It’s hard to choose the most cruel or the most thoughtless among Arnold Schwarzenegger’s line-item cuts added to the budget revision.  But you could make a case for the slashing of all state funding for domestic violence centers, for a savings of about $16 million dollars.  LAist profiles one center, in the Santa Clarita Valley, that will probably now have to close:

The Domestic Violence Center in the Santa Clarita Valley is the only agency that provides domestic violence services in the 200-square mile valley. As a result of Schwarzenegger’s cut, which is immediate, they’ve lost 45%, or $207,222.00, of their annual funding, which they say will force them to close their doors later this year unless the community supports them with donations. In 2008, they served over 1,000 victims of domestic violence.

“As the Center’s Executive Director, I think about every client who has come through our doors and their horrific stories of abuse – I cannot help but cry when I think about what the loss of our services will mean to victims,” said Executive Director Nicole Shellcroft in a statement. “Those who walk through our doors have suffered through broken bones, beatings, strangulation, food deprivation, arson, torture, genital mutilation and unspeakable sexual violence. They have been thrown down flights of stairs, have been victim to violent physical attacks during pregnancy and have even faced the prospect of murder. Victims seek our services to escape incredible violence aimed at them and their children.”

Here’s another profile, from Oroville in Butte County.

This is what we are talking about when we say that people will die from the decisions made by Arnold Schwarzenegger and the Legislature.  The $16 million in cuts represent a pittance of the budget and far less than the $2 billion dollar annual tax cut for the largest corporations in America instituted back in February.  But, we are told, those businesses would flee the state if they were forced to contribute a fair share of taxes for the commons that they use, so instead, women and their children will have practically nowhere to turn to save themselves from spousal abuse.

It turns out that some businesses are dismayed enough to consider leaving California – not because of the lack of tax breaks, because of all of the budget cuts and the impact on the workforce.

Wilbur D.Curtis invented the globular glass coffeepot, that staple of coffee counters everywhere, in 1940. Since then his son and grandsons have turned Wilbur Curtis Co. into a manufacturing concern that earns revenue approaching $100 million by turning out commercial coffee brewing equipment from a sprawling factory in Montebello.

But their long history in California doesn’t exempt the Curtis family from the costs and hassles that give this state its reputation as one of the hardest places in the country to do business […]

Yet it’s plain that the state government has failed in precisely those areas where it can make a difference. Laws’ main concern isn’t strictly how much money the state spends — it’s that the bucks don’t go where they count.

His two biggest issues are education and infrastructure. “We pay a fortune here to educate people on basic things like writing and math skills that they should have learned in high school,” he says. The company, whose workforce is mostly Latino, also provides training in English as a second language — including for some employees who came through the public schools […]

Then there’s that lifeblood of any firm whose products can’t be shipped through cyberspace — transport.

Traffic congestion in the L.A. basin has become a round-the-clock hassle. Laws says one of his biggest customers, a coffee company with a national reach, opened a local facility here to be near its own big customers, only to find that navigating the overstressed road system drove its costs to twice its expectations.

And these complaints about infrastructure and education exist before budget revisions that would decimate the future of higher education for a generation of students, and only harm the ability to create the infrastructure necessary for densely populated areas in the 21st century.

We’re picking away at safety net programs and increasing the danger and suffering for a whole class of citizens, while protecting the largest corporations and the wealthiest campaign contributors.  And the actual lifeblood of job creation, the small business community, would rather see investment than the current hijacking of state government by those who want to dismantle it.

Related: Marc Cooper’s cover story on California at The Nation.

I’m telling you, this special election campaign resembles the Bush-Cheney “9-11 9-11 9-11 Terrist comin’ to kill you in your beds!!!!1!” 2004 campaign more with each passing day:

As he launched a radio ad campaign Tuesday for his budget measures on the May 19 ballot, Gov. Arnold Schwarzenegger said failure to approve the package would worsen the state’s already-dire fiscal crisis.

“If they don’t pass, we will be facing a $50 billion problem,” Schwarzenegger said at a meeting with Daily News editors and reporters. “It will mean massive cuts in education, hospitals, prisons. These are things people don’t want to see cut.”

$50 billion.  How does the Governor arrive at that figure?  He includes $16 billion dollars for the two years of regressive taxes that would be washed out in 2012 and 2013 if Prop. 1A fails.  He includes an expected lawsuit from education interests to force payment of $9 billion in raided Prop. 98 funds if 1B fails.  He includes the $6 billion that would not fill budget gaps from the last budget if Prop. 1C-1E fail.  And then… I don’t know, that’s only $31 billion, I guess $50 billion sounds like a nice big number.

You can put it on posters!

This is not the first time the Governor has flat-out made up numbers to win an election.  That was his road to victory in 2006, when he lied about Phil Angelides’ tax programs.  The True Lies are back, and sadly I don’t expect a soul to call him on it.

Let’s partially accept the Governor’s premise and agree that we would have a deficit caused by cutting two years’ worth of tax increases in 2012 and 2013.  Is he suggesting that the legislature would be barred from acting on anything for 3-4 years until that future problem arises?  He might as well say we have a $200 billion dollar problem, extrapolating out to 2050.  

The “doomsday scenario” only exists if you accept the premise of the conservative veto.  Only then does California risk going over the cliff.  A responsible, functional legislature that has the ability to reflect the will of the people of the state is in no danger, which is why the only reforms anyone should be voting for are the full repeal of the 2/3 requirement for budgets and taxes.

Somehow the Governor feels that ratcheting down services and leaving behind millions of Californians is the “responsible” course.  Right now we’re at the bottom of per capita spending in almost every major category – 44th in health care, 47th in per-pupil education spending, dead last in highway spending and 46th in capital investment among all states.  Heck, the state can’t even get people their unemployment checks in a timely fashion.  The so-called “responsible” course has utterly failed, and the Governor and his allies want to constrict this pitiful investment even more.

I will quickly tire of these nonsense efforts to scare people into backing another layer of restriction onto an already failed budget process.  Hopefully the voters feel the same way.

UPDATE: This is amazing.  Shane Goldmacher queries the Governor’s spokesman on where the hell Arnold came up with the $50 billion dollar figure, and look at the response:

“He was speaking hypothetically,” said spokesman Aaron McLear. “His point was if we don’t reform our budget system then we’ll be right back where we were with that huge budget deficit.”

I’m sure he’ll continue to “speak hypothetically” in the most hyperbolic way possible.  Some would call this manner of speaking, um, “lying.”

There’s a very pernicious habit in California of turning away from budget issues once a crisis is averted, in a show of relief that we will at least get a small reprieve from having to deal with the contentious battles for a period of time.  This false sense of security is bad enough in regular years, when the budget is cobbled together through borrowing against the future and no long-term solutions are implemented.  In this dynamic economic crisis, when rosy outlooks can darken in a matter of days, it’s downright foolhardy.

Greg Lucas at California’s Capitol has been one of the louder voices in insisting that the budget crisis is not at all over.  According to Controller John Chiang, revenue in February was $900 million dollars below estimates.  Now, if you extrapolate that out, we’ll be in a $10-$12 billion dollar budget hole by the end of the year just if things remain at the same level.  This is of course unlikely, as the February national job numbers showed.  So much of the tax increases passed in the February 19 budget solution are tied to employment – an increase in the income tax, and sales tax increases that of course rely on residents having purchasing power.  In addition, these lean economic times will push more people into needing state services, like unemployment and Medi-Cal.  Then there are the counter-cyclical increases and cuts that are working against what the economic recovery is attempting at the federal level.

In addition, many of the spending and taxation decisions made in the recent budget cancel out some of the benefits to California of the American Recovery and Reinvestment Act.

The federal package provides an estimated $13.1 billion in refundable income tax credits for middle to low-income Californians at the same time the state budget includes $12.2 billion in tax increases, only some of which are deductible. And only half of taxpayers deduct.

The federal bill includes a one-time $250 payment to the state’s aged, blind and disabled poor at the same time the state is reducing the maximum grant for an individual by $37 a month, $444 annually.

“California is roughly an eighth of the nation. The impact of this is sufficiently large that it could affect the prospects of recovery for the nation as a whole,” said Jean Ross, director of the California Budget Project, who has been examining how the state’s budget interacts with the federal stimulus package.

The biggest short-term issue is cash.  Lucas did an interview with John Chiang where he admitted that we will still need to borrow against the anticipation of future revenue as early as April, to the probable tune of $1.5 billion.  Because the budget deal was completed too late to include changes to the income tax code, those revenues will not come in until the following tax year.  The sales tax will go up April 1, but that will not be enough to cover expenses.

CC: Is February a big month for obligations?

JC: No. April is the real difficult month. If we don’t get that RAN, we’re $636 million in the red. But then the bigger issue is July. When we walk into the next fiscal year we will need a massive cash infusion.

CC: How come?

JC: We always borrow at the beginning of the year, 25 out of the last 26 anyway and then in April we make up the difference. But this year we walk in with weakness into the next fiscal year. There are less tools in the tool kit.  We’ll need a massive RAN or RAW (Revenue Anticipation Warrant).

Remember these last budgets borrow $16.5 billion from (state) special funds to backfill the general fund. So if we have any emergency in the state requiring aid from one of those special fund departments, the state is in trouble. Over 1,100 special funds in the state and we borrowed from over 650 of them. Part of this last budget solution gives us the ability to borrow another $2 billion more. The governor’s budget has us borrowing $11 billion from special funds over the next 18 months.

So we’re going to have to do some outside borrowing for the next fiscal year. Period.

And of course, there’s very little anticipation of the worsening economic picture in the budget, meaning that we’ll be in unquestionably worse shape by summer.  And the cash crisis, forcing short-term borrowing, really impacts selected projects that go out into the bond market, for example infrastructure like the high speed rail project, which will basically have to shut down if there isn’t a quick infusion of cash.  Keep in mind that California has the worst bond rating in the country and the credit markets are still not that friendly to the state.

Another pressing matter is the determination of how much money from the federal stimulus will be available to the state to fill budget holes.  There is a “trigger” in the state budget that would actually reduce some cuts – most of them the worst of the worst, particularly in health care for the needy – as well as reverse increases to the income tax, if at least $10 billion dollars in federal money hits the state budget.  It’s not just that money comes in, it’s that it has to go toward general fund relief in order to contribute to the trigger.  And Mike Genest, the Governor’s finance director, has a preliminary estimate up showing that the state will come up short.  This is insanity.  As the California Budget Project noted on a conference call today, there will be many billions above the trigger number available to the state, the legislature need only craft the receipt of that money in such a way to hit the trigger.  Otherwise, they are raising taxes and cutting services, and needlessly so.  One such bill would change Medi-Cal eligibility requirements to free up as much as $11.23 billion over 27 months.  That should happen ASAP.  Democrats are trying to write this as a special session bill and ensure that it requires only a majority vote.

The main point here is that we remain in crisis mode with the state budget, and will continue for years upon years until we stop putting off the fundamental, structural solutions the way we constantly do.  For example, the prison system remained virtually untouched during the budget crisis, despite being both crippling to the bottom line and unconstitutional in its overcrowding and inability to provide health care.  We desperately need structural changes with how the state budgets, and those will only be accomplished by demolishing the conservative veto over the process and repealing the 2/3 rule.

UPDATE: Here’s a link to the CBP study of the American Recovery and Reinvestment Act, identifying as much as $50 billion dollars available to the state in funding.  Surely the legislature can figure out how to capture 20% of that and set off the budget trigger.

Today’s LA Times contains a “news analysis” by Evan Halper that seeks to explain why taxpayers seem to be getting less for their tax dollars. But the most obvious point goes almost totally ignored – that tax cuts have reduced the ability of government to provide for basic services. Since that isn’t part of this article, the effect is to mislead readers into thinking government is misusing tax dollars, and thus winds up reinforcing right-wing frames.

Reporting from Sacramento — Middle-class Californians have long griped about paying more taxes than they might pay elsewhere, but for decades this state could boast that it gave them quite a bit in return. Now that contract is in doubt.

A modern freeway system, easy access to superior universities and progressive health programs used to be part of the compact. Even local schools plagued with financial problems continued to offer small classes, innovative after-school programs and advanced arts and music curricula.

These opening paragraphs set the tone for a flawed article. That “social compact” has not really functioned as Halper suggests since 1978. Our freeway system was largely in place by that time. Additional freeways were mostly paid for by higher taxes – even Orange County has voted to tax itself twice since 1990 to build and expand freeways. The “innovative after-school programs” were created by ballot-box budgeting. Advanced arts and music curricula have been absent from most districts in the state since the 1980s.

In short, Halper starts from a flawed premise.

But at a time when taxes are about to rise substantially, the services that have long set this state apart are deteriorating. The latest budget cuts hit public programs prized by California’s middle class particularly hard — in some cases at the expense of preserving a tattered safety net for the poor — following years of what analysts characterize as under-investment….

“Twenty years ago, you could go to Texas, where they had very low taxes, and you would see the difference between there and California,” said Joel Kotkin, a presidential fellow in urban futures at Chapman University in Orange. “Today, you go to Texas, the roads are no worse, the public schools are not great but are better than or equal to ours, and their universities are good. The bargain between California’s government and the middle class is constantly being renegotiated to the disadvantage of the middle class.”

And here you see the right-wing framing – in some cases made explicit, that programs benefiting the middle-class have been cut to “preserve a tattered safety net for the poor.” Kotkin, a high-profile conservative think tank figure who has blamed “greens” for the state’s current crisis is never going to explain how tax cuts have caused California to fall behind in maintaining its once-great systems of education and health care.

The closest Halper gets to acknowledging the true nature of the problem is here:

The reasons are varied. The cost of services continues to outpace inflation. Programs are being squeezed out by things the government was not providing in the halcyon 1950s and early 1960s, including Medi-Cal and some welfare programs. And the state has been reluctant to embrace new ways of funding services while holding back state money to plug other holes in the budget.

In fact Medi-Cal’s earliest origins lie in the 1959 legislative session, as do some welfare programs. Halper gingerly discusses a state “reluctant to embrace new ways of funding services” but this is the closest his article will ever get to the truth, which is that the conservative veto has prevented California from raising taxes to keep the services flowing to the middle class. Even Ronald Reagan did this in 1967 but you would never know it from Halper’s article.

Nor does Halper explain, anywhere, the billions in tax cuts that have been made since 1978 – a structural revenue shortfall that costs California at least $12 billion a year. Halper does a good job of showing how our basic services are underfunded but totally fails to explain the reasons why. As a result he closes his article with comments from conservatives like Mitt Romney and Joel Kotkin that not only go unanswered by any progressive voices, but go unanswered by reality:

Former presidential candidate Mitt Romney spoke to the frustrations of many California parents during a speech at last weekend’s state GOP convention in Sacramento. Pointing out all the taxes Californians are now paying, he asked, according to the Sacramento Bee: “With all that money, how are your schools?”

The simple answer is: Not what they used to be. And now the state is cutting billions more out of them, including money set aside to keep classes small and to fund arts and music electives.

“The social compact is: I pay taxes and good things happen,” Kotkin said. “But I pay a lot of taxes and can’t send my kid to our local public schools because they are terrible.”

Conservatives broke that social compact by telling Californians “you can pay less taxes and good things will happen.” It’s wrong for conservatives to turn around and say “oh gee the system’s screwed up” when they are responsible for the mess.

And it’s inexcusable for the LA Times to reinforce such right-wing sentiments with such an article that refuses to point out what actually went wrong, and who is responsible for it.

So there is going to be a reconvening of the State Senate today at 10am.  I know, that’s what they said yesterday.  But the plan from Sen. Steinberg is to keep the Senate on the floor until 27 members vote for passage and the crisis is (temporarily) averted.  Meanwhile, 20,000 layoff notices and the closure of $3.8 billion in state public works projects will take place today.  Things like projects to eliminate arsenic in Live Oak in the Central Valley.  You know, dispensable things.  And the Times has a bead on the three Assembly members who plan to vote in favor – Roger Niello, Anthony Adams and Minority Leader Mike Villines.  This is a representative sample of the countervailing forces that Yacht Party members have to deal with.

Adams, a bearded 37-year-old who was elected in 2006 after working for San Bernardino County as its legislative liaison to Sacramento and Washington, has said he would provide the Assembly’s third GOP vote.

“It’s unconscionable that we let this state go over the cliff,” Adams said in an interview. “My job is to get the best possible deal for Republicans.”

Adams faces reelection next year, and his support for the budget package has antitax advocates interested in lining up a challenger in the GOP primary. And because he represents a swing district, Adams must also worry about a general-election challenge from a Democrat.Adams said he had not asked for specific concessions for his vote, or for assurances that he would get assistance to fend off election challenges.

“I’m not trying to find some soft landing,” he said, “although my wife is going to kill me if she hears that.”

They are not rewarded for their vote, and they fear their own “head on a stick” party members more than the opposition.  And so you get this gridlock.

It occurs to me that what Steinberg is doing is what progressives have asked Harry Reid to do in the US Senate for years now.  When GOP obstructionists threaten to filibuster key legislation, we always say “Make them filibuster!  Make them stand up in the well of the Senate and talk endlessly about how we can’t afford to provide health care for children, or how we have to offer more tax cuts to the wealthiest 1%.  Let the whole country see it!”  Well, we’re basically doing that.  The 15 members of the Yacht Party caucus in the Senate will be locked down and forced to reiterate their arguments indefinitely.

Problem is, the whole country won’t be seeing it, the whole state won’t be seeing it, in fact almost nobody will be seeing it.  This is the true failure of a lack of political awareness in California, and a lack of political media.  The pressure points are nearly impossible to hit.  A lot of lawmakers will get tired and need to “bring your toothbrush,” as Steinberg said, but there’s precious little drama outside of Sacramento.  And yet the decisions made in that chamber will undoubtedly impact the entire national economy, not just us.

But that is also good, in a sense, because it means that a sliver of opinion makers descending on the phone lines of the legislature can seen like an army.  I’m going to reprint the email alert that Brian sent out last night, which you may have received, because I think he captured the situation perfectly.  The leadership is making them filibuster.  Now it’s up to us to put on the pressure.

Hey there, registered Calitics user –

If you have been watching Calitics or the news this week, you’ve heard about the budget debacle going on in Sacramento.  For the last three days, we have remained one vote short of the required two-thirds majority for a budget deal, with only two Republicans being willing to join the Democratic caucus in the Senate. You can follow our coverage of the Budget here:

http://budget.calitics.com

To be blunt, the budget deal on the table is a mess. It consists of over twenty bills in each chamber. It guts environmental protections on several major projects, it offers gifts to corporations and a few powerful industries.  It relies on cuts and borrowing far too heavily, and does not provide the real long-term fixes of our revenue stream that we so desperately need. And the spending cap that will go to the ballot in the spring represents a major step backward, and progressives will have to expend substantial resources to defeat it. Yet despite all that, only one thing is really clear:

If we do nothing, the state faces systemic collapse.

Because Republicans refused for years to look at new revenues to balance the state’s budget, California is being hit harder by the economic crisis than any other state. We face a $40 billion deficit, and already the state is running out of money. Schools are looking at cutting classes and laying off teachers. Tomorrow, if there is no budget, 276 infrastructure projects will be halted – affecting 38,000 workers in the state, and the governor has announced that he will issue layoff notices to 20,000 state workers. And the state’s credit rating, already low, will suffer further downgrades, effectively costing taxpayers more money.

The media has now taken notice that the Republicans are trying to bring the state down with them. But the media has little power if we aren’t watching and if our leaders don’t know we are watching them. So, here is what we need to do:

Call Senator Abel Maldanado (R-Monterey County, 916-651-4015) and tell him to give up his list of demands and end this hostage situation.

Call Senator Dave Cox (R-Fair Oaks, 916-651-4001) and tell him that the state deserves better than a Senator who goes back on a deal when threatened by his own party’s extremists.

Tell as many people to do the same thing. Use every tool at your disposal, Twitter, facebook, or just word of mouth. The more people that know about this Republican extremism threatening our state, the better.

The Senate is set to once again resume session, and we might be in for another all-nighter. However, keep at it, because this is simply too important to let Republicans play their dangerous games with the lives of Californians.

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

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

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

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

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

The Chronicle has a similar article.

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

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

Rachel Maddow is more than just an excellent TV host and progressive hero. She’s also a policy geek who hails from Castro Valley and who, because of her father’s long experience working for East Bay MUD, knows a LOT about California water policy.

In December she was invited to give the keynote address at the annual conference of the Association of California Water Agencies in Long Beach. It was a fantastic speech, showing her range of knowledge on federal infrastructure politics and California’s water needs.

The speech is reproduced below in its entirety; I haven’t been able to find an audio or video of the address but am told it was very well received by the audience.

Maddow’s words are all the more important as California enters the third year of the most severe drought the state has faced since the American conquest. She speaks of three “water eras” and that the third, which we are now entering, will be defined by the search for “water security.” It’s a perceptive, big picture talk that sets out the fundamentals that ought to guide us as California struggles to deal with the water crisis.

The speech is also a useful counterpoint to Dan Walters’ latest column, which blames the water crisis on the state being “ungovernable.” That misses the key point – California’s ungovernability stems from the decision in 1978 to lock 20th century policy in place by giving conservatives a veto, conservatives who have defined their politics by promising to preserve the 20th century model of California life, with all of its waste of resources and unequal outcomes.

Maddow reminds us that to deal with the crisis, we need an attitudinal shift – and that shift must come as part of a breaking of the conservative veto over California politics. Only when we decide that the policies of the 20th century must be abandoned will Californians mobilize to take power away from those who so recklessly defend those policies.

RACHEL MADDOW’S SPEECH

ACWA FALL CONFERENCE

LONG BEACH, CALIFORNIA

WEDNESDAY, DECEMBER 3, 2008

Thank you so much for having me here — it really is an honor.

I know that I’m a new face to a lot of you here — which makes it all the more kind that you invited me to speak.  But maybe it’s wise if I introduce myself a little — or at least explain how I got here.

I was born in 1973 — or as we called it in my family — the year the California Aqueduct was completed.

I went off to school — to public kindergarten — the year that Prop 13 went into effect — I can actually remember the library hours changing because they couldn’t afford to staff it anymore.

I grew up in the East Bay Municipal Utility District, and my parents still live in the house I grew up in — though now there’s a drinking water filter on a pitcher next to the sink in the kitchen, which we never had when I was a kid.

The first posters-or-anything I remember us putting up in the house were really pretty drought-related exhortations in favor of native plants.  I don’t even think my mom liked California poppies, but we had posters of them all over the house because they were apparently the poster-plant for patriotic gardening in the 70s.

Our family vacations were to a place that other kids called “Yosemite” — but in our family, it was the place with the reservoir where Hetch Hetchy got its water!  

We’d pile in the car and drive to grandma and grandpa’s house in San Diego, very excited for the canal-viewing opportunities from interstate 5 as we drove south.

We didn’t go so far as to have a Delta smelt as a pet or anything, but California’s water troubles… were really quite central to the way I understood the world as a kid.  

And growing up in a time of drought — made a lasting impression on the wet-cement of my very young mind — it gave me a lifelong appreciation that water is rare… water is fragile… and water is power.  I live on the east coast now, in New York City, where everyone thinks that time is money — to me as a kid… and I guess now, too… water always seemed like money.  Water.  Oil.  Land.  Information.  Control.  Things to fight over — things to fight for.

Now California’s back in drought — my parents have long-since converted everything at their house that’s convertible to low-water-use… and so have all our neighbors as well.  They didn’t do that out of do-gooder hippy instincts… we don’t live in a very hippy do-gooder kind of town and we’re not a do-gooder hippy kind of family — but people have made the switch because it’s dumb not to.  It’s the same for families as it is for farmers and businesses now — no one can afford to waste water… or to waste much of anything anymore.

As we head into the worst economic prospects in more-than-a-generation… as we’re back in drought in California… with a new democratically-dominant era coming to Washington… is California going come out of this drought differently than it has from others?  Are big changes ahead for the perennial resource fights that have defined my life as the daughter of a California water geek?

Briefly, let me say this about the election of Barack Obama to the presidency.  He ran, essentially, as the Hope candidate.  I know everyone says he was the “change” candidate — but honestly, both campaigns ran their guy as the change candidate — McCain said he’d bring mavericky no-business-as-usual change to the republican party and to Washington, Obama said he’d bring change to Washington not just by changing the party in charge, but by changing from the divisiveness of typical politics.  

Dick Cheney was not on the ballot this year — the chant of “four more years” was a threat and an insult, not a cheer this time around — everyone was running as a change candidate.  You know, our existing President George W. Bush told an interviewer during the campaign that if he was running for a third term this year, he would have run as a change candidate!

So while this was inevitably a change election — I think it’s important to remember that Obama ran as the hope guy. The hope candidate — the don’t be afraid, don’t look down — look up, we can aspire to better things, be hopeful, brighter days ahead guy.

While that’s neat — and I do feel good about our country electing an African-American president for the first time, and for choosing the let’s-not-blame-each-other, we’re-a-united-country, we-all-need-to-pull-together candidate?  While I think that’s neat and I do feel proud about that?

I do think it’s worth asking who in their right mind… would be hopeful about the country’s future with an economic outlook like this.

The economic crisis we’re in right now is so big and so dire, that you can’t use metaphors anymore to explain it.  The burning house, the house of cards, dominoes, they’ve all been rendered quaint by how big a mess this is.  Rather than a metaphor — how about a comparison.

If you add up the money that the federal government, the Bush Administration, has spent-or-committed-to-spend in an effort to shore up the economy THUS FAR — what we’ve spent or committed — it is greater than the entire cost of the new deal.

– It is greater than the cost of the Louisiana purchase. – It is greater than the cost of the Marshall plan. – It is greater than the cost of the Vietnam war. – It is greater than the cost of the KOREAN war. – It’s greater than the S&L scandal. – It is greater than the cost of the effort to get a rocket to the moon. – It is greater than the expenditures, actually, for the entire lifetime of NASA as an agency. – It’s greater, and I am not kidding here, it is greater than all of those things combined. – And yes, I’m adjusting those dollars for inflation.

For what we’ve spent… for all that… does it seem like we’re out of the woods?

Yeah, I know.

So it is hard to be hopeful.  About the future of the country… given the scale of the economic pickle that we’re in.

But you guys here in this room — maybe ought to be hopeful… about the prospects for fixing some of the problems you’ve joined this association to confront.  Oddly, the depth of the financial crisis may offer a historically-informed reason to be hopeful.  

And that’s because spending on infrastructure… at the federal level… and to a certain extent at the state level, too — starts to look like a smart economic idea, in tough economic times.

In fact, when you start reading, in any field, about crumbling American infrastructure, you very frequently come across the phrase, “about 80-years-old”!  So much of what we worry about, and what needs replacing, and what we wonder how we’ll ever match in terms of scale and ambition — is about 80 years old — because about 80 years ago — the second-President Roosevelt’s response to the great depression was to build build build, invest invest invest.  To spend massive amounts of public money to put people to work and to pray to the gods of keynesian economic prowess, that it would work to swing the country back into the black.

The spending helped… the projects were built… and ultimately what ended the depression full-stop, was World War 2 — and a level of massive national mobilization…and spending — that also had the pleasant side effect of liberating the world from Nazi tyranny and elevating us to superpower status and a source of envy and pride for the world.  (That list of all the massive spending outlays that don’t even come close to equalling what we’ve spent-or-committed-to-spend on this financial crisis?  That didn’t include World War 2.  We spent more on World War 2 than we’ve spend thus far on this crisis).

But in the 1930s, the Depression, the New Deal and its public-investment prescription meant a lot of very specific things to the West and water.  FDR promised the new deal in 1933 — in 1934 — the Bureau of Reclamation received a budget that was half of the total budget it had received for all of the previous 31 years combined.  A hundred million dollars!  

In the 1930s, we saw the construction of the Central Valley Project, the Big Thompson project, the Columbia Basin, of course the Hoover Dam, completed two years ahead of schedule in 1935.  

The Central Valley Project had been proposed in 1931, it had a hundred and seventy million dollars worth of bond-funding approved for it in 1933, but in the midst of the Great Depression and a dearth of investors, it wasn’t going anywhere until two years later, in 1935, when FDR approved federal funds for it.

As you all know, the CVP was a massive project, equivalent in size if not fame to the Tennessee Valley Authority — it was a huge undertaking that turned the Central Valley of California into the breadbasket of the nation.  And of course brought with it some equally massive environmental challenges.

Are we due for a new New Deal as a response to this current financial crisis? If you squint and he starts smoking again, can you imagine this new guy as Barack Delano Obama?  In some ways, yes.  Yes, we can.

Candidate Obama talked up a fifteen billion dollar national infrastructure investment bank while he was on the campaign trail.  Since the financial crisis ate trilions of dollars of investment income and stock value, since the industry we used to call “investment banking” disappeared in America, since we seriously began to ponder the very real possibility that there will no longer be any American-owned companies that make cars anymore — since jobless numbers started hitting ten, twenty, thirty year highs — you can take that 15 billion-dollar infrastructure-spending campaign-promise, add a zero on the end of it, and then start doubling.

By economic imperative if not ideological commitment, the federal government will increase, by impressive amounts, its spending on the home-grown systems that form the basis of our economy and our way of life.  

I interviewed then-Senator Obama about a week before the election; I asked him about infrastructure investment — and he proactively raised the issue of the electrical grid as something that is not only antiquated and fragile, but in need of a politically-informed overhaul to bring it in line with our ambitions about diversifying our energy sources and making our energy use more sustainable.  

In his first president-elect youtube radio fireside chat thingie — president-elect Obama then singled out roads and bridges and schools as targets for federal re-investment, as part of a new jobs program that he says aims to create or save 2 and a half million jobs over the next two years.

In other words, infrastructure is back.  Some Republicans in Congress will oppose a lot of the new spending, but they will not be able to mount a unified opposition to the democratic-led efforts because a lot of them support it, too.  Democrats like to capitulate to Republicans even when Republicans don’t have any real power to wield, so they will succeed in inflecting some of the spending bills, changing some of the areas of focus for the new investment, but they won’t stop it.  There will be a big new federal-spending commitment to roads, bridges, schools, mass transit, communications, energy, and… water.

Which is the silver lining we’ve been waiting to find… around the dark, dark cloud that is this worst economic forecast … in about 80 years.

But there’s that phrase again — in about 80 years.  If water-in-the-west is due once again for a round of federal investment much as it was in the last great economic downturn — should we expect that the same kind of projects will be built?  Is there another Hoover Dam, another CVP, another massive water-storage diversion civil engineering monument that’s ready-to-go, agreed-to, and just waiting to be funded?

Maybe there is — I’m not dumb enough to weigh in pro- or con- on the old peripheral canal idea, so don’t try to tempt me.

But my sense is that the infamous water wars of California… of which you-all are veterans… have seasoned you… prepared you well for the big-grab, the big resource scrum that’s ahead.  But I just want to interject one idea about how the politics of infrastructure and federal investment in infrastructure have recently been changing.  Since the Bush Administration has been in office and the Department of Homeland Security has been created — there’s been a sort-of democratic government-in-waiting taking shape, biding its time, working on campaigns, writing think-tank articles and giving speeches — about how they’d do security differently.

It’s true in every field, actually — Tom Daschle since he lost his job as democratic leader in the senate, has been positioning himself as the democratic party’s big health-care thinker — now he’s coming back to washington as the secretary of HHS.  Lawrence Summers, Bill Clinton’s Treasury Secretary — since he left Washington, he’s most publicly known for a really bad time as president of Harvard — but he’s also been the Democrats’ economic modeller-in-chief — very publicly transforming himself from an anti-regulation ruling-class-interests kind of guy — into the centrist reformed-deregulator, post-Rubinomics that is the hallmark of all the economists who Obama has brought to Washington now.  

And on security issues… one big difference between the outgoing administration and the incoming administration… the old-school and the new-school, which you can tell if you geek out on this stuff like I do and you read the academic papers of and go to the speeches of the wonks who have been the Democratic-government-in-waiting while Bush has been in office?  The difference?  Is that the homeland security thinking of the new guys.  Includes infrastructure.

Which means you won’t be able to compete for infrastructure resources using the same arguments that you did with the Bush administration… or that you might have used during earlier eras of federal investment like during the New Deal.

I think you can make the case that the first era in water-in-the-west was defined by development — on the national scale it was Manifest Destiny, at the local scale… it was things like the migration of people out of San Francisco after the 1906 earthquake that forced the quick buildup of water infrastructure in the area where I grew up.

The second era of water-in-the-west I think has been the struggle to find sustainability — balance… to make sure that even the stakeholders who don’t use water to turn a profit, are having their interests represented in the great competition for western water.

As you know here in California, fish have much better lawyers now than they did back in the day. Sustainability and environmental concerns are not going away in California or anywhere else.  Ideally we’d be moving into a time in which environmental and business concerns were not always automatically assumed to be at odds, but as long as there are scarce resources, held to a certain extent in common, which require private exploitation for necessary for-profit industries… I think there’s always going to be conflict there.  Creative conflict, hopefully — but conflict.  May the best lawyers win!

I’d argue now, that a third era is on us that isn’t specific to the west, but will affect how well the west does against the rest of the nation in competing for federally-funded infrastructure investment… and ultimately what kind of projects get agreed-to, funded, and built here in this era of opportunity — and that’s the issue of security.  The ideas of catastrophe and resilience.

All those peat levees built oh-about-80-years-ago in the Sacramento-San-Joaquin river valley?  Their failure due to earthquake, flood, or evil design?  Would not only drown the islands of the delta… it would drown the islands of the delta and the delta itself under hundreds of billions of gallons of salt water.  And then what would California drink?

Sure, the great aqueduct every year swallows its fair share of cars, trash and unlucky fishermen… but what if the little pipebombs those fishermen sometimes put into the aqueduct to make the fishing a little easier (and a heck of a lot more dramatic)… what if one day instead we found a smuggled warhead… a biologic agent… maybe capable of killing a lot of people… definitely capable of terrorizing a whole population.

Of the 101 chemical facilities in the United States that are considered to pose the highest risks to nearby population centers?  15 are water utilities.  What if one of the 11 of those utilities that uses chlorine gas as its treatment agent… what if one of those utilities, again, due to earthquake, flood, or evil design, ended up pushing a cloud of chlorine gas downwind to the nearest population center…

Infrastructure is central to security for two reasons.  One — it’s a target for terrorism for all the obvious reasons.  The goal of terrorism is to generate enough social and economic disruption — to traumatize an entire population.  And thereby generate political pressure to pursue draconian measures in response, that ultimately undermine the sustainability of the existing political leadership… or ultimately… that undermine the sustainability of that whole existing political system.  Terrorism works like an antigen — you introduce an agent to an organism that causes the organism to turn its own resources against itself.

For that reason, we’ve seen on 9/11, in Madrid, in London, in Mumbai — low-tech coordinated terrorist assaults designed to inflict maximum civilian casualties, maximum disruption, maximum economic impact.  Bin Laden, in statements since 9/11, has consistently bragged about the economic impact of the September 11th attacks — the bang for the buck — how little the operation cost them to carry out, as compared to the costs it inflicted on us… and that we later inflicted on ourselves.

So infrastructure is important to security first, because it’s an obvious target for terrorism.  But infrastructure is also important to security because even if the threat does not come from terrorism, having the ability to withstand natural disaster, the strains that come from growth and development is an important indicator of national strength, and of competitive advantage.  

The Council on Competitiveness last year reported on risk, security, and terrorism for the private and public sectors, and concluded that, “the ability to manage emerging risks, anticipate the interactions between different types of risk, and bounce back from disruption will be a competitive differentiator for companies and countries alike in the 21st century”.

Companies and countries alike — and I’d argue, states as well.  

People and companies and the ensuing opportunities will gravitate to places that seem robust, dependable, and predictable.  Not being able to manage crises? Having obvious sources of risk and potential catastrophe unattended to?  Is a great excuse for any business to say bye-bye California hello Puget Sound, hello Toronto, hello Asia…

This is the new thing to understand about the new Democratic federal political scene.  The idea is that things will go wrong periodically — whether by God’s design or man’s — and our ability to be resilient, to withstand a punch, to bounce back quickly, to get things back to normal — is a form of national resilient strength and national security… that puts a different cast on potentially catastrophic failure of existing infrastructure.

The guy who’s best at spelling this out is a retired Coast Guard officer from the east coast named Stephen Flynn — he wrote a book called Edge of Disaster — required reading for understanding how to argue for infrastructure investment in the new administration.

Our water infrastructure, much like our energy, communications, transportation, and emergency response systems — need to be able to stay standing, to stay operational in the face of natural disaster or man-made disaster.  That means that our systems need to be strong-enough and well-maintained enough to take a punch — it also means we may need redundancy built into the system — so if critical function are incapacitated, we can swap something else in temporarily to take its place until repairs can be completed.  

Even if the world were as safe as it felt when I was growing up drinking East Bay Mud tapwater… it would still be the right thing to do by America to make those kinds of investments.  We skipped a generation of investment in infrastructure — we just passed the fifty-year anniversary of the Eisenhower interstate system — and those roads and bridges built for less than 200 million people … are now, at the end of their expected lifespans, serving more than THREE hundred million people… who sit in traffic a lot… and pray a lot… when we feel that truck ahead of us on the bridge making those expansion joints rumble.  We’re squandering the inheritance from our smart grandparents who built this country — we’re not doing our part.

Even if the world were as safe as it felt when my mom first planted those California poppies in our back yard, investing in infrastructure would still be the right thing to do, particularly in a massive economic downturn — in order to give American business a fair-shake at competing in the modern world, just as the earlier generations of investment gave American business a huge leg-up in the world because our reliable water sources, our aquifers, or aqueducts, our dams, our electrical system, our highways, our airports and our air traffic system… they were the envy of the world.

Now, the imperative of security has added a new layer to the way that we talk about and argue for and make decisions about what gets built and what gets maintained, where the money goes.  Thinking about security, thinking about catastrophe isn’t fun – it isn’t the kind of be-afraid–be-triumphant emotional whipsaw that we’ve been on, nationally, for the last seven-plus years since 9/11.  But it is the grown-up way for us to move forward as a country.  It’s about denying our enemies easy targets and satisfying results.  And beyond terrorism, it’s about responsibility and competence and the core strength of the country.  

In the big scramble for resources that’s coming, as the new administration starts thinking new-deal-ish thoughts, the choice that you guys have to make now — is whether, looking west, California will look like the land of perennial water wars and thorny politics and the-perfect-as-the-enemy-of-the-good — or whether, instead, California will be able to describe its plans for its own future, in clear terms that resonate with the new politics… that are sweeping into Washington.  

It’s a real honor to have been asked to speak here today — thank you so much for having me.