On Friday the 13th, it occurred to me that Gov. Arnold Schwarzenegger, who just released his annual budget plan — along with a massive bond proposal to fix California’s decayed infrastructure — must be realizing that luck is not exactly with him.
The 13th was the day newspapers reported Schwarzenegger had decided to bail out the feds using $70 million from California taxpayers. This king’s ransom will be spent in the next two weeks to repair the disastrous Jan. 1 launch in California of the new federal Medicare prescription drug program.
Apparently, so many poor people were switched to the federally funded program at once on Jan. 1 that the program suffered a mini-meltdown in many states. In California alone, 200,000 elderly and poor were in danger of being denied medicine, so Arnold acted to avert possible tragedies. The immediate price tag here is $70 million, but it’s anybody’s guess if that’s where the buck stops.
The spectre of California bailing out the feds was an ironic cap to a week in which Schwarzenegger simply could not win for doing the right thing.
A few days earlier, he released a politically centrist budget that did not raise taxes but did restore $1.7 billion the state owes to schools — the most emotional political issue in California in 2005.
In reward for his sensible budget, he was maligned for spending too much, spending too little, taxing the wrong people, taxing too much, taxing too little and funding the wrong things.
He was even taken to task by the non-partisan Chief Legislative Analyst Elizabeth Hill, whose off-base comments sounded like her withering reviews of the awful budgets dreamed up by former Gov. Gray Davis.
After all, Davis was busily spending California into a $25 billion hole, while Arnold’s plan achieves what politicians call “a slowing rate” of overspending. It’s not too inspiring, but it typifies Schwarzenegger’s strategy to reduce growth until the deficit gradually fades into oblivion.
The Democrats are acting horrified by his plans to spend an extra $300 million on specific policies and programs that he supports. Senate President Pro Tem Don Perata, the most powerful Democrat in Sacramento, complained that the governor was proposing “more spending” than even the Democrats. Humorous.
For their part, Republicans were up in arms about his massive proposed bond measure package. It would spend an eye-popping $222 billion on decaying roads, levees, reservoirs and other infrastructure that cannot withstand a major disaster — or even a whole lot more wear and tear.
The message I take from these past several days of hammering on Arnold is that while a lot of us are happy he is no longer pointlessly drubbing the Democrats, it doesn’t mean he’ll be rewarded for governing as the rational centrist he was elected to be.
“The governor knows that voters really want to see that money go back to the schools,” the Dept. of Finance spokesman H.D. Palmer told me the other day. “He’s still a fiscal conservative, but he also heard their message.”
It is the awful fate of centrists that they never make any of the loudest and most manipulative voices happy.
Sure we need to shore up the thousands of miles of locally controlled levees in California whose conditions are unknown, substandard, or in dispute (gulp). But no bused-in crowds of union workers will jeer the governor at his next public appearance if he consistently fails to address infrastructure.
Yet it’s precisely the sort of thing a centrist governor really cares about. As Palmer quipped to me, “I think it’s Texas where they say the only thing in the middle of the road is a yellow line and dead armadillos.”
Centrists are a rare breed in politics because luck is against them — at all times. The tectonic plates in politics are greased by emotion, anger, battles, blame and narrow constituency groups who drive it all.
Still, the governor seems vigorously committed to his centrism in 2005. As Palmer notes, the governor proposed roughly $300 million in extra spending to pursue a variety of serious issues close to his heart, including $55 million to prepare California to deal with a flu pandemic, safety of the food supply and other threats.
“Another chunk is being spent so that we can forgo student fee increases next fall at UC, which the public also supports,” Palmer tells me.
(I don’t happen to agree with this huge gift from taxpayers to university students. California, despite its recent fee increases, is still a dirt-cheap state in which to attend college. It’s time that middle-class and working taxpayers stopped paying a fat subsidy for the children of other middle-class and working Californians. It’s yet another unfair wealth transfer wrought by our legislature).
But let’s not quibble over that right now. Overall, the governor is proceeding in a sensible way. For example, Palmer says, the governor is proposing that Proposition 42 transportation funds (which were raided by the legislature to cover its gross overspending) be partially repaid — $920 million of $1.4 billion raided by our legislature would finally flow to gridlocked communities.
In other words, if Arnold gets his way on this budget, voters who backed Prop. 42 might finally see transportation projects built.
How have the opinion-makers around California responded to all this?
Well, for starters, the governor has not been blamed by our benevolent media for the Medicare disaster created by the feds’ rush to sign up too many people the moment the new program began on Jan. 1. However, if I know my colleagues in the media — and I do know them — they are probably searching for a way to blame Schwarzenegger.
For now, though, Arnold’s decision to help out with $70 million from California taxpayers is the one widely well-received decision among his many spending/cost-cutting strategies and tactics. It’s oddly looking like his one piece of PR luck.
Here’s the rundown on the rest.
Benjamin Powell, director of the Center on Entrepreneurial Innovation in Oakland and an assistant professor of economics at San Jose State University, wrote in the Daily News of Los Angeles that Schwarzenegger’s State of the State speech revealing his key budget efforts for 2005-06 was “not just a move to the left; it was a move beyond the left.”
Newspapers throughout California reported that the governor was “reducing” or “cutting” money now going to childcare for the poor. In fact, as few newspapers had the decency to explain, he is cutting money flowing into an unused program because so few CalWorks recipients ended up getting jobs and needing childcare. Big difference folks.
As Palmer notes, “The Sacramento Bee got the story right, but the headline was totally wrong, saying we are cutting childcare. So if you hear the ‘advocates’ claiming in the next few weeks that Arnold is taking money from childcare, hold the phone!”
He continues: “Two years ago the legislature passed welfare reform requiring welfare recipients to get 20 hours of work or ‘work-related activities.’ So the people who are transitioning off welfare will need more childcare, so we put more money in last year. At least, that was the assumption — there would be a big need there. But when we got the info back from the counties, the caseload on welfare to work was not materializing as expected. The program is not signing up people like expected.”
Got it? The money is not needed so Schwarzenegger is putting it elsewhere, and being blamed by the ranting poverty lobby for cutting childcare.
A consistently bizarre business columnist at the Los Angeles Times, who has the unusual attitude of being ignorantly anti-business, made the fascinating claim that Schwarzenegger’s budget is “a feast” of hidden taxes on the middle- and lower-income workers as well as the poor.
In fact, California has one of the most progressive tax systems — counting the hidden fees and all — in the United States. The state’s budget is propped up by massive taxes paid by a very small number of millionaires and multi-millionaires.
When I look at the budget from Arnold, and review what he said in his State of the State speech, and talk to solid advisors in his office like Palmer, I get a much different picture from all the complaining from every side and every political persuasion.
Here’s a governor who has buckled down to serious if unsexy work. He’s getting ready for a flu pandemic, restoring transportation funds, focusing on infrastructure, paying back the schools?
What about tax cuts, identity politics, gay marriage, illegal immigrants or the other favorites of the constituency groups? Remember all those wondrous wedge issues of the past year or so, that got the governor and the legislature a lot of TV face time but also got them nowhere?
Nope, Schwarzenegger has decided to be dull, centrist — and responsible.
Thus, the outrage has only just begun.