Los Angeles, Sept. 18, 2008 (LPAC) - The continuing escape from the real world known as the "California Budget Crisis" is going strong into its eighth week, with signs that the rotten deal, which was hyped by the press over the weekend, has broken down. That "deal" was based on massive cuts in social services, totaling $9 billion, combined with idiotic gimmickry, centered on a 10% increase in state taxes for the immediate months ahead. The "revenue acceleration," as it was called, would cover some of the remaining $6.2 billion in the deficit, to be "repaid later," as the state's economy improved!
Gov. Schwarzenegger vowed to veto this compromise, which was passed with the necessary 2/3 vote by both the Assembly and the Senate. His objection is that he has not been given the discretionary power that he has demanded: the right to make mid-year cuts, without consultation with the legislature, if the revenue drops; and full power over the "rainy day" fund, so that it is not spent during "good times."
The Democrats balked at giving him those powers, for good reason, i.e., that he would use them for massive cuts in social services. When this was put before the voters in 2005 as a referendum, they defeated it, with the LYM leading the charge against it, dubbing the initiative the "Make Arnie the Dictator Act."
The initial reaction to his threats to veto the budget was that Democratic and Republican leaders had the votes of 2/3 of the legislatures to override his veto. However, that momentary consensus appears to have broken down, as of this morning, as Republican legislators, who have been hammered by anti-tax freaks in their districts, suddenly discovered that "accelerated revenues" really means "increased taxes," so a number of them are leaning toward accepting Arnie's veto, and are demanding more budget cuts.
The state controller's office has put out a warning that he will have to go to credit markets, which are already stressed, due to the financial blowout associated with Lehman, AIG, etc., for short-term loans, to pay for ongoing state expenses, as the state is running out of cash. The prolonged period without a budget, now approaching 80 days, means that cuts have already been imposed, particularly in Medi-Cal expenditures, which means doctors, clinics and hospitals are not being reimbursed for care they are delivering. Medical officials and doctors have put out repeated warnings that this means people will die, but Arnie - with the support of many of the state's newspapers - is continuing to hold Californians hostage, saying, in effect, that he will use their suffering to force the legislature to give him the dictatorial powers he needs, to impose fascist austerity. The same editorial writers which are praising Arnie for his "toughness and fortitude," by not giving in to a compromise, continue to cover up the connection between the state's budget crisis, and the melt-down of the U.S., and world, economy.
