If you’ve been watching California politics for a while you may already know this to be true, but for those who ask me why the Republicans are so intransigent and inflexible when it comes to the budget, hear former Assemblyman Ray Haynes (h/t CapAlert) explain to you the reason.  It’s really really simple and intuitive.

The key problem, I said, was that the Governor and the Democrats were asking Republicans to betray a key principle of a key constituency and get nothing in return.  The result to any Republican who voted for that tax increase would be the end of their political career.  I know, because, I said, I would do everything in my power to make sure of it for anyone who voted for that tax increase, and I know there are a lot of Republicans who think like me […]

Democrats are asking Republicans to end their political lives, but are not willing to end their own.  Democrat constituency groups are asking Republican constituency groups to sell out their core principles, but are not willing to sell out any of their own.

This is an example of the Iron Law of Institutions, which states: “The people who control institutions care first and foremost about their power within the institution rather than the power of the institution itself. Thus, they would rather the institution “fail” while they remain in power within the institution than for the institution to “succeed” if that requires them to lose power within the institution.”  It is an expression of self-interest over the greater interests of the state.

You can hardly blame them.  Republican primaries in California can get nasty, far worse than their races against Democrats.  And the last time Republicans crossed over in any numbers to pass a sensible budget, the far-right fringe of the party punished them – and reinforced the Iron Law.

Democrats and their constituency groups have already made it clear that they are giving up nothing for ending your political career.  You had better get a lot personally for it, because once it is done, and you are out of office, they will forget you ever existed.  Just ask Mike Briggs, Brian Setencich, Anthony Pescetti, Dave Kelley, Paul Horcher, and Dick Dickerson.  They gave the Democrats what they wanted, and they are now enjoying their time in the private sector.  You will too.

What’s significant here is how Haynes uses this kernel of truth to promote a bigger lie – that Democrats have “given up nothing” in a grand bargain to save the state.  This is simply not true.  For years and years they have made painful cuts to key programs, have expedited projects by waiving environmental restrictions, and have gone at least halfway on the budget.  In Haynes’ conception of the Iron Law, Democrats have to be willing to do something that would lose them their seats in office in order to get cooperation.  He is asking, in essence, for a suicide pact.  The fact that Democrats control the majority and one would think are actually entitled to enact their policies, and subsequently get called to account on the effects of those policies periodicially by the voters, doesn’t enter much into Haynes’ thinking.  He alludes to it here:

Getting a political majority does entitle groups and people to certain policy gains.  That is what getting power is all about.  Winners get to enact their policy initiatives.  They don’t get to whine however when the minority has the opportunity to advance their policy initiatives, and the majority has to give up something to get what they want.

Of course, the majority HAS given up plenty to get what they want.  But what Haynes calls “whining” is simply pointing out that a democracy with majority rule in elections might want to take the same course in governing, lest a tyranny of the minority take hold and create a hostage situation.  I assume he wouldn’t see it the same way.

There are only a couple ways to break this.  One is to reform the rules that gridlock the state so that every member can continue to vote their conscience without punishing the citizens in the process.  The other is to make those members of the Yacht Party institution MORE afraid of their general election than their primary election.  We have made small strides toward a 2/3 majority, but essentially have failed in the past two cycles, which were promising for Democrats nationally.  Only by growing the party and breaking the working conservative majority in the legislature will the rule of the Iron Law become irrelevant.

Something for the legislature to read while they’re on LOCKDOWN.

• We’re in a special session of the legislature, separate from their normal work.  So while the Yacht Party stonewalls and both sides bicker, they are making $173 a day for the privilege, with the current total at $128,000 and counting.  Good work if you can get it.

• Stockton, Merced and Modesto were dead last nationally in home prices, with homes in all three metro areas losing at least 30% of their value in the first nine months of the year.  The Central Valley is just getting buried.  If you want to know where the rest of the state (and the nation) is headed, look there.

• The state’s Healthy Families program, California’s contribution to S-CHIP, was on the verge of becoming extinct until First 5 provided a $16 million dollar cash infusion, allowing their enrollment to remain open through the end of the fiscal year in June.  This is of course one of the programs on the Yacht Party’s chopping block.  Because who likes healthy kids?

• Peter Schrag tore the Yacht Party a new one today, and it was most satisfying.

Today’s GOP is a very different party, a hard-line group of self-insulated ideologues, more like a political cult than like an inclusive party that stretches its core principles to be inviting to people at or beyond that core.

Couldn’t have said it better myself.

• SD-26: Mark Ridley-Thomas, now an LA County Supervisor, has endorsed Assemblymember Curren Price to fill his seat in the upcoming special election, the primary of which is scheduled for March 24.  Price is expected to be challenged by Assemblymember Mike Davis.  Either of them winning would trigger ANOTHER special election for their vacant Assembly seat.  And on and on.

• CA-31: Ben Smith is reporting that Xavier Becerra will turn down the position of US Trade Representative.  When there was a two-week lull after the rumor leaked with no announcement, I figured as much.  All the more reason for Hilda Solis to run for Governor, as the Vice-Chair of the House Dem caucus won’t be opening up.

Open Left’s Paul Rosenberg summarized our site over the past week by musing that California is a failed state.  It’s hard to argue with that.  We have a political system governed in exactly the opposite direction of the will of the people.  Despite 63% majorities in the Assembly and the Senate, in Sacramento the Yacht Party rules.

California is bleeding Republican red as the state’s minority party tries to squeeze a spending cap and pro-business policies from fiscal chaos.

Badly outnumbered and often ignored by the Democratic-dominated Legislature, the GOP is not getting sand kicked in its face these days.

California is hurtling toward a financial abyss, projecting a $40 billion shortfall by July 2010, and no deal can be struck without at least three Republican votes in both the Assembly and Senate.

GOP officials clutch that trump card with relish as the state braces to pull the plug on $5 billion in public works projects and warns it won’t be able to pay all its bills by February or March.

Kind of amusing that the Treasurer thought he was making a threat to Yacht Party regulars when he vowed to shut down infrastructure projects without a budget deal.  To the GOP, that’s a GOAL.  All the posturing and tut-tutting at the lack of compromise, along with the horror stories spun out as a consequence of doing nothing, simply bolster the Yacht Party argument.  If you haven’t been paying attention, they want to do nothing.  They want to end government.  In a way they are the ultimate anarchists.

There’s supposed to be some kind of “cuts only” package released by Republican leaders today, by the way:

The GOP is scheduled to unveil its own proposal Monday, with no tax hike. The plan is expected to identify about $11 billion in budget cuts and, among other things, propose asking voters to redirect money designated for mental health programs and preschool programs and services.

State Treasurer Bill Lockyer, a Democrat, characterized the high-stakes showdown between legislative Democrats and Republicans as political “chicken,” with each party expecting the other to blink.

“I think they’re going to run off a cliff,” Lockyer said.

Incidentally, Bass and Steinberg are willing to come together on good government reforms, which we shouldn’t oppose in a knee-jerk fashion.  Liberals support reforming government and making it effective because they believe in it.  Republicans, under the guise of “reform,” mean to destroy government.  I don’t think there’s anything wrong with a performance review that looks at duplication or ineffective programs and seeks to mend them.  That’s what oversight is all about, and it’s a core function of the legislature.  What I do take issue with is the idea that reform is a “magic bullet” that will end all budgetary worries without anyone having to feel the pain.  That’s irrational and ridiculous, especially in this moment of crisis.

Yacht Party Assembly leader Mike Villines visited the Sacramento Bee editorial board yesterday, and like any good mob boss, he offered an ultimatum.

Solving the budget stalemate is simple enough, Assembly Republican leader Mike Villines said in a visit to The Bee’s Capitol Bureau Tuesday. Democrats have to capitulate to GOP demands for the 8-hour work day, meal breaks, looser environmental regulations, permanent budget cuts and a stiff spending cap, among other things.

Then, and only then, will Republicans come to the table to discuss — but not necessarily agree to — new taxes.

“We think you have to do these reforms first, cuts first and make sure that you’re doing an economic package that puts people back to work,” Villines said. “Then you have a discussion about revenue – and only then.”

Many of these things, you’ll notice, have nothing to do with the budget.  In fact, CapAlert published the ransom note that Villines brought with him, and while he puts his demands in somewhat vague terms (and the Bee should really spell it out if they want to inform the public), it’s pretty clear what he and the GOP want.  They want to eliminate overtime regulations and meal breaks for state employees.  They want to re-legislate already-passed environmental regulations on retrofitting buildings, cutting greenhouse gas emissions and air quality standards.  And they want a bushel of tax cuts for businesses.  I’ll put the ransom note on the flip.

Aside from being ridiculous, this is extremely close to being illegal.  Yes, illegal.  I know horse-trading is customary in politics, but it violates California law.  This is Section 86 of the California Penal Code:

86.  Every Member of either house of the Legislature, or any member of the legislative body of a city, county, city and county, school district, or other special district, who asks, receives, or agrees to receive, any bribe, upon any understanding that his or her official vote, opinion, judgment, or action shall be influenced thereby, or shall give, in any particular manner, or upon any particular side of any question or matter upon which he or she may be required to act in his or her official capacity, or gives, or offers or promises to give, any official vote in consideration that another Member of the Legislature, or another member of the legislative body of a city, county, city and county, school district, or other special district shall give this vote either upon the same or another question, is punishable by imprisonment in the state prison for two, three, or four years and, in cases in which no bribe has been actually received, by a restitution fine of not less than two thousand dollars ($2,000) or not more than ten thousand dollars ($10,000) or, in cases in which a bribe was actually received, by a restitution fine of at least the actual amount of the bribe received or two thousand dollars ($2,000), whichever is greater, or any larger amount of not more than double the amount of any bribe received or ten thousand dollars ($10,000), whichever is greater.

Put it this way, there’s a Governor in Illinois who just got arrested for this activity.

But instead of indicting Mike Villines, he will be allowed to hold up the California Legislature, confident in the knowledge that Democrats, given little choice with the 2/3 requirement, will come around to his demands. In fact, Villines has already announced his intention to run for Senate in 2014, something that even cranky winger columnist Jim Boren scoffs at.  

Villines helped lead the Legislature to an 85-day budget stalemate and then was a party to passing a phony budget that quickly fell apart. And so far, he’s done nothing to solve the state budget crisis in the latest round of negotiations. And that’s the record he’ll run on for his next post?

Do our legislators live in a world where doing badly means you get to move up?

Yes, in a word.

And mind you, what Villines illegally lays out is just a precondition to TALK about revenue increases.

“This is very hard for Democrats to accept,” Villines said of his list, which he said he had been distributed to the governor and other legislative leaders. “They’ll say that look, ‘This goes right to the heart of many things that we care terribly about and we just can’t go there.’ I understand that because we feel the same way about revenues.”

Jim Evans, a spokesman for Senate President Pro Tem Darrell Steinberg, D-Sacramento, challenged the Republicans to “put a specific $17 billion, half cuts, half revenues, deficit-reduction plan on the table and then we can begin productive conversations.”

Villines is holding out hope Democrats will cave. “I think that they’ll ultimately come around to this,” he said.

Why wouldn’t he say that?  A criminal who never gets caught usually keeps robbing banks.  The learned behavior is that Democrats will give up at some point.  And with General Fund revenue down another $1.3 billion in November, and the state due to run out of cash in February, who is going to disagree with him?

Or, the real question is, will anyone arrest Mike Villines for crimes against the state?

UPDATE: Denise Ducheny, Senate Budget Committee chair, sez:

“To the extent they’re saying, ‘Undo all the labor laws and we’re still not voting for taxes,’ there’s kind of nothing to talk about,” Ducheny said.

The correct response is “I am directing the Sacramento police to arrest Mike Villines.”

UPDATE 2: Even the Sac Bee describes this as a hostage crisis:

In other words, Republicans are refusing to negotiate. They will only release the hostages after their demands are met.

REGULATORY CHANGES – EMPLOYMENT LAW FLEXIBILITY

Employee Schedule Flexibility

Expanding Health Care Options for Employees (Health savings accounts)

Reducing Unwarranted Litigation

Overtime for high way earners

Meal and Rest clarification

Eliminate “needs test” to allow more apprenticeships

REGULATORY CHANGES – BUSINESS DEVELOPMENT

Design-build

Public Private Partnership

ADA compliance

Streamline small business certification process for micro businesses and sole proprietorships

Reclassify “destination management companies” (DMS) as consumers rather than retailers (SB 1628)

Streamlining the permitting process (THPS, development)

Contracting out

ENVIRONMENTAL FLEXIBILITY

Expanding deadlines for engine retrofits (on and off road)

Extending deadlines for greenhouse gas regulations (AB 32

Carl Moyer program changes

Regulatory flexibility for agricultural industry

3rd party analysis of economic impact of ARB regulations

TAX CREDITS

A new employee tax credit for businesses that hire out-of-work Californians

A manufacturing investment credit to help businesses purchase the equipment they need

Capitol gains reduction for businesses that invest in California

Modification of the tax code to encourage companies to locate jobs in California

Suspension of regulatory burdens that “discourage job creation”

I want to publicly thank Jordan Rau and Patrick McGreevey for ripping off my “Scared Straight” moniker to describe yesterday’s joint legislative session.  This is par for the course with the traditional media creatively borrowing the work of bloggers without attribution.  Hey, at least our site didn’t send us into bankruptcy.

UPDATE: Mr. Rau, in a somewhat snippy but professional email, tells me he doesn’t read the site and the “Scared Straight” idea was independently his.  Fair enough.

As for the effectiveness of the “Scared Straight” session, which posited that all state infrastructure projects would be shuttered by the end of the year without a new budget, and that the state would be essentially out of money by February or March, and that doing nothing will make the problem substantially worse… well, let’s just say it could have gone better.

The Republicans, who attended reluctantly, refused to accept tax increases, instead emphasizing the importance of limiting state spending and ferreting out waste and bloat in existing programs.

“I didn’t see a lot of productive work there today,” said Senate minority leader Dave Cogdill (R-Modesto). “I think it was more about trying to heighten the intensity around this thing and push people to a place that they have been trying to push us to for a long time, and I don’t think it’s going to work.”

Sen. Dave Cox (R-Fair Oaks) held aloft two weighty yellow tomes produced by the last effort to trim state government — Schwarzenegger’s 2004 California Performance Review, which suggested 279 ways to save money by reorganizing the state bureaucracy. Almost none were adopted.

Look!  The answer is just holding up the performance review and shuffling around the bureaucracy!!!  Ahem…

In his comments, Mac Taylor, the Legislature’s nonpartisan fiscal analyst, described the folly of trying to close the gap either by taxes or through spending cuts alone. A tax-only solution would require increasing the sales tax by 2 cents, adding a 15% surcharge to the personal income tax and hiking corporate taxes by 2% — making all of those taxes the highest in the nation, he said.

Taylor said erasing the budget gap by cuts would require lawmakers to end all funding for the University of California and state universities, welfare grants, developmental health services, mental health and in-home supportive services.

It’s of course a red herring that Democrats are seeking a “tax-only” solution, one that Karen Bass sadly saw fit to perpetuate yesterday by stating “I think some of my colleagues on both sides of the aisle are living in denial, frankly.”  Um, every Democrat in the Legislature voted for a shared responsibility budget that raised revenue and implemented painful cuts.  If Bass doesn’t want to make the fight at all, she ought to let everyone know.  It’s not helpful to try and spread the blame equally.  We have a Yacht Party that has no intention of lifting a finger in the face of crisis.  In fact, they see it as their opportunity to drown government in the bathtub and eliminate the social safety net permanently.

This is why the state GOP is bordering on irrelevancy throughout the state (BTW, if you want to laugh, read Ron Nehring’s prescription for Republicans.  Clueless and pathetic).  Californians have thoroughly repudiated the Yacht Party vision.  However, this is true everywhere but in the legislative chamber in Sacramento, where the 2/3 budget and tax rule allows them to hijack the legislature.  In the long term, there is nothing to do but to capture a 2/3 majority and finish the irrelevancy project.  In the interim, California’s Democratic lawmakers are better off flying to Washington, DC, where at least they’ll have a chance of getting money for state and local governments in the new stimulus package, then staying in Sacramento, where they have no shot at breaking the stalemate.  That’s just reality.

Scared Straight didn’t work.  On to DC.

UPDATE: This is better from Karen Bass.  I’ll put the whole release on the flip, but she is, as she has been doing repeatedly throughout the crisis, calling for specific aid from DC.  A taste:

Meeting with California Congressional leaders and President-elect Obama’s transition staff, Assembly Speaker Karen Bass today outlined specific steps the federal government can take to boost California’s economy and ensure that the state can actually benefit from stimulus packages currently under discussion.

“Infrastructure investment is critical to getting the national and state economies back on track,” Bass said. “But the major spending cuts and tax increases that California and other states will need to balance our budgets could undermine the success of any infrastructure stimulus efforts. Today, I shared with Representative Barbara Lee from the Appropriations Committee and President-elect Obama’s transition office California’s  firm belief that direct federal assistance has to be part of an economic stimulus plan.”

more…

Bass was accompanied by Assemblymember Noreen Evans (D-Santa Rosa), Chair of the Assembly Budget Committee, who noted that California’s budget problems are directly linked to the revenue meltdown that followed the national recession and crises in the mortgage, credit and automotive sectors.

“We need federal aid because our troubled finances are the result of our nation’s economic downturn,” said Evans.  “$25 billion of our $28 billion deficit comes from a revenue drop after the October stock market crash.”

In their meetings Bass and Evans emphasized several specific avenues for potential federal aid:

Maximize California’s Federal Medicaid Assistance Percentage (FMAP). Although California has a large number of low-income and disabled individuals eligible for the program, we receive only the minimum 50% sharing ratio from the federal government.

Reauthorize the State Children’s Health Insurance Program (SCHIP). Most states, including California, are overspending their SCHIP allocation and have exhausted their prior year unspent allocations. Reauthorization by March 2009 is critical.

Increase Food Stamp Funding. In California, roughly 1.7 million people receive food stamp benefits. Increased funding means more food purchasing power for children, adults and senior citizens.

Further Extend Unemployment Insurance Benefits. With an 8.2% unemployment rate California would benefit from a further UI extension, improved UI coverage and increased administrative funding for states to deal with the increasing number of applicants.

Increase State Criminal Alien Assistance Program Funding. California spends approximately $1 billion per year to incarcerate an estimated 18,000 undocumented felons. However, for the fiscal year 2008-2009, the state will only receive $111 million in reimbursement from the federal government.

Increase Pell Grant Funding. The credit crisis has made it much more difficult for families to qualify for student loans, especially private loans. For FY 09, the estimated overall Pell Grant shortfall is $3.5 billion. Pell Grant funding should be increased to ensure that adequate funds are available for all eligible students.

Bass and Evans also stressed the need for infrastructure investments as part of federal stimulus packages, including investment in transportation, housing, flood control and green technologies:

Transportation:  Funding for California’s highways, transit systems, passenger rail and goods movements projects.

Housing: Housing construction related activities, foreclosure prevention and mitigation and housing market improvement policies.

Clean and Green Economic Sector: The economic stimulus infrastructure program should provide funding to help California achieve our renewal portfolio standard (RPS) goals through the siting, planning, and building of transmission lines, as well as funding for green job training programs for displaced workers, at-risk youth and veterans.

Flood Control Projects: California is eligible to receive $15M for flood control feasibility studies and over $112M for flood control projects. Federal funding should be provided for these important public safety projects.

“California stakeholders, including the legislature, the governor, city and county governments and other interested parties, are coming together to develop a list of projects and priorities for immediate federal infrastructure stimulus,” Bass said. “It is in the state’s best interest to speak with a united voice wherever possible in this process, so it’s important to have the stakeholders develop and vet such a list before making the case for individual projects.”

Bass added that the Assembly also intends to work closely with its Congressional partners as reauthorization of the Transportation Act approaches. Because reauthorization has such a potential impact on California and its economy, Speaker Bass will appoint a special Assembly Working Group in 2009 to help advance California’s interests throughout the reauthorization process.

Dan Walters and Jon Ortiz from the Sacramento Bee are going to liveblog the joint session of the legislature helmed by Treasurer Lockyer and Controller Chiang today, coming up at around 3:00 PT.  Today we got a sense of what will be said in that session.

Treasurer Bill Lockyer, for instance, will tell lawmakers that unless a budget is adopted the state will stop financing construction projects for roads and other infrastructure. That’s not just bond sales for future projects — those will stop, too. It means projects that are underway will no longer be able to draw down cash from the treasurer’s pooled account as the state’s general fund moves toward insolvency. Thousands of jobs could be lost.

“No budget, no state financing,” said Lockyer spokesman Tom Dresslar. “The spigot is completely off. We’re talking about a complete shut-off of state infrastructure financing unless we get a budget fast.”

This is the exact opposite of what we should be doing, of course, and the exact opposite of what the President-elect wants to use as a means to kick-start the economy – massive spending on shovel-ready infrastructure projects.  But California does not, in the current context, have the money to support it.  In fact, we could be out of cash by February:

California is on track to run out of cash in February or March and faces a $15 billion cash shortage by the end of its fiscal year in June unless officials plug an $11.2 billion budget gap, according to the state’s budget director.

Additionally, if Gov. Arnold Schwarzenegger and lawmakers fail to close the current fiscal year’s budget shortfall soon, California, the most populous U.S. state, may in March delay payments to its vendors or hand them notes promising payment, according to a Dec. 1 letter to top lawmakers from the director of the Department of Finance, Michael Genest.

A copy of the letter was obtained on Friday by Reuters.

“Specifically, it now appears certain that available cash reserves from all sources will fall below the cash cushion target of $2.5 billion in February and that the state will begin delaying payments or paying in registered warrants in March,” Genest said in his letter.

That would be IOUs.  From the 8th-largest economy in the world.

Like I said last Friday, this should be a “Scared Straight” kind of presentation, only I don’t see how the Yacht Party members would be scared.  What’s being offered, a government shutdown, is basically their greatest dream realized.  And it’s not like there’s leadership at the top of their party to force any compliance – Arnold Schwarzenegger is too busy pretending he’s the world’s go-to source on global warming and trying to buddy up to Darrell Steinberg instead of making any effort to get members of his own party to stop hijacking the state.

If you’re a masochist, check out the liveblog at 3.

This could be just to get the freshman members of the legislature up to speed, but it sounds rather… serious.

The entire Legislature will meet in a joint session Monday in the Assembly chambers to discuss the state’s cash situation and overall budget dynamics with state fiscal leaders, according to Jim Evans, spokesman for Senate President Pro Tem Darrell Steinberg.

In a rare Budget 101 session, Treasurer Bill Lockyer, Controller John Chiang, Department of Finance Director Mike Genest and Legislative Analyst Mac Taylor will describe the consequences of delaying a compromise over the budget. They’re likely to discuss the possibility of issuing IOUs to state vendors and state workers, as well as layoff scenarios and other consequences.

If I had to guess, this will be one of those meetings where everyone is sat down and told that this is what they have to do or the state will fall into the ocean.  They should get some veterans from Scared Straight to run it.  Put the fear of God into these lawmakers.

Although, I can’t say whether or not it’ll be successful.  I mean, the Governor has already called a state of emergency and that didn’t shake anybody up.  Mike Villines is still sounding like a Yacht Party regular on budget issues:

Republican Assembly Leader Mike Villines (R-Clovis) took a dim view of a Democratic proposal to take reducing the threshold to pass a state budget to the voters.

Calling the proposed bill, which would ask voters to make a simple majority all that’s necessary for passing a budget, a Democratic power grab, Villines said doing so was a duck on responsibly addressing the state’s budget woes.

“Shutting Republicans out of the budget process will just make it easier for Democrats to pass more of the same reckless spending measures that have resulted in our current fiscal crisis.” Villines said in a statement released late Wednesday.”This will do nothing to improve our long-term budget picture, and will actually make things much worse.”

He still wants a spending cap, of course.

But Lockyer and Chiang have plenty of ammunition to throw around.  Failing a bailout from the Feds (which I think is a better bet at this point), state workers are about to be laid off or have their salaries frozen, and cuts to popular professions like teachers and nurses and cops and firefighters would be on the horizon in a protracted delay.  Whether or not this threat of potentially hundreds of thousands of angry Californians and their families marching in the streets (Lockyer and Chiang need to have a flair for DRAMA in this speech) is enough to overrule the Iron Law of Institutions remains to be seen.

On the first day of the legislative session there was an irrational burst of optimism that the roadblocks put forward by the Yacht Party on the budget and taxation would somehow be hurdled.  It’s true that Democrats have three more seats in the Assembly (though currently one less in the Senate, pending the filling of Mark Ridley-Thomas’ vacant seat), lowering the amount of Yacht Party members they’d have to bring aboard for any solution.  But the idea that these new Republicans represent any kind of fresh thinking or newfound moderation is a fantasy.

Though Democrats picked up an aggregate of three seats in the Assembly, Niello said, they still need at least three Republicans to cross over and vote for any legislation that requires a two-thirds vote, such as a state budget.

Because the GOP caucus is united around opposition to any new taxes and wanting to see reforms such as a state spending cap and improving the state’s regulatory environment on businesses, Niello said, Democrats will have to give to get any of those crossover votes.

“We’re still solid, still firm on the things that are priorities,” Niello said.

Newly sworn-in Assemblyman Dan Logue (R-Linda) sounded a similar note.

“We’ve got to create wealth, and we’ve got to grow our way out of trouble, not tax our way out of trouble,” Logue said. “Raising taxes will drive more jobs to Nevada.”

Some of this could be bravado, and there are a couple legislators who were in close races – Steve Knight in AD-36, Bill Berryhill in AD-36, Tony Strickland in SD-19 – who would, in theory, do well to part ways with ideology and compromise to enhance their chances in the next election.  But this would contradict the Iron Law of Institutions – “the people who control institutions care first and foremost about their power within the institution rather than the power of the institution itself.”  Republicans who give in on the budget will be primaried and feel far more fear from that internal challenge than from the opposition.

The only way to counteract this is to make the challenge from without more vital than the challenge from within, and to make the power inside the institution line up with the power of the institution.  It means getting 2/3 and making anyone who rejects the will of the people pay.  SEIU has the right idea with their new ad campaign about the budget, playing off of Obama’s popularity in the state, and John Burton’s curt response to Yacht Party efforts to roll back labor and environmental regulations as payment for a budget solution – “The Republicans are full of crap” – ought to be said a bit more often, maybe in less colorful language, to make clear who is causing this crisis.  

I’m not sure any of it will be enough, though.  The Yacht Party is still the Yacht Party.

We figured that when Darrell Steinberg assumed the leadership post in the Senate, there would be less accommodation and more risk-taking from the Democratic caucus.  Well, this potential deal floated in today’s LA Times would certainly fit that description.

State lawmakers began moving toward a deal this week to close California’s deficit with the help of steeper car fees that would cost many drivers hundreds of dollars annually, according to people involved in budget talks.

Under the plan, GOP lawmakers — most of whom have signed anti-tax pledges — would vote to triple the vehicle license fee that owners pay when they register their cars every year in exchange for a ballot measure that would impose rigid limits on future state spending. Motorists’ annual license fees would rise from 0.65% of the value of their vehicles to 2%. For a car or truck valued at $25,000, the increase would be $336.

The higher fees would generate $6 billion annually, helping to fill a budget gap that is projected to reach nearly $28 billion over the next year and a half.

The proposal is being championed by incoming state Senate leader Darrell Steinberg (D-Sacramento). Democrats and advocates for the poor have opposed strict state spending limits, saying they would cripple government services.

Steinberg may be gambling that voters would reject the limits, as they have in the past.

This would be a simple restoration of the VLF to the levels put in place by Pete Wilson (yes, Wilson; the increase, which was meant to occur during poor economic times, only triggered under Gray Davis).  It is not a progressive version or a “feebate,” and it does not increase for higher emission-producing cars and trucks.  So it’s not the best way to restore the VLF, in my view.

And the exchange, a ballot measure to restrict state spending, is a long-sought Yacht Party agenda item.  I’m guessing it would be substantially similar to the version voted down in 2005.  A spending cap is simply a way to ratchet down government and eliminate needed services which the public has said time and again they not only want, but are willing to pay for.

I understand Steinberg’s reasoning on two levels:

(1) It’s probably correct that Democrats and unions would fight like hell to stop a ballot measure with a spending cap.  These are tough economic times, however, and they’re projected to continue in the near future, so cutting spending may look more attractive to voters.

(2) This would be a stake through the heart of Yacht Party rhetoric about taxes.  You can see the effect of what this would do by just listening to talk radio:

Prospects for the plan, however, immediately began to dim after details were published on the Los Angeles Times website. Angry phone calls from constituents, advocacy groups and talk radio hosts prompted lawmakers to publicly distance themselves from the proposal.

I mean, this came out on the same day when Senate leader Dave Cogdill wrote an op-ed entitled Cut, Don’t Tax.  And Arnold Schwarzenegger made cutting the VLF the signature piece of policy in his platform in the 2003 recall election.  For him to reverse it just 5 years later would be humiliating.

Ultimately, Republicans are probably too spineless to agree to this – they’d fear primary elections in 2010, although directly after an election would probably be the best time to pull this off, with the most distance between now and the next election.  But Democrats should think hard about this as well.  Is it really worth having to fight a ballot measure that would cripple the state?  It may well be, especially considering there’s probably no other way to raise needed revenue.

It’s quite a gamble.