California

The LA Times reports: In a letter to the Treasury Secretary, Gov. Schwarzenegger says the state may soon run out of cash without a $7 billion loan.

At least the 12 on the statewide ballot in California. And Robert Greene of the LA Times tells these stories.

California's elites are talking, and here's what they're saying: this governor can't get things done, the legislature is hopeless, the entire state government is dysfunctional. (OK, just because they're elites, they're not wrong. These are Western Elites, not the dreaded Eastern Elites who are being so, so, so unfair to Sarah Palin). The you know what has hit the fan. The only way to fix this is top-to-bottom reform.

So let's have a constitutional convention.

What does your blogger think? Put the convention in some place nice (Monterey, maybe, or how about Coronado?) and I'm there, live blogging every second. But while I hate to burst bubbles (OK, I enjoy the occasional bubble burst), I wonder if a constitutional convention is a realistic goal, and whether such a gathering might be more trouble than it's worth.

Take for example the two-thirds supermajority required for the legislature to pass a budget or raise taxes. That would be an obvious target of a major constitutional reform. And it would face fierce opposition from Republicans, who as the minority need the two-thirds requirement to remain relevant. Voters, who see Prop 13's supermajority requirement for taxes as sacred, also would object. But, under Article XVIII of the state constitution, the calling of a constitutional convention must begin with --  a vote of two-thirds of the legislature. Oh, bitter irony!

There are a lot of adjectives being used to describe the long-delayed California state budget passed in the wee hours of the morning on Sept. 16, few of them printable and none complimentary: “disgraceful,” “stop-gap,” “sham,” to cite just a few. But the most pertinent adjective now is “illegal."

A little history: In 2004, near the beginning of California’s long budget nightmare, newly elected Gov. Arnold Schwarzenegger, and most of California’s leaders, offered voters a two-part deal. Approve $15 billion in deficit borrowing to get the state through the budget crisis, the state’s grandees told voters, and then we “tear up the credit card.” Voters took them at their word. They approved both Proposition 57, authorizing the unprecedented borrowing, and Proposition 58, called “The California Balanced Budget Act,” forbidding the state from further deficit borrowing and making it illegal for the Legislature to pass, or the governor to sign, a budget in which spending exceeds revenue.

If Democratic legislators were willing to surrender and adopt a largely fictional budget based on hidden borrowing and accounting gimmicks, why did they wait until mid-September to do it? Such a gimmick-based budget could have been passed weeks ago, without the pain suffered by programs and people who depend on the state in recent weeks. Putting folks through that kind of difficulty, pain and uncertainty only makes sense if you have a strategic endgame that makes material improvements to the state's budget situation. But there clearly was no coherent strategy. There was merely a surrender--as this private email turned up by the Sacramento Bee makes clear.

As details trickle out this morning, the state budget compromise seems to be the worst of all worlds. It's not clear that it has the kind of strong budget reforms that can reduce the state's boom and bust cycle on revenues. (Democrats don't like those reforms). While it closes some tax loopholes, It doesn't have the responsible tax increases that could help balance revenues and spending. (Republicans don't like taxes). While there are some cuts, It doesn't have enough cuts to bring the budget into balance -- in fact, it raises education and health care spending. So what does it have?

The office of Assembly speaker Karen Bass says there's a tentative agreement between Democratic and Republican legislative leaders. A vote on a budget is set for Monday. Details to come.

We asked Leif Wellington Haase, director of New America's California Program, and Micah Weinberg, a research fellow in the California program, to update us on where health reform stands in California a few months after the state's major coverage initiative collapsed.

California Health Reform: Rekindling the Debate? Micah Weinberg & Leif Wellington Haase

Where Things Stand Today

The flame of comprehensive health care reform has been sputtering in California since the Senate Health Committee’s defeat of Governor Arnold Schwarzenegger’s proposal in late January. The conclusion of the regular legislative session in Sacramento hasn’t rekindled it.

"When Representative Tom Price spoke to the Roswell Kiwanians the other day, the first three questions concerned health care. When he appeared four days later before the Sandy Springs Rotarians, no one asked about it at all."

That's the lead on a New York Times story today on how health care is playing with voters. As Kevin Sack wrote, "Health care is an issue that can seem to vacillate in importance by the day, the place, and the audience." But he quotes Price, a conservative Republican physician from Georgia who holds Newt Gingrich's old seat, as saying that it's still one of the top three issues for every demographic group. While focusing on the presidential race, the piece also looks at how health care is playing out in congressional elections too.

We hope both parties keep talking about health care, because health care is one of those things where if there's no talk, it's unlikely that there will be any action. And just in today's news, here are some good reasons to keep talking:

1) Voters are confused. Very confused. They want to slow down health spending, but are having trouble figuring out which candidate would do what with which consquences. As Gary Andres writes in the Washington Times:

The governor and his aides are hitting back at the California Correctional Peace Officers Assn. -- the prison guards' union -- for its threat to recall the governor. A union official says the group is beginning the process of gathering 65 signatures on a notice of recall.

 So far, the Schwarzenegger strategy is to accuse the guards of using the recall to seek a contract that the cash-strapped state can't afford. According to the Sacramento Bee, Schwarzenegger said today: "I will not be intimidated by anybody that is demanding more money than the state can afford and that demands deals more than the state is wanting to give. So the prison guard union is not going to intimidate me with their kind of action."

The idea behind such a response is to try to keep the issue narrow--and focused on the prison guards' contract. Schwarzenegger and his team need to prevent others with grievances against the governor -- just about every interest group in the state has been at odds with him at one time or another -- from joining up. This response makes the recall seem narrow and small. It hints at what should be the first battle -- a behind-the-scenes effort by the union to build a coalition in support of a recall, and by the governor to prevent such a coalition from forming.

It's a far cry from the comprehensive health care overhaul California Governor Arnold Schwarzenegger envisioned just a few months ago, but the Republican governor and Democratic state lawmakers are negotiating three related bills that would regulate health insurers, specifically the meager policies sold in the individual market that can leave people with big gaps in coverage if they become sick, the Los Angeles Times reports.

About three million Californians buy their insurance in the individual market, which as currently structured often means they are getting scanter protection and bigger shares of their medical expenses than people who get their insurance through their employer. Schwarzenegger and the legislators are trying to negotiate legislation that would set minimum benefits (although not necessarily a standard benefit package), cap insurers' profits on these policies, and restrict insurers' ability to cancel policies retroactively, a practice known as rescissions, Times reporter Jordan Rau writes. The state recently banned health insurance companies from rewarding employees with bonuses for rescissions.