The Worst Prescription for California’s Economy

In order to fill California’s $24 billion budget deficit, Governor Schwarzenegger has proposed a budget that would make severe cuts to spending on vital health and human services programs. In June, the joint Budget Conference Committee approved a budget that accepted some of the Governor’s proposals, made other spending cuts, and increased revenues.1 This brief describes the significant negative economic impacts of the proposals, especially with respect to health care. Due to the nature of public health care programs and the significant financial participation of the federal government, the negative economic impacts of the cuts are significantly greater.