam!

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Or Plan. Whatever.  The language was discussed Thursday at the Assembly Democratic Caucus, and then released at Friday. I know how Donna Gerber of the CNA feels about it.  She’s opposed. Now, I’m not so sure about Anthony Wright. He’s got some complimentary words with a bit of a concerned tone here and here, but no real yay or nay that I could see.

So, now the AB 1×1 just passed the Assembly Appropriations Cmte. And there’s a Press Conference Scheduled for 4:30 with a host of big names scheduled to show up. Including the star of WTF is up with SEIU Andy Stern. So, I’m just guessing that they will try to get ‘er done before then so they don’t keep Oakland Mayor Ron Dellums, the Governator, and the CEO of Safeway waiting.

On the other hand, there’s the Senate. There are no signs of any stirring on this plan from Senator Perata and the gang. If I hear anything, I’ll report immediately. And if you care to watch, there’s the Cal Channel. The video to the right is from the Speaker’s Office about the Plam.

UPDATE: The healthcare plan has now passed the Assembly. Press release over the flip.

UPDATE II: Don Perata is now asking the LAO to assess the impact on a health care overhaul on the state budget.  While some have argued that this plan has its own funding source and will have no impact on the budget, Perata is obviously skeptical, and considering that so much of the budget does involve health and human services, the impact is far less clear than this assumption there’s a wall between health care and all other state spending.  Further, there’s this quote:

“Nothing has changed in Sen. Perata’s position to not bring his caucus before the end of the year,” said Trost.

Which of course imperils the ability to bring the funding initiative before the voters in November.

California Assembly Passes Most Significant State

Expansion of Health Care Coverage in Nation’s History

Most Californians, Including All Children, Covered Under the Plan

SACRAMENTO – Historic health care legislation extending coverage to millions of California’s uninsured, including all children, was approved by the state Assembly today by a 45-31 vote.

“We’ve crafted an amazing and historic bill that expands health coverage for those without it and improves health insurance for those already covered,” Speaker Núñez said. “This brings us one step closer to making health care a right afforded to everybody in this state, and not just a privilege afforded to those with deep pockets.”

Assembly Bill 1X1 is the culmination of nearly a year of negotiations between legislative leaders, Governor Arnold Schwarzenegger, and the state’s leading labor, business, health care, and consumer groups. Dozens of organizations have embraced the bill, including the Service Employees International Union, American Federation of State, County and Municipal Employees, AARP, California Hospital Association, Safeway, March of Dimes, Children Now, Mental Health Association of California, American Nurses Association of California, California Association of Nurse Practitioners, Kaiser Permanente, CIGNA, Blue Shield, and Small Business California.

“No child in this state should be left without adequate health care coverage, and under this proposal, all 800,000 children will be covered,” Speaker Núñez added.

AB 1X1 was amended today on the Assembly floor, incorporating ideas from a number of stakeholders. It relies on a system of shared responsibility between employers, health care providers, consumers, and government agencies. It requires an individual mandate for most Californians, but provides subsidies, rebates, and exemptions for Californians earning up to 450% of the federal poverty line, or for those whose out-of-pocket health expenses would exceed 6.5% of family income. The bill includes significant cost-containment and transparency language, including a requirement that insurance companies spend no more than 15 cents of every dollar on administrative costs. Those with pre-existing conditions are guaranteed coverage under the plan, and all children will be covered.

It is financed through system wide health care cost savings, and through a combination of fees and taxes to be approved by the voters in a November 2008 ballot initiative that will include a tobacco tax, employer fee assessed along a sliding scale based on annual payroll, and a hospital fee.

It now heads to the California State Senate for consideration.

Health Care

It’s Monday Morning!

Well, the holidays are rapidly approaching, and thus let's start out this week with a BANG! WooHoo, put your Monday morning smile on!  Here are a few stories of note, once again bound together with bullets.

  • A vote is scheduled in the Assembly for the health care package, but as has been discussed here, it seems Senator Perata is reluctant. There have been comments here about other Senators not so sure about this plan. The vote will likely appear on the Cal Channel, but don't expect the vote to occur at 1pm when it the floor session is scheduled. I'm guessing the caucus meetings might take a while.
  • SF Mayor Gavin Newsom is discussing a tax on sugary sodas. Apparently, he’s blaming obesity in children on sodas. Oh, what’s that you say, there is a link between the two? Oh, well, I guess it’s time to sell that Pepsi stock.
  • There's a little tussle going on in the other side of the California blogosphere on Prop 93. Jon Fleischman opposes it. Former GOP Sen Jim Brulte has endorsed it. Check out the back and forth here. (Disclosure)
  • Apparently Orange County isn't content with being the biggest municipal bankruptcy in the history of our country, they invested in a bunch of bad debt in the mortgage crisis. It's coming home to roost now. ( LA Times)
  • Some writers are bypassing the studios and starting up their own new media production companies. By the by, QuarterLife, an independent web show, which was then given some money by NBC, will be shown by that network in February. (The QuarterLife folks make clear that their goal was not to create strike busting programming, but that NBC had an option to buy that they, legally, couldn't refuse) Perhaps the studios will learn a bit from these new developments. Or they won't and they'll go the way of the dinosaur. Either way, we'll likely get better content.

Over the flip you'll find the weekly Democratic radio address, this time from Assembly member Ted Lieu about the mortgage crisis. Consider this an open thread.

Hello, this is Assemblymember Ted Lieu, chair of the Assembly Banking and Finance

Committee.

    As our state faces looming budget shortfalls that threaten vital funds for infrastructure,

public safety, and social services, the emerging sub-prime mortgage crisis is poised to

jeopardize our attempts to salvage our state’s financial commitments.

    Because reckless mortgage lenders issued variable interest rate home loans to folks that

simply couldn’t afford to pay their monthly bills, 1 out of every 88 homes in California are

currently undergoing foreclosure.

    According to the Center for Responsible Lending, nearly 180,000 California homes will

be lost to foreclosure from the 826,900 sub-prime loans made in 2005 and 2006 alone.

    California could lose nearly $3 billion in property tax revenue and another $1 billion in

sales and transfer tax revenue.

    Remarkably, an estimated 61% of the sub-prime mortgage borrowers would have qualified for loans with more reasonable monthly payments, had their lenders not been so narrowly focused on short-term profits.

    But this isn’t just a problem for those about to lose their homes.

    Home prices are expected to decline in California by up to 20-percent and that’s

because each foreclosure within an eighth of a mile of a single-family home results in a 1%

decline in the value of that home.

    And working- and middle-class neighborhoods are especially in danger of being blighted due to abandoned homes.

    While this is not uniquely a California problem, our state is especially hard hit, with five

of the top ten areas with the highest foreclosure rates in the country, including Stockton,

Riverside/San Bernardino, Sacramento, Bakersfield and Oakland.

    And the response from the White House has simply been tepid and woefully inadequate.

    Clearly, the time for legislative action is now.

    Assembly Democrats have compiled a practical and effective package of bills to address

our state’s housing woes, and we have asked the Governor to call for a special session to

bring to the table all interested parties.

    Our package includes bills that will identify at-risk borrowers and determine what

lenders have done to assist them and ban prepayment penalties that essentially prevent

borrowers from refinancing.

    Other bills add consumer real estate mortgage loans to the list of consumer contracts

subject to California civil code translation requirements, protecting potential homeowners

for whom English is a second language, and we hope to end incentives and kickbacks that

spur lenders to push sub-prime loans onto buyers ill-equipped to afford their monthly

payments.

    And our bills will improve counseling services that can protect consumers from bad loans

and help them find potential avenues for keeping their homes, and we will introduce tough

income verification regulations, requiring lenders to consider an applicant’s ability to repay

over the life of a loan.

    Assembly Democrats are committed to working in a bipartisan and pragmatic fashion to

protect homeowners and preserve our state’s fiscal solvency, and we hope others in

Sacramento are equally committed.

    To allow these necessary reforms to be subject to partisan gridlock is literally not a

luxury our state can afford right now.

    Thank you for listening. This has been Assemblymember Ted Lieu, chair of the Assembly

Banking and Finance Committee

Budget, Health Care

Is Perata Nixing Health Care Reform?

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In light of the projected $14 billion budget shortfall, Senate leader Don Perata said late yesterday “‘it would be imprudent and impolitic to support an expansion of health care’ before addressing the state’s budget deficit and its impact on existing programs.”

Meanwhile, Fabian Núñez is “so confident that we will be successful in reaching agreement that I have called for the Assembly to meet on Monday, December 17 in order to take up and pass AB 1X.”  So where are we actually heading on this?

Governor Schwarzenegger is calling for 10% spending cuts across the board in response to the budget shortfall that everyone knew was coming.  And as Dave points out, this means everyone who can’t afford to live without government gets screwed while the rich continue on their merry way.  It also means that next year’s budget fight will likely turn this year into the good ole days of budget wrangling.  And if Perata is serious about not passing anything as long as there’s a shortfall, then we ain’t passing anything for a while cause the shortfall isn’t going anywhere.

But before we even get to that, we find out whether all the extended sessions, coalition-shredding wars over an acceptable level of health-care (I’m looking at you Shum/Maviglio), time, money and both literal and cyber ink may end up coming to nothing because Don Perata can’t see spending on an important mandate when the political leadership in Sacramento can’t figure out how to balance a budget.

This is ultimately going to encapsulate most of the Calitics greatest hits from the past year; starting with health care, this runs through privatization, water usage, high speed rail and transportation, prison reform, Núñez pecadillos, labor relations, term limits, clean money, taxes, and the 2/3 rule.  Because it all runs back to the ability of people to get elected and pass a budget.

Most of all, it’s likely to reinforce the absurd lack of strong, public political leadership in this state.  There are no advocates.  Nobody has tried to convince me to sacrifice.  Nobody has tried to convince me of the inherent wisdom in a program that I might not otherwise think was a good idea.  The art of the possible is starting to discover that, as it turns out, not very much is possible with a $14 billion shortfall and no bold attempts at change.

Perata’s statement closed by saying “The real issue now is the deficit and how this squares with everything else that we are going to do.”  Everything is back up for debate.  Now that we’re staring at the very real possibility of getting less than we started with, it might not be such a bad time for a return to the fundamental principles of budgeting and state spending.  I’m not sure it could end up much worse.

Arnold Schwarzenegger, Budget, California

Looming Recession Update: Now With Less Looming

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I didn’t have the time yesterday to mention that the Legislative Analyst’s Office has confirmed what everyone had feared for a while, that California is staring a $10 billion dollar budget deficit in the face and there’s seemingly no political will to address the structural fiscal problems underlying the projected deficit and do something about it.  All of the top legislative leaders had something to say about the LAO report, and I didn’t see a ton of leadership there.  Arnold and the Republicans focused on major budget cuts while making vague and insufficient nods toward “serious discussions” on budget reform.  Speaker Nuñez was pretty vague himself though he held the line on a cut-only approach, and Senator Perata had perhaps the strongest response, though it’s perhaps too focused on the past:

“Since last May, I have talked about California’s flawed and unbalanced fiscal structure. Today’s LAO report is another sobering reminder that quick fixes will not provide a long-term solution to the state’s budget woes.

“I once again call on the Governor and my fellow legislative leaders to begin a serious discussion about how to build a structurally balanced budget.

“There is an ongoing gap between state expenditures and revenues that this Governor helped create by slashing Vehicle License Fees and refusing to balance that loss with revenue from another source. That alone accounts for $6 billion of this problem.

“An honest dialogue about closing the budget gap must include exploring all options.”

But the real strong medicine was delivered by the LAO’s Elizabeth Hill.

In releasing her five-year fiscal outlook Wednesday, Legislative Analyst Elizabeth Hill said lawmakers face tough decisions for the fiscal year that begins July 1.

“All the easy solutions are gone,” she said.

Hill, the state’s top budget analyst, called for immediate cuts to “double up” savings for the current and upcoming fiscal years. She also offered solutions certain to meet political opposition, including raising taxes.

Her projections were worse than previously stated by the Schwarzenegger administration, which pegged the shortfall at $6 billion. Hill said the deficit has increased due to growing government expenses that have outpaced revenues in an economy weakened by the real estate slump.

Realistically, since you can’t deficit spend, it’s going to take a combination of revenues and cuts to balance the budget.  This problem is only likely to get worse.  The median home price in the state dropped $60,000 in a month.  That severely impacts property tax revenue.  And the state lost a Supreme Court case where they were trying to stop a payment of $200 million in interest to the teacher’s pension fund.  But those are just the short-term issues.  The problem is long-term.

Hill said the state’s structural imbalance has been around for years – a challenge state leaders have failed to address.

“We’ve been facing a problem every year since 2001-02,” Hill said. “And when you look out to 2012-13, we still do not have our expenditures and revenues in line.”

The state has confronted bigger fiscal crises before. In 2003-04, lawmakers were facing gaps as big as $38 billion. The state resorted to borrowing, which Hill said is exacerbating the current problem because cash is going to debt payments.

Borrowing at this point is almost immoral.  There’s going to be a need to maybe allow some painful cuts in exchange for long-term fixes in revenue structure.  Next year will be incredibly difficult.