John Garamendi has been seeking votes in California for well over 30 years.  He first took a run for the Governor’s mansion in 1982, and was set to do so again in 2010 until the seat in CA-10 opened up, and he was inspired to return to Washington, where he served in the Clinton Administration in the Department of the Interior.  He has the most diverse record of anybody in the race, with stints at the federal level, the state legislature, and in two statewide offices, as the Insurance Commissioner and now Lieutenant Governor.  In our interview, we discussed health care, lessons learned from regulating insurance, No Child Left Behind, saving the NUMMI plant in Fremont (more on that from Garamendi here), and foreign policy in Iran.  I found Garamendi to come at issues in a very comprehensive and thoughtful way, and you can see this for yourself below.  A paraphrased transcript follows. (flip it)

DD: Thanks for talking with me today.

John Garamendi: My pleasure.

DD: So how’s it going out there on the campaign trail?

JG: It’s going very well.  Every day, I feel we’re moving along well.  You have everything being done that is normally done in these campaigns.  We have a strong volunteer grassroots organization committed to getting out the vote.  Phonebanking has started, we’ve hit about 30-40 thousand homes.  We’re walking in different communities.  We just had a meeting in Rossmore, with 300 people turning out.  So I think it’s going very well.

DD: Your last several campaigns have been statewide, with district-level campaigning being more retail, how are you finding it?

JG: To me, it’s exactly the same, only it’s done in a smaller area.  I’ve always believed strongly in retail politics.  The only difference is that after the event’s over, I don’t have to get on a Southwest Airlines plane.  We did an African-American church out in Fairfield over the weekend, same as any African-American church in Southern California or anywhere else.  It’s just easier for travel.

DD: OK, let’s hit some issues.  First off, health care.  August is this time where everyone’s making their feelings known about health care in their districts.  What are you hearing in yours?

JG: I am hearing a strong element for single payer, or Medicare for All.  As you may know, I’ve led that debate in this state for many, many years.  I’ve always found it the most efficient, most cost-effective way you can possibly do this.  Just send your premiums to the Medicare office.

So I hear a lot of individuals trending in that direction.  And some of the unions, the California Nurses Association, are also trending in that direction.  There is also a concern about the complexity of the legislation moving through Congress.  And people want to see at the very least a public option to compete with the insurance companies.  Also, with a lot of seniors, the drug issues concern them, both with fixing some of the issues with Medicare Part D and also maintaining what they like about Medicare.  So that’s the range.

DD: Would you vote for any bill that didn’t have at the least a public option that’s available from day one, without a trigger?

JG: Well, I’ve always been a strong voice for Medicare for All.  The fallback position is the public option.  That’s already a compromise.  And so the legislation had to have a public option, I can’t go any further away from that.  The other thing I want to express is that I understand insurance reform, which is a lot of this bill.  I was the main regulator for insurance companies in the largest state in the union.  So I bring a set of knowledge to this debate that not only doesn’t exist among my competitors, but doesn’t exist in Congress.

DD: Let’s talk about that.  Right now, insurance companies are regulated in the states, and so the regulations vary from one place to the next, and can be corrupted by local interests.  Do you support a federal role in insurance regulation?

JG: This is something that we have to figure out with insurance reform and with respect to financial regulation.  The regulatory mechanisms need some clarity.  It simply won’t work to write a law saying to the insurance companies, “Take all comers.”  They will not do it.  So you need a police force.  Someone to enforce that law.  Will that be federal, or based where it is now, at the state level?  That’s the kind of detail that must be worked out.  I mean, we’ve had auto insurance here in California that’s supposed to take all comers, and they find numerous ways to avoid that.  And of course, this is why I support Medicare for All.  You don’t have to worry about any of that.  But as long as we’re going with health insurance reform, I can add something to that process.

DD: What are the pluses and minuses of putting this in the hands of the Feds?

JG: If it’s a federal process, you’d have to set up a massive new federal bureaucracy.  In the positive sense.  But you have to have a police force, because otherwise, the insurers won’t do it.  That’s a major, expensive undertaking for the federal government.  There’s an advantage to the existing mechanism in that it already exists, like with Medicare or Medicaid.  However, you mentioned some of the problems with how the regulation changes depending on the state.  So both options have shortcomings.  Either way, if we have a bill based on insurance reform, it has to be dealt with.  And I’ve been dealing with these companies for eight years of my life.  I know how to do this.

DD: Medicare for All will apparently get a vote now.  Is that helpful?

JG: It’s enormously helpful.  It got pushed to the side of the debate for too long.  Medicare provides about 60% of the care in dollar terms already in this country, and it’s very popular.  If you bring the rest of the population in, on a per-person basis, the cost would decline dramatically.  The money in the private system is good enough to get this done and cover everybody.  And the other important thing is that Medicare allows individual choice of provider.  Whatever doctor you like, you can keep them.  Of course, we know that private insurance restricts your choice of doctor.  So this is the big lie in this debate, the idea that Medicare would have government telling you what doctor to pick.  That’s what happens right now.

DD: Let’s move on.  I noticed on your website you took a lot of time talking about the need to rebuild manufacturing.  We’re seeing this cash for clunkers program becoming very successful as an economic stimulus for the auto industry.  Is that the kind of incentive-based programs that we can use to bring back manufacturing to America?

JG: Not exactly.  The auto industry is not central, but it is important.  That’s why I’m trying to save the NUMMI plant.  1,200 businesses are direct suppliers to NUMMI.  The auto supply industry is one of the largest in America.  So cash for clunkers will help NUMMI.  But what I’m talking about with respect to manufacturing is an economic theory that I developed in the 1980s.  Basically, I figured that you need certain things to maintain the ability to lead as an economic power.  You need a world-class education system and a commitment to research and development.  Through both of those, you can create new things, with a high profit margin, whatever those things are, but new innovations that people find valuable.  Eventually, those new things become a commodity, and once that happens, like all commodities, it seeks the lowest-wage place to be made.  So those things get pushed off, and you have to create more new things, to keep feeding that engine.  So that’s what I’m talking about, high-end manufacturing.

DD: Couldn’t the NUMMI plant be retooled to serve as a place to manufacture those new things, be they innovations in solar or wind technology or new batteries?

JG: Well, we tried this a few years back.  I endorsed a bill in the legislature to provide a specific exemption for sales tax on manufacturing equipment to retool the NUMMI plant for hybrid vehicles.  And that probably would have been enough to keep NUMMI open.  But it didn’t pass.  Right now, what we’re doing is putting together a package for NUMMI of incentives that will hopefully keep them in California.  But it’s more complex than that.  This is like a divorce.  You have GM and Toyota fighting over who owns what widget on the line.  So there are legal issues in play now.  I think we can get it done, because that’s a very efficient plant, one of the most efficient in the country.  But we have to manage this divorce.

DD: Education is another issue you talk about a lot.  The Department of Education just put out this Race to the Top program to offer money to the states with good outcomes, but they are restricting the funds to states which incorporate student testing into teacher evaluations, and because California doesn’t do that, they don’t qualify.  What are your thoughts on that, and this larger divide between education reformers and groups resisting their reforms?

JG: My question about it is basically, what is the equation between the test and teacher evaluations? Are we talking about just the test score? In that case, do I get to choose the students? Because the students and their backgrounds are a contributing factor to their performance. So it’s a complex equation. There’s a socioeconomic element to it. And it’s very difficult to do to take everything into account. I don’t think that testing should be the sole measure of a teacher evaluation. There are multiple factors. My daughter’s a kindergarten teacher, and this year she got to school and there were a lot more kids in her class. So is that a factor? I think we need to evaluate teachers, but we must be fair.

DD: Do you support a reform like paying teachers more to go into poor-performing inner city areas?

JG: I’ve always supported reforms like that. I put up a bill in the 1980s to pay more to math and science teachers, to make sure we were attracting the best of them. And I support sending good teachers into the inner city. We have to pay our teachers better if we want to get the best outcomes.

DD: We are having such a tough time in California, what can the federal government do to alleviate some of the burden here where we are destroying our social safety net during a deep recession?

JG: Well, just to go back to education, one thing the federal government can do is fix No Child Left Behind. It was a great concept, but not good in detail. The reauthorization is coming up, and the Feds had better fund it. You can’t place a burden like that on the states and expect them to deliver. So funding, and some reform of the law, has to get done. I don’t think testing should be the only evaluation of students. There’s a place for it, but we’re building a nation of robots by teaching to the test. I have significant concerns about No Child Left Behind that need to be addressed.

DD: What about beyond that. Would you support a second stimulus focused on the states?

JG: I don’t know whether there will be a second stimulus. But the problem is pretty elemental. California is the 7th, 8th-wealthiest place on Earth. We have made a decision, and it was a decision, not to invest in education. We have plenty of money to fund it, but we made the decision not to. The leadership has refused to use that wealth in the greatest resource we have, and that’s our education system. It’s clear to me that the federal government cannot substitute for the effort that California must make for themselves. We need investment, coupled with serious reform, to break the gridlock. Voting to tax students by raising college rates is just insanity. And the regents and trustees refused to support legislation for an oil severance tax to fund higher education. I brought it to them, and they wouldn’t support it. We are the only oil producing state with no tax on the natural resources coming out of our ground. The oil companies have been able to take it for free for over a century. It’s madness.

So the federal government cannot substitute for California. But I’ll fight to bring money back to the state. First by funding No Child Left Behind. And also, there’s the issue of medical services. The formula for state participation in Medicaid in California is 50-50, an even split between the Feds and the state. In other big states, that ratio is different. In Illinois, New York, it’s more like 60-40, 70-30. Getting a better split in that formula represents a huge amount of money for California. And there are numerous formulas like that. So experience counts in understanding all that.

DD: OK, final question. On your website, I noticed very strong language supporting Israel, and also warning Iran not to continue with their alleged nuclear program. And you advocate for stopping shipments of refined oil to Iran if they refuse to cooperate. Now, I’m assuming that was written before the most recent uprising.

JG: It was, yes.

DD: Do you still believe, given the events over there, that it’s a good idea to stop refined oil shipments, when it may hurt not the regime, but the very people in the streets who are resisting it?

JG: There’s no doubt that the effect of an embargo would hit the economy and the people. That’s what it’s designed to do. I’ve thought long and hard about this, after watching the events take place, and I still believe in the concept. What you have over there is the current government’s legitimacy being questioned. Does that mean they are more willing to negotiate on the nuclear program, to bring something tangible to the people? We don’t know. So I think you have to pull together the interested groups, and that’s Europe, and Russia, Pakistan, the Arab states, they might be more interested than us. And you create a larger coalition to change the behavior of the government. The uprising actually helps in that regard. And like in any negotiation, you have to have a big stick. So I would not drop the embargo possibility. And again, all of this is down the road a piece. Now another big stick would be bombing their facilities, and I think there are some unadvisable consequences to that. So I’d rather use the other stick.

DD: Thanks so much for talking to me today.

JG: Thank you.

UPDATE by Brian: I’ve attached a  summary of the Budget Committee’s bill over the flip.  

The plot thickens.  The Governor today threatened to veto the work of the bipartisan Budget Conference Committee and reject any bill that, essentially, doesn’t hew to his desire to destroy the social safety net of the state.  The Democratic leadership countered that they’ll pass the bill anyway.

Democratic legislative leaders vowed today that the Legislature will pass a “share the pain” budget-balancing plan early next week – with or without tax increases — that will close the state’s spending deficit without completely shredding California’s social services safety net.

The vows by Senate President Darrell Steinberg, D-Sacramento, and Assembly Speaker Karen Bass, D-Los Angeles, came about an hour after Gov. Arnold Schwarzenegger said he wouldn’t sign a plan that was balanced with tax increases.

The rhetorical staking out of ground by the key figures in the current version of the state’s ongoing fiscal melodrama came a day after the Legislature’s joint budget conference committee, on a party-line vote, adopted a plan that included about $2 billion in new oil production and cigarette taxes to help bridge a $24 billion budget gap.

Let’s take a brief look at what else the conference committee has done.  They resisted some of the worst health care cuts, including the total elimination of Healthy Families (the SCHIP program).  They reduced education spending significantly in both K-12 and higher ed.  They reduced corrections spending by a fairly large amount.  Despite the fact that state parks pay for themselves, Democrats agreed to cut state participation in park funding, replacing it with additional fees on park admissions.  They agreed to increasing withholding by 10%, which amounts to an interest-free loans from citizens to the state.  According to Karen Bass, they agreed to 45% of the Governor’s proposals in full, and 93% in part.

So the idea that Democrats are not cutting spending is simply unreasonable and wrong.  At the same time, they rejected additional cuts to state worker salaries.  They rejected the end of Cal Works or Cal Grants or In-Home Support Services.  And some of the Governor’s proposals, like borrowing from local governments, were rejected unanimously.

I don’t even much like what the Democrats came up with.  But they did not agree to completely wipe out the social safety net, calling for moderate increases in revenue on constituencies who have been getting away with murder, pretty much literally, for decades, to pay for the externalities in health care costs that they impose on the public.  As Noreen Evans explains:

Californians expect their schools to be good, a safety net to be available to the needy, a college education to be affordable for working families, their air and water to be clean, and their parks to be open and kept up. In order to meet their expectations, we must to pursue new revenues. Today, for the greater good, we approved two new tax proposals that won’t impact most Californians.

Establishing a 9.9 percent tax on oil extracted from California would generate $830 million in FY 2009-2010 and $1.1 billion in future years. This precise proposal was part of the governor’s budget proposals last year. Increasing the excise tax on cigarettes by $1.50 per pack generates $1 billion in FY 2009-2010.

Tax increases require a 2/3 vote. Absent the pursuit of new revenues, wider and deeper cuts will be required. Getting new revenues requires a mere 6 Republican votes: 2 in the Senate and 4 in the Assembly. It is undemocratic that the votes of 6 Republicans can veto the votes of 75 Democrats.

But Arnold wants to destroy the state of California like a good little neo-Hooverist, so he said no.

The Dem leadership appears to want to have this fight for the moment, so they ought to realize one thing: Arnold will ultimately be responsible – and reviled – in a government shutdown situation.  No question about it.  Not 1 in 10 Californians can even NAME a Democrat in the legislature.  If the ship sinks, Arnold will be perceived as the skipper.  And so, if and when Arnold vetoes the bill, the Democrats should send it back – with MORE tax fairness solutions, daring Arnold to prolong the agony.  That resets the battle and draws clear lines between those who want the richest companies in America to sacrifice along with ordinary Californians, and those who want to protect the rich completely.  Unfortunately, the Dems are tipping their hand that this will not be the case.

But Bass and Steinberg seemed to be reconciled to the likelihood that the tax hike proposals would fail next week. Steinberg said that if they did, the package they sent the governor would have a reserve $2 billion smaller than he had sought.

We have a couple days to change this dynamic.  The progressive movement around the budget has stiffened spines a bit so far.  Time to make the calls and emails.

This is funny:

Schwarzenegger added that he wants a budget plan that will bridge the entire projected deficit of $24 billion, not a stopgap measure to “kick the can down the alley.”

The plan must consist of permanent solutions to the state’s fiscal problems, not one-time revenue that sparks ongoing spending commitments, Schwarzenegger said.

When Schwarzenegger was reminded that his own budget plan contains some one-time revenue proposals, such as acceleration of income tax payments, he smiled.

“Very good point,” he said. “We don’t want to add to the problem.”

The cyborg is not running on all cylinders.  He has a single-minded purpose to kill the California dream and even these extremely moderate revenue enhancements.

June 16 2009 Conference Report – Get more Business Documents  

As Brian noted, in the full list of the Governor’s slash and burn budget, the offshore drilling proposal in Tranquillon Ridge off the Santa Barbara coast remains.  After a key environmental group backed away from the plan, which originally was structured as a compromise proposal to allow an additional rig in exchange for ending all drilling in the channel by 2022 (which the Lands Commission determined was unenforceable), many expected the plan to be scrapped.  But it remains, despite the fact that the California Lands Commission spoke out yesterday, calling on the legislature to put a stop to this power grab.

The State Lands Commission on Monday lashed out at an attempt by Gov. Arnold Schwarzenegger to allow the first new oil drilling in California waters since 1969.

Lt. Gov. John Garamendi, chairman of the three-member panel, called the governor’s effort “a naked power grab.” At a contentious hearing in Santa Monica, the commission passed a resolution urging legislators not to go along with the plan, which would revive a drilling proposal off the Santa Barbara County coast that the commission killed in January.

The Commission doesn’t out-and-out call this illegal.  But they hold jurisdiction over oil drilling, and the Governor is simply trying to go over their heads.  You can basically shut down the California Lands Commission if this goes through, because they will be rendered impotent.

And of course, while the Administration foregrounds the $2 billion dollars to be gained from allowing the leases in Tranquillon, he does not make a peep about charging an oil severance tax, to actually make the oil companies pay to take California’s natural resources out of the ground.