Robert Cruickshank pretty well covers the disaster that will be the upcoming budget “deal” between legislative Democrats and Arnold Schwarzenegger.  By the way, this is BEFORE the Yacht Party tries to enact a few more goodies for the privilege of letting Democrats vote for $26 billion in cuts, gimmicks and raids on local government.  We’ll see a big sigh of relief from lawmakers over the next few days that will be wholly unwarranted.

Particularly galling is the targeting of city and county budgets to cover the state gap.  By siphoning off almost $1 billion in gas tax funds slated for cities and counties, not one pothole in California will get filled this year.  With the loss of $1.7 billion in redevlopment funds, not one project like affordable housing will get initiated.  And by taking $1.3 billion in local property taxes, lots of city and county employees, particularly in public safety, will end up out of work.  It’s really robbery on a pretty grand scale, and it will offset any economic recovery through stimulus funding throughout the state.

One of the major consequences of this cuts-only budget will be, paradoxically, higher costs for individuals and the state.  When you eliminate or severely restrict social services programs, those individuals who rely on them will have to go elsewhere for those services.  The alternatives are more expensive for everyone.

Irene Steinlage has trouble walking, getting dressed, making her bed, taking a bath. She has stayed in her Folsom home with the help of a health aide, one that Gov. Arnold Schwarzenegger says the state can no longer afford.

The governor’s plan to take away such care is meant to save money. But it could end up costing California more by forcing the 85-year-old, who has Parkinson’s, osteoporosis and other ailments — and thousands like her — into nursing homes.

“I couldn’t possibly afford a nursing home,” Steinlage said. So the state could be saddled with a Medi-Cal tab that is triple the cost of her home care worker, who receives $10.40 an hour five days a week […]

Others say the experience of governments that have closed gaping deficits with deep program cuts suggests that the price of doing so is hefty.

“It’s pay now or pay later,” said Nicholas Freudenberg, who co-wrote a study of the long-term effects of service reductions made in the aftermath of New York City’s fiscal crisis of 1975.

His 2006 study, published in the American Journal of Public Health, found that less than $10 billion in cuts to healthcare, education and law enforcement in New York City over four years led to at least $54 billion in additional costs over a 20-year period, using 2004 dollars and adjusted for inflation. Consequences included higher rates of HIV, a worsened tuberculosis epidemic and a spike in homicides.

“Those potential epidemics that are being seeded by Gov. Schwarzenegger’s cuts will not come in his term or the terms of people who are making these decisions,” Freudenberg said. “It will be several years down the line.”

The sick thing is that the Governor, and maybe even some in the Yacht Party, know this.  The consequences of program cuts are easily seen.  Eliminating the Poison Control System, for example, means that people calling the emergency number (many of whom don’t need to see a doctor based on poison accidentally swallowed) will instead go to the ER, and many of those visits will be from people on Medi-Cal, leading to higher costs.  Cutting adult day care will send many into nursing homes, at a higher cost to the state.  Losing Cal Works welfare funding will send children into foster care, at a higher cost.  Cutting the meager drug treatment and vocational training in prisons almost assures an even higher recidivism rate, at a higher cost.

This is not a difficult calculation to make.  We fund social services programs not only because we have an obligation in a developed society not to see people dying on the street, but because we can create programs that get people back to self-sufficiency at a lower overall cost.  There is only one reason not to fund such programs – because an arrogant and entitled right wing refuses to fund these government obligations in the short term, preferring apparently to pay more in the long term.  There has been enough money in the last few budgets to produce massive corporate tax cuts, but not enough to get someone with a chemical dependency the treatment he or she needs.  There’s been enough money to protect California’s unique status as the only oil-producing state not to charge corporations for taking our natural resources out of the ground, but not enough to provide long-term care services that relieve the burden of nursing home funding over the long term.  There’s enough money to keep in place useless enterprise zones that create nothing but tax giveaways, but not enough to keep the state from becoming the first in the nation to put poor kids on a waiting list for affordable health insurance.

We hear about the “generous social services programs” in California that simply had to be cut, but they’ve been reduced to the point where they are almost unanimously the worst in the nation.  That depresses the business climate, that moves bodies out of the state, that alienates the public.  And Arnold Schwarzenegger knows this, and he did it anyway, to keep a promise to what little of his base he has left.

Ultimately, this system isn’t designed to produce good budgets.  Without a media that cares, no amount of activism or public pressure can be brought to bear on a shameless and unaccountable minority.  If you need proof of the need for a complete rethinking of how to structure government in California in the 21st century, look at the last seven months.

As the Governor has tried to hijack the budget crisis to serve his own ends of punishing union workers and shredding the social services net, over the last couple days we’ve seen Democrats fighting back.  For example, Dean Florez surgically took apart the Governor’s idiotic smear attempt on legislators for doing their job of legislation.  Considering that the Governor has never invited all 120 lawmakers into his smoking tent for a pow-wow, I think there’s room for multitasking here.  But understanding that would involve basic knowledge about how government works, as Florez said:

Assembly bill 606 creates a commission to serve the marketing interests of the blueberry industry. Another bill defines “honey” to mean the natural food product resulting from the harvest of nectar by honey bees, and a third bill adopts regulations establishing definitions and standards for 100-percent pomegranate juice.

“Look, we’re pro-condiment, we’re pro-fruit, but the focus needs to be on the budget crisis,” McLear said.

Senate Majority Leader Dean Florez (D-Fresno) called Governor Schwarzenegger’s criticism “childish” and said he is fed up.

“The governor’s turned from an action hero into just another politician,” Senator Florez said. “He should really, really take a course on fundamental government on how the legislature works.”

“The fact that he doesn’t understand these things worries me,” he added.

Asm. Nancy Skinner held a press event with small business owners, again using the imagery of Arnold Antionette smoking a stogie in his Jacuzzi to contrast with the state’s struggles:

Skinner called a news conference at the corner of Solano Avenue and The Alameda in Berkeley, outside the vacant storefront formerly occupied by A Child’s Place. Near her podium was a poster of Arnold Schwarzenegger with a cigar in his mouth, with the headline “While the state drowns in IOUs ARNOLD DOESN’T CARE” and featuring a quotation from this past Sunday’s New York Times Magazine article on the governor’s method of coping with the stress of the budget crisis: “I will sit down in my Jacuzzi tonight. I’m going to lay back with a stogie.”

Skinner said that’s pretty cheeky talk for a governor who nixed bills that would’ve helped solve the state’s cash crisis, avoided the need for the IOUs now going out and kept the deficit from growing by another several billion dollars. And it’s particularly distasteful, she said, to small businesses that are struggling through this recession even as Schwarzenegger proudly talks about vetoing a plan to collect sales tax from large online retailers doing business through California-based affiliates.

You can debate AB 178, the plan to collect sales tax on affiliate sales (I don’t sell enough in affiliate sales to have much skin in the game, but there are decent arguments on both sides), but aligning with small business to attack a supposedly business-friendly Governor has good optics.

For the wonks, the Assembly produced an analysis of the Governor’s so-called “reform” agenda, showing that most of it would be completely irrelevant to the current budget year, and all of it uses math that magically eliminates implementation costs but assumes outrageously oversized savings years down the road.  These are cuts to social services pretending to be reform.  I guess it’s a step up from completely eliminating programs like CalWorks, but it’s fundamentally dishonest.

Moments after the Governor’s press conference yesterday about CalWorks “reform” (fact-checked here by the CBP), welfare advocates held their own press event that made most of the news items:

“I’ve never liked when people pick on the poor because they haven’t got the ability to fight back,” said John Burton, the state Democratic Party chairman and former Senate leader known as a fierce advocate for the poor. “It’s a Republican syndrome. It isn’t tough for Republicans to beat up on poor people. When finances are terrible, they go after the poor and blame the poor. Republicans constantly use that and don’t worry about all the benefits government gives to businesses.” […]

Welfare advocates countered that nearly two-thirds of recipients are working or participating in training, and that half are making some kind of income. They also said that the governor’s own May revised budget proposal estimated an annual savings of $100 million with that reform.

“He’s reinforcing negative stereotypes and scapegoating people for the failure of his own administration,” said Frank Mecca, executive director of the County Welfare Directors Association of California. “It’s a reflection of a bully mentality, to go after the problems of struggling families when he doesn’t get his way. The last thing those families need is to have a powerful figure accuse them of fraud, of not trying.”

Furthermore, the CA Democratic Party has collected budget horror stories to highlight the human cost of the crisis.  Here’s one picked at random:

I am on Social Security Disability and with the amounts allowed to get SSI having been cut, it has also cut my income. Also, my medical coverage is being hit as well as so many of the social programs all of us depend on. Fortunately, I am not homeless yet, but it is a good possibility. I just do not understand how you could make all Californians suffer, especially those of us who are very low income, in favor of giving a huge tax break to oil and tobacco. This is not just or right and I believe that the solution is to sign the compromise bill, and tax the big corporations that are not now paying their fair share! – Christine, Victorville

The structural barriers in the state are so high that I’m not sure any of this can work.  One thing is certain, however – this aggressive strategy creates energy in the grassroots, inspires changes to the system and can leverage public opinion far better than desperately seeking some compromise behind closed doors.

As the budget talks stall, let’s bore in on what new items the Governor has recently proposed.  Out of nowhere last week, he called for policy changes as a condition for agreeing to covering the full budget deficit.  He can call them budget-related, or part of the “reform” agenda, but that’s a lie.  He added new issues into the negotiations, and Karen Bass was right to call him out for it.

Among those new items was this call to “root out fraud” in several programs, including IHSS, Cal-Works and Medi-Cal.  The Governor claims that implementing programs to end this fraud would save the state $500 million dollars a year – meaning it would take 14-16 years for this program fix to cover the wasted money caused by his intransigence in refusing the stop-gap fix last week, which lead to the issuance of IOUs.  On top of that, those numbers are overstated, and changing eligibility standards is a complex, costly process that will neither improve customer service or even reduce an already-low error rate.

The Governor’s response to these comments is that Democrats are somehow protecting union allies and the status quo.  If that’s the case, what to make of this fact:

In April of THIS YEAR, Democrat Bonnie Lowenthal introduced AB682, which would investigate fraud in the IHSS program.  Here’s the analysis of the bill:

1) Requires that, beginning January 1, 2010, DSS dedicate two positions to evaluate implementation of five specific anti-fraud provisions of the Welfare and Institutions Code related to the IHSS program and authorizes DSS to fill the positions either by using existing resources or, if an appropriation is provided for that purpose, by adding new positions.

2) Requires DSS, in consultation with the state Department of Health Care Services, the district attorney in the county with the largest caseload, and stakeholders, including IHSS consumers and providers, to provide a report to the Legislature by December 31, 2010, which shall do all of the following with respect to IHSS-related fraud:

a) Identify the magnitude of fraud in terms of the total dollars inappropriately spent or removed from the program, and the number of consumers harmed or placed at risk of harm as a result of fraudulent activity, through instances resulting in a fraud conviction between January 1, 2005 and January 1, 2010;

b) Identify the number of people involved in fraud for each of the following categories:  IHSS providers, IHSS consumers, state workers, county workers, and others.  In the case of “others,” the report shall describe the function of the persons committing fraud with specificity but without revealing personal identifying information; and,

c) Provide recommendations on the best means to combat IHSS fraud.

It may interest you to know how the Assembly voted on the bill.  In the Human Services Committee, the Democrats voted yes, the Republicans NO.  In Appropriations, all Democrats voted yes, all Republicans NO.  The final floor vote went 49-28, with three abstentions.  EVERY SINGLE REPUBLICAN VOTED NO except for Paul Cook, who abstained.

The ostensible reason for the Yacht Party united front against the bill?  It costs $350,000 to hire two new employees at the Department of Social Services, and give them a budget to look into fraud at the IHSS.  To pursue fraud that the Governor says would save the state $500 million a year.

This is basically what you do in government.  You learn of a problem, you study it, and then you implement potential fixes for the problem.  IHSS fraud was brought up as a problem in April, and Bonnie Lowenthal sought to fix it.  The Governor waited around for a few months, then barged in and said Democrats, who were taking the steps to fix the problem, were safeguarding public employees, and that anti-fraud measures must be taken immediately in conjunction with an unrelated budget deficit.

The only fraud here is the Governor.  He’s tried to cut IHSS funding since the day he entered office.  The Assembly passed a “quality assurance” provision in 2004 to ensure that the program ran smoothly, and the county investigations were kicked up to the state, and then the Governor NEVER FUNDED THE NEW POSITIONS for investigators to look over the county referrals.  Small wonder a lot of cases with no action ensued.

In the final analysis, the Governor is doing what he has done multiple times in the past – attempting to cheat the needy out of lawful care and services instead of doing the politically unpalatable work of cutting programs.  He’d rather reduce costs by making it virtually impossible for enrollees to stay eligible.  It’s cowardly and craven.

That’s our Arnold.