July 30, 2007 (LPAC) - Having failed to pass a budget by the June 30 deadline, and with Governor Schwarzenegger under fire for having "abandoned the process," key California State programs are threatened with shut-down by next week, and there is no end in sight to the stalemate. The basic problem, as widely reported, is that the Republicans in the California Senate are united in opposition to the budget passed by the Assembly. The ostensible sticking point is less than $1 billion in expenditures: GOP Senators have drawn a line, and are refusing to pass the budget unless at least another $800 million is cut.

The reality is different. Schwarzenegger is pursuing the script written by fascist George Shultz, who is committed to imposing fascist austerity on the state, while ripping apart the social safety net, just as Shultz's previous puppet, Operation Condor's General Pinochet, did in the Shultz-Rohatyn experiment in Nazi economics in Chile. Schwarzenegger is playing the soft cop, letting the GOP Senators take the blame; but the stalemate is already having real consequences, by default.

Without a new budget, the state's $2 billion emergency fund for Medi-Cal has been depleted. By this Thursday, a scheduled $227 million payment to hospitals and nursing homes will not be made. This will be "disastrous," according to C. Duane Dauner, the President of the California Hospital Association, as it will hit "rural, public, children's and other safety net hospitals." Among those effected will be 6,000 developmentally disabled individuals, whose care depends on payments from Medi-Cal. There are also warnings that funds are short for firefighting -- a dangerous prospect, given the year-long drought -- and for road repairs and new transportation projects.

The Senate Republicans insist on further cuts, including $324 million from welfare, which will cause more than 40,000 families to lose state assistance. They are also demanding cuts in public transit funds.