Tuesday, December 2nd, 2003


Spending Cap and Deficit Bond Debated in the Legislature

Governor Schwarzenegger met today with Assembly Democrats as part of ongoing negotiations on his proposals for a $15 billion deficit bond and a spending cap. He is pushing for the proposals, which were only proposed last week, to be approved by the end of this week.

The Legislature is currently focusing on these issues, and has temporarily postponed consideration of the Governor’s mid-year cuts, such as the 10% Medi-Cal provider rate cut and the cap on enrollment in Healthy Families and many other health programs.

The controversy over the spending cap now overshadows everything: while the proposed mid-year cuts are signficant budget battles to be waged, the war is around a spending cap. The Governor’s spending cap proposal would make all the cuts made in the past two years–and the $10-14 billion in additional cuts upcoming–permanent, without any ability to restore those cuts in better times.

An analysis about the spending cap will soon be available at the web site of the California Budget Project, at ATTACHED is one-page talking point list of why spending caps are particularly bad for health care.

HEARINGS: The Senate Budget Committee will convene another hearing tomorrow, WEDNESDAY, DECEMBER 3RD, at 1:00 PM to discuss the Governor’s spending cap and bond proposals. There will be an opportunity for PUBLIC COMMENT. Written testimony will also be accepted.

The committee held a joint hearing with the Senate Appropriations Committee today, which focused on the implications of a spending cap on Proposition 98 and education funding, but the conversation ranged widely, including on key ideological issues around the role of government, taxation, and the powers of the different branches of government. It did not, however, discuss the impact of health care on everybody.

The Assembly may probably hold a similar hearing on the spending cap and deficit bond issue on Thursday. More details to come.

MESSAGES: Here are some specific thoughts to convey:

1) WAIT FOR THE FULL PLAN, AND THE ANALYSIS OF ITS IMPACT: Don’t rush the Governor’s proposals in a week. Before we make the cuts permanent with a spending cap, we need to see what the $10-14 billion in cuts are. No vote should take place without an analysis of what the short- and long-term impacts will be of the cuts, and the spending cap. Let’s wait for the Governor to present his full plan before acting on any part of it.

2) A SPENDING CAP MAKES DRACONIAN CUTS PERMANENT, AND THEN CUTS EVEN FURTHER: The proposed spending cap would establish the baseline budget at a historically low level, after over $12 billion in cuts that have yet to be proposed. In essence, the spending cap would make every cut made to date, and in the next year, permanent, and would prohibit California from ever restoring those services in better economic times. A spending cap will prevent the state from meeting the needs of Californians, whether in education, the enivronment, health care, etc.

3) THE DEFICIT BOND MAKES THE PROBLEM WORSE: The bond just pushes California’s problems out in the future, forcing additional cuts later. California should not borrow to pay for a tax cut. That’s what the proposal does with the deficit created by the vehicle license fee reduction. The interest alone on the bond will force even greater cuts in education, health, and other vital services.

4) DON’T GIVE KING ARNOLD MORE POWER TO BULLY: Governor Schwarzenegger has already broken promises to children, seniors, and people with disabilties with his mid-year cut proposals. The legislature should keep him at his word, even if he won’t. He is proposing a massive power grab that would grant him new, unlimited powers to change in law and in funding almost unilaterally. Schwarzenegger was made governor in an election, not king in a coronation.

5) LET’S FIND REAL SOLUTIONS: The budget crisis will ultimately need a balanced solution, including cuts and revenues. The budget process is broken, and needs the solutions in the Budget Accountability Act, rather than now.

ACTIONS: Here are some specific actions for organizations to take:

1) SEND ORGANIZATIONAL LETTERS, on letterhead, opposed to the spending cap and deficit bond proposals, by Thursday. ATTACHED is a SAMPLE LETTER. Feel free to write your own, and FAX it to the Legislature ASAP.

2) Have organizational members and leaders CALL THEIR LEGISLATORS to oppose the Governor’s proposals.

3) If you have the ability, have your organization target the legislators that Schwarzenegger has targeted. He will be at events on Tuesday in San Diego, Thursday in Bakersfield, and Friday in Tracy. We need letters, calls and faxes in opposition to the targeted legislators: Senators Alpert, Ducheny, Florez, Machado, and Torlakson, and Assemblymembers Kehoe, Vargas, Parra, Matthews, Canciamilla, and Corbett. If your organization can participate in COUNTER-DEMONSTRATIONS, that would also be great.

4) If any local groups can do PRESS EVENTS to highlight the proposed cuts and to oppose the spending cap, that would be ideal. Recent events that have had real people affected by the proposed cuts to spotlight the proposed impact of the cuts and spending caps have been remarkably successful in attracting press attention. Over a dozen media outlets attended and covered each of the four budget-related grassroots press events in the past two days: On Monday, children’s groups in Sacramento; on Tuesday, Treasurer Phil Angelides in Sacramento; Health Access and twenty other groups in Los Angeles; and California Partnership in San Francisco. We need to keep the drumbeat up!

5) In order to demonstrate the impact of these changes, we need to IDENTIFY STORIES of people who would be impact by the proposed mid-year cuts and other things that are likely to be on the table. The press will want these stories this week and into the future.

6) If we can, we should OUTREACH TO LOCAL MEDIA. That means having members and leaders call to talk radio stations in opposition to the Governor’s proposals. That could also mean E-mailing letters to the editor, or local groups contacting editorial boards.

Anthony E. Wright

Health Access

1127 11th St., #234, Sacramento, CA 95814

Ph: 916-442-2308, Fx: 916-497-0921

Health Access California promotes quality, affordable health care for all Californians.
VIEW THE FILE Uncategorized

Leave a Comment

%d bloggers like this: