Governor Schwarzenegger deserves some quick and strong praise from conservatives for his first "opening salvo" on the 2010 state budget debate.  In today’s Los Angeles Times, reporters Shane Goldmacher and Evan Halper explain how the Governor has put forth some major negotiating points he will use with the legislature to work towards closing an estimated budget shortfall of over twenty BILLION dollars.  Governor Schwarzenegger has thrown down the proverbial gauntlet, making it clear that without money from the federal government, he will be advocating large and deep cuts in social spending programs.

Here is a relevant excerpt from the Times article:

If Washington does not provide roughly $8 billion in new aid for the state, the governor threatens to severely cut back — if not eliminate — CalWORKS, the state’s main welfare program; the In-Home Health Care Services program for the disabled and elderly poor, and two tax breaks for large corporations recently approved by the Legislature, the officials said.

Schwarzenegger also will propose extending a cut in the state payroll that is scheduled to expire this summer. That cut has translated into 200,000 state workers being furloughed three days a month, the equivalent of a 14% pay cut. Lawmakers would have the option of extending the furloughs, imposing layoffs or some combination of the two.

This puts pressure squarely on Democrats.  They control all of the purse strings in Washington, D.C.  While conservatives would say that a federal subsidy of an over-spending state like California is a bad idea, Sacramento Democrats are burdened by no so constraint on the proper function of the federal government.

So now we’ll see whether or not Senator Steinberg, Speaker Bass and Speaker-to-be Perez, Speaker Pelosi, and Senators Feinstein and Boxer can use their political muscle to save billions of dollars in welfare programs here in California.

The reality is that California currently has an unsustainable level of government spending, and absent this "federal bailout" more cuts will need to be made.  If the honest liberals in the legislature are mad or frustrated, they can focus their ire on the big union bosses who have created a new California upper class called pensioners — and the expense for this comes straight from limited resources that liberals could otherwise use for social welfare spending.

The Governor is also apparently proposing the elimination of some corporate tax breaks that were granted by the legislature as part of the infamously terrible February budget deal that smacked all Californians with billions in new income, sales and car taxes.  It’s likely that axing these will hurt, not help economic recovery.  But there is at least one school of thought that these "trophies" of the 2009 budget deal for big-business are ill-gotten gains.

The budget kabuki for 2010 will be a long and difficult one.  And look for the return of more items from last year — cuts to corrections, offshore oil drilling, and more.  Thanks to restrictive ballot measures and court rulings, the legislature has to try and balance the budget while being able to tap into only a portion of the state’s actual spending matrix.

Governor Schwarzenegger deserves praise for how he handling the pre-debate on the budget.  We’ll see what direction it all takes once the new year actually begins.   If Democrats want to give the Republican Party great Christmas present, they’ll swiftly respond to the Governor with a loud, empathic call for higher taxes — one which they will hopefully repeat over and over again all of the way to next November’s election..

This entry was posted on Wednesday, December 23rd, 2009 at 12:00 am and is filed under Blog Posts.