(Stolen from BTB. Thx Doug!)

Looks like they’ve finally come to an agreement, but at the expensive of the poor and elderly.

From LA Times:

Gov. Arnold Schwarzenegger and legislative leaders announced Monday that they had reached a deal to close California’s $26.3-billion deficit and begin paying all of the state’s bills again, potentially ending months of partisan wrangling and a cash crisis that threatens to push California into insolvency.

Their agreement, which could go before the full Legislature within days, does not include any broad-based tax increases, relying instead on deep cuts in government services, borrowing and accounting maneuvers to wipe out the deficit.

So what about the elderly and poor? Well, from reading about the following cuts it feels like Schwarzenegger really got his way.

That’s not to suggest he doesn’t care about the elderly and poor, but cutting back on social services and allowing off shore drilling is a pretty big cornerstone of current fiscal conservative philosophy…

Tens of thousands of seniors and children would lose access to healthcare, local governments would sacrifice several billion dollars in state assistance this year and thousands of convicted criminals could serve less time in state prison. Welfare checks would go to fewer residents, state workers would be forced to continue to take unpaid days off and new drilling for oil would be permitted off the Santa Barbara coast.

By the way, that little bit about criminals serving less time? The estimates suggest that nearly 20,000 people will be released early. This isn’t necessarily a bad thing since sometimes more prison time leads to people becoming better criminals. Also, I’d imagine you could let the non-violent drug offenders go first.

Still, these cuts will hurt, and in a place as massive as California a lot of people can fall through the cracks. Now even more will.

After I read Matt Taibbi’s piece about Goldman Sachs gaming the oil/gas marketplace and wrote my own response, I started to think about the massive $24.3 billion budget deficit in California, and I wondered, “How could they get that far in the hole?”

Sure, the global economy has tanked the past couple years and revenues aren’t coming in like they were, but how can the gap be so vast? Because we’re not talking a couple billion dollars. This took some doing and I had a really hard time believing this was due to simple revenue shortfalls or excess expenditures on infrastructure, health care, welfare and schools.

Read more at True/Slant.

They’re seeing red in the Golden state.

From Reuters:

California’s controller said on Wednesday that he would have to issue IOUs in a week if lawmakers can’t quickly solve a $24 billion budget deficit, and the state’s treasurer plans to tap a reserve fund to meet debt service costs.

The measures came as a budget crisis deepened in the most populous U.S. state and the gridlocked legislature failed to pass a proposed $11 billion in cuts.

Why the gridlock? Because Dems want to makes cuts and raise taxes and Republicans won’t let them. They say that massive cuts need to be made, and that’s fair politically, but we’re getting into some pretty dire territory at this point and I don’t see how cutting health care and school funding is going to help California in the long run.

But back to the IOU situation…

“Next Wednesday we start a fiscal year with a massively unbalanced spending plan and a cash shortfall not seen since the Great Depression,” Controller John Chiang said in a statement announcing that he would be forced to use IOUs to pay the state’s bills beginning on July 2.

“The state’s $2.8 billion cash shortage in July grows to $6.5 billion in September and after that we see a double digit freefall,” Chiang said. “Unfortunately, the state’s inability to balance its checkbook will now mean short-changing taxpayers, local governments and small businesses.”

They say they plan to solve some part of it by issuing bonds, but that’s not as surefire as it once was since rating agencies may downgrade them.

No easy answers in this debate, but that’s where we’re at right now.

More as it develops…

California voters had their say and now Schwarzenegger is doing what needs to be done.

From Mercury News:

In a state that long has prided itself on its social safety net, it could well go down in history as the most drastic reduction in social programs ever. And billions in further cuts will be unveiled later this week.

The governor’s proposal to whack an additional $5.5 billion from state programs stunned even longtime Capitol-watchers with its blunt force. Ending cash assistance for 1.3 million impoverished state residents, for example, would make California the only state with no welfare program. [...]

The governor’s office reiterated that the cuts were painful but unavoidable, with the proposed budget for the 2009-10 fiscal year already outdated before lawmakers even begin debate. Schwarzenegger’s finance team now says the deficit will grow to $24.3 billion by July 1, up from the previous $21.3 billion projected shortfall.

Here are all of the proposed cuts…

So why is this happening?

Well, most of what you need to know is in this article. Basically, the blame is shared by both the citizens of CA and the government, and these cuts seem to be the only way to make things right. Spending must be reigned in since any new taxes or tax increases in California have to approved by a 2/3rds majority in both houses, and that’s an almost impossible feat.

More as it develops…

This was a bit of a surprise when I heard about it, but apparently Ted Olson has joined forces with the Equal Rights Foundation and they’ve just sent out a press release about yesterday’s decision.

Here are some key excerpts (.pdf) …

“Yesterday, the California Supreme Court said that the California Constitution compels the State to discriminate against gay men and lesbians who have the temerity to wish to express their love and commitment to one another by getting married,” Olson said. “These are our neighbors, coworkers, teachers, friends, and family, and, courtesy of Prop 8, California now prohibits them from exercising this basic, fundamental right of humanity. Whatever discrimination California law now might permit, I can assure you, the United States Constitution does not.” [...]

Today’s lawsuit argues that the California’s Constitution — as amended by Proposition 8 — violates the Fourteenth Amendment of the United States Constitution, a provision with which all state laws must comply.

Relegating gays and lesbians to “separate but unequal” domestic partnerships violates the U.S. Constitution, the suit states. California’s domestic partnership law is not an adequate substitute for access to the State’s institution of civil marriage, the suit states, because domestic partnerships do not provide all of the legal and government benefits and protections that marriage does.

“More than 30 years ago, the United States Supreme Court recognized that marriage is one of the basic rights of man,” the suit states, referring to the Court’s decision in Loving v. Virginia, which struck down bans on interracial marriage.

According to the suit, Proposition 8:

• Violates the Due Process Clause by impinging on fundamental liberties.
• Violates the Equal Protection Clause of the Fourteenth Amendment.
• Singles out gays and lesbians for a disfavored legal status, thereby creating a category of “second-class citizens.”
• Discriminates on the basis of gender.
• Discriminates on the basis of sexual orientation.

That’s a lot stronger case than I thought it would be, and maybe they’re right to challenge this one. But the key difference between Loving v. Virginia and this case is that racial identity is pretty much fixed, while it can be argued that sexual identity is not necessarily. Sure, we make sure folks can’t discriminate based on sexual orientation, but that doesn’t infer marital rights to those folks. Of course, then it gets into the idea that bisexuals should be allowed to marry whoever they want, and I’m obviously fine with that too. But there’s a difference and it will be brought up.

Also, common sense tells me that if the liberal CA Supreme Court voted against overturning Prop 8 by 6 to 1, does anybody think the US Supreme Court will overturn that? Seems highly unlikely, so they could be handing their opponents a very easy win. (Note: This case is different than the one the CA Supreme Court just decided. My apologies for the confusion, but it also means their case is MUCH stronger now.)

Regardless, it’ll be an interesting case and this could be a watershed moment for gay marriage…one way or another.

(h/t: Volokh)

Anybody who reads this blog knows where I fall on the gay marriage issue, but the Supreme Court of California wasn’t reallly deciding the validity of gay marriage itself, so the ruling was actually dead on in my opinion.

This article from Bloomberg points out why…

The court legalized gay marriage a year ago before California voters overruled it in November. Fifty-two percent of them approved the ban, amending the state constitution to recognize only marriages between a man and a woman. The court ruled 6 to 1 today in favor of upholding Proposition 8, saying it was ruling only on the ability of voters to pass a ballot measure rather than whether gay marriage should be legal.

“The principal issue before us concerns the scope of the right of the people, under the provisions of the California Constitution, to change or alter the state constitution itself through the initiative process,” the court wrote, “not to determine whether the provision at issue is wise or sound.”

Yes, it’s the law and it’s specific. And if they ruled against that provision, it would harm the citizens’ rights to amend the Constitution. That’s not a precedent the courts want to set just to prove a point.

But here’s the most important part of this entire argument…all the marriages that happened before the ban are legal!!!

The court ruled unanimously that the 18,000 same-sex marriages performed before the ban remain valid. The November ban sparked protests across California and led activists to create Web sites that identified individuals who donated money to support the measure and boycott donors’ business. The ballot measure overrode the court’s May 15, 2008, ruling that laws barring same-sex marriages were unconstitutional.

So to all of you gay marriage advocates, I know this seems like a loss today but it’s not.

Actually, this is a VERY big win as it signals continuous positive movement. Because you know there will be another ballot initiative to overturn Prop 8 at some point and it’ll pass and California will join the growing number of states where marriage is equal for all. But you have to get out there and fight for it if you want it to happen.

More as it develops…

This is a pretty big stake in the ground, because they’ll be using California’s standards…the toughest in the nation.

No doubt you’ll be hearing that this is bad for business, but that’s what they said about seat belts, airbags and every other time CAFE standards were raised. And I think we’re all fairly aware that the car companies who’ve prospered are the ones who offered the highest fuel efficiency standards the earliest.

From NY Times:

President Obama will announce as early as Tuesday that he will combine that state’s emissions rules with the existing corporate average fuel economy standard overseen by the Transportation Department, the officials said. As a result, cars and light trucks sold in the United States will be roughly 30 percent cleaner and more fuel-efficient by 2016.

The White House would not divulge details, but environmental advocates and industry officials briefed on the program said that the president would grant California’s longstanding request to implement its tailpipe standards. Thirteen other states and the District of Columbia have said they intend to apply the same rules. That request had been denied by the Bush administration but has been under review by top Obama administration officials since January.

Yet Mr. Obama is planning to go further, effectively issuing a single rule for both fuel economy and emissions that matches California’s strictest-in-the-nation standards.

Under the new standard, the new combined fuel efficiency standard for cars and light trucks will be about 35 miles per gallon by 2016, roughly in line with the California rule.

In my mind this is a smart move for many reasons, not the least of which is you diffuse the emissions standards argument immediately. Yes, it will upset states rights’ advocates, but how does it makes sense that a state should be able to determine whether or not certain pollution levels are acceptable or how much mileage cars can have in their locale?

In other words, there are some things that must be mandated by the federal government, and this is one of them. Our long term strategic interests, both for the environment and our dependency on foreign oil, rely on one set of standards across the board.

More as it develops…

This came as a bit of a shock to me, but Arnold is definitely one of the most moderate Republicans I’ve ever seen and is willing to take chances giving his unique position as a Republican Governor of a solidly blue state. Also, let’s not forget that the state voted to okay medical marijuana back in 1996, so it’s a little easier to do.

From Politics Daily:

In February a state lawmaker introduced a measure that would decriminalize marijuana in California. Assemblyman Tom Ammiano suggested regulating and taxing pot could pump $1.3 billion annually into the state’s shaky economy. He got a handful of headlines but the bill didn’t spark much debate and Ammiano was mostly portrayed as a fringe figure from kooky San Francisco.

On CNN a month later Rep. Loretta Sanchez (D-Calif.) said the state should launch a pilot program that would explore legalizing marijuana. Sanchez likened the issue to the prohibition of alcohol last century and said most Californians believe pot laws should be relaxed. (A recent Field Poll supports her claim: 56 percent of California voters say cannabis should be legal for recreational use and taxed). The interview made the blog rounds since it appeared to be the first time a national politician addressed the issue seriously on a mainstream media outlet.

Today an even bigger figure has taken up the discussion on whether to decriminalize and tax marijuana. California Gov. Arnold Schwarzenegger said it’s time to at least debate the issue. The Republican governor made it clear that he’s not for legalizing weed, but he doesn’t want to be afraid to talk about it.

First question…should marijuana be decriminalized?

Second…should Schwarzenegger just become a Libertarian already and shed the Republican label?

It could be a political ploy, but one never knows with Arnold…

From NY Times:

If Republican candidates for governor of California are hoping for an automatic high five from the sitting governor, they ought not to get too comfortable.

When asked Friday after giving a speech on health care in which he highly praised President Obama and other Democrats whether he would ever consider endorsing a Democrat to replace him, Governor Arnold Schwarzenegger said, “It could happen, yes.”

The governor offered no specifics on any particular candidate he might support.

Intriguing, yes? Because if a Dem can offer a much more centrist agenda, I genuinely believe that Arnold could endorse her or him, especially given the current political climate that Republicans are offering…which isn’t very positive.

More as it develops…

It’s happening a lot more now that other loans besides the subprimes are coming due.

From North County Times:

Ward Hanigan, a San Diego investor who purchases foreclosures, agreed that the longer foreclosure procedures produce artificially low inventory numbers, with no recovery in sight for the region’s housing market.

“It’s like an oil pipeline; it used to be five miles long and it’s been stretched three more miles,” Hanigan said. “So now it’s dribbling out until it gets full. And that’s what happening, it’s getting full. And then it’s going to gush.”

Default notices shot to new highs in areas of Carlsbad, Rancho Bernardo and Rancho Penasquitos. On the other hand, notices in foreclosure-prone neighborhoods such as Oceanside and Escondido were below peaks reached earlier.

In fact, one region of Rancho Bernardo saw more default notices in March per 1,000 homes than Oceanside’s 92057 ZIP code —- the most foreclosure-prone neighborhood in North County over the last two years.

But in Southwest Riverside County, there was no indication of a plateau for the most foreclosure-prone areas.

A ZIP code in Temecula shattered the regional high for most default notices in a month with 252 in March, cementing Southwest Riverside’s status as the leader in foreclosures locally. By contrast, the most default notices ever seen in a North County ZIP code was 127 in north Oceanside’s 92057 in July 2008.

No doubt this is happening a lot more in places where speculation ran wild, but in locales like my stomping grounds of Kansas City…prices have remained fairly steady. Maybe it’ll hit us eventually, but maybe we just didn’t have as many people acting irresponsibly and buying more house than they could afford.

Thoughts?

For years I’ve been arguing that the government should simply get out of the institution of marriage all together, and some folks in Cali are trying to put that idea into motion.

From The Herald:

California’s top election official gave two Southern California college students the go-ahead Tuesday to start collecting signatures for a proposed ballot initiative that would end marriage as a state-sanctioned institution.

Ali Shams, 22, a senior at the University of California-San Diego, and Kaelan Housewright, 21, a student at the California Institute of the Arts, want all couples to be eligible only for domestic partnerships, the designation now reserved for elderly couples and same-sex couples who can not legally wed.

The two friends, who say they are straight, submitted their proposal to the secretary of state in late December in response to the gay marriage ban that California voters approved in November.

Their constitutional amendment would repeal the ban, known as Proposition 8, and strike the word “marriage” from licenses, tax forms and other state documents while retaining the rights and responsibilities of marriage for domestic partners.

“The purpose of which is to provide equality amongst all couples, regardless of sexual orientation, without offending the religious sect,” the pair wrote in their application for an initiative title and summary. “Legally speaking, ‘Marriage’ itself would become a social ceremony, recognized by only non-governmental institutions.”

This is the type of compromise our country desperately needs on this issue. After all, the idea that government is essentially sanctioning a religious ceremony has always been a slippery slope, and this initiative addresses it a direct and honest way. And yes, there are some other laws that would need to be changed, but the ball needs to get rolling and solution has to be found. Now more than ever.

The initiative needs almost 700,000 signatures by August 6th so if you’re in Cali and you believe in this, try and find out how you can add your name to the list or volunteer.

The biggest economy in America is now suffering from double digit unemployment.

So what about underemployment? Well, that’s probably closing in on 20%.

Just thought you should know.

After formulating a budget compromise with Democrats and a handful of dissident Republicans, Governor Arnold Schwarzenegger skipped the party’s state convention in Sacramento and headed to a Governor’s conference in Washington, D.C.

Undoubtedly, that was a wise move on his part. Schwarzenegger is going to be termed out of office so he does not need Republican support next year. Many of the GOP’s party faithful have had it with Schwarzenegger, anyway. They feel he has betrayed his campaign promises and Republican principles by supporting a tax increase.

Yet, even in the extraordinary times facing California, Schwarzenegger maintains close to a 50% approval rating, suggesting that independents and Democrats make up a considerable portion of his base.

One delegate at the convention, fed up with Schwarzenegger, even circulated a petition apologizing for the recall of former Governor Gray Davis.

“Therefore, be it resolved that the California Republican Party officially extends a heartfelt and sincere apology to former Governor Gray Davis for its role in recalling him from office.”

The Republican Party rejected the apology, but that it was even considered is noteworthy.

The fate of the six dissident Republicans, who broke party ranks to support the budget compromise, remains unclear. Many want to punish them, further alienating the party from most California voters. A few others, such as State Insurance Commissioner Steve Poizner realize there are more important things to do.

“The California Republican Party is in trouble. We have to do some serious rebuilding,” Poizner said.

(from Foolocracy.com)

The state is so cash strapped that they’re giving their residents $3.5 billion worth of IOUs on tax returns and making workers go without pay two days out of the month, as mentioned in the title above.

From AP:

State agencies scrambled in the days before the furloughs took effect to avoid confusion for the public, such as people trying to register vehicles or obtain professional licenses.

Among the offices to be closed Friday are those of the Department of Motor Vehicles and Department of Consumer Affairs. The governor’s Office of Emergency Services also would be dark as part of a cash-saving move ordered by Gov. Arnold Schwarzenegger.

Critical and revenue-generating agencies were scheduled to remain open, including fire stations, parks and employment centers that process unemployment insurance claims. California’s unemployment rate is 9.3 percent, a 15-year high.

Schwarzenegger ordered the two-day-a-month furloughs, reducing the average state worker’s salary by 9.2 percent, as he and lawmakers try to solve the state’s $42 billion budget shortfall.

As we all know, California is by far one of our biggest states and has a lot more consumers than most. So what do you think that 9.2% reduction in the average state worker salary is going to do to consumption? What do you think that $3.5 billion in tax refunds IOUs will do to personal spending?

And yet what I’m hearing from many of you in the comments is that states are basically just faking this and it’s all overblown. They just want some pork.

Well folks, here’s the reality.

The economy has shed over 3 million jobs in about a year’s time, and it’s hit states like California particularly hard given their size. And now they have an unemployment rates of 9.3% and an underemployment number (which is a better judge of the employment picture) that’s easily getting close to 15%. So they simply don’t have the revenue to provide the services that they need.

Long story short, they need help and fast.

But you keep convincing yourself that the 1% of the stimulus bill that the Republicans are making hay over is important enough for them to not support it. Because this economic meltdown didn’t happen on their watch or anything. They didn’t have a nice little surplus when they came in and turned it into trillions of dollars worth of debt. They didn’t spend money on a war that was absolutely and completely unecessary.

No, better to say you’re “sticking to your principles” and make fun of tax breaks for Hollywood (which literally make up .0003% of the bill’s spending). Because, after all, we can’t add onto this massive debt! Why…that would be irresponsible! What about our grandchildren? But if you’re proposing tax cuts, well, that we can talk about…

Moving on…

Christopher Beam of Slate talks about the recent seismic shift in the House Energy and Commerce Committee.

Out: Rep. John Dingell of Michigan, the tough, cantankerous eminence grise of the House Democratic caucus (he’s 82), who was so deferential to Detroit as chairman of the House energy and commerce committee that Lee Iacocca once said he “stood up for the auto industry beyond the call of duty.”

In: Rep. Henry Waxman of California, the tough, mustachioed eminence slightly less grise of House Democrats (he’s 69) known for his relentless investigations and aggressive proposals for combating climate change.

Barack Obama’s own transition team could not have hoped for a better outcome. In fact, there are signs it did more than just hope.

Dingell’s ouster came after the Democrats’ Policy and Steering Committee voted 25-22 in favor of Waxman’s candidacy. In charge of the steering committee is Waxman’s fellow California Democrat, House Speaker Nancy Pelosi. And ousting the leader of the House’s most powerful panel—environmental issues, health care, and consumer protection all fall under commerce’s purview—is generally not done without permission from the top.

Of course, there is another explanation…

Maybe Dingell knew that his time to protect the auto industry was over, that climate change legislation was on the way in and Waxman needs to be chairman of the committee in order to get that through.

And since Dingell is from Michigan, there’s no way he could lead that charge and represent his ailing constituents.

What do you think? Could Dingell have fought this fight but decided not to?

Essentially, get the government out of the business of religious marriage, and instead create civil unions for all that are legally recognized by the government. That way you have a clear separation of church and state.

Kmiec makes the point within the framework of California’s Prop 8 debacle and tells us what Schwarzenegger should do…

The governor has administrative authority to have regulations issued interpreting family law, and nothing in Prop. 8 precludes him from ensuring that homosexual and heterosexual couples are treated equally under state law so long as he stays clear of “marriage.” This could be accomplished by limiting the state of California prospectively to the issuance of civil unions for all couples, rather than marriage licenses, leaving marriage, which in origin is predominantly a religious concept and not the real business of the state, to religion.

To convince both sides to come to the table, the governor’s ruling should:

– Eliminate any doubt as to the validity of same-sex marriages undertaken between the time of the Supreme Court’s judgment and the effective date of Prop. 8. This is only fair because the proposition did not clearly state that it would be retroactive. People are entitled to have confidence in the law as it exists today without having to anticipate how it might change.

– Reaffirm the unfettered freedom of religions (not the state) to be either in favor or opposition to same-sex marriage as their doctrine teaches.

Folks, this is the way we can fix this and I hope if California pulls it off, other states will follow. It makes no sense why government is involved with religious marriage, and the sooner we move towards civil union as the legal framework, the better.

Well, they ruled on it once this year and looks like they’ll have to do it again thanks to the passage of Prop 8.

From AP:

The California Supreme Court on Wednesday accepted three lawsuits seeking to overturn Proposition 8. The amendment passed this month with 52 percent of the vote. The court did not elaborate on its decision.

All three cases claim the ban abridges the civil rights of a vulnerable minority group. They argue that voters alone did not have the authority to enact such a significant constitutional change.

My question, how have things changed since now and then? And didn’t the opponents of gay marriage account for this? So what will they do if the Supreme Court overrules Prop 8?

More as it develops…

“This dialogue about ‘we have to go back to our core values.’ What is that? How far does ‘core’ go back in history in America. Thirty years? Fifty years? Because we know that Teddy Roosevelt talks about universal healthcare. I think it’s all nonsense talk.”
- Arnold Schwarzenegger on This Week with George Stephanopoulos

Looks like Obama could have a great friend in California. Because not only is Schwarzenegger talking up universal health care, he’s also behind Obama’s plan for a rescue package for the Big 3 and is even asking for money for states.

I agree on all accounts.

These are uniquely challenging times and they call for creative, bold solutions. Just letting massive companies like this fail when virtually nobody is buying anything doesn’t make sense because the market is essentially broken and not supporting any business, much less businesses that make high price items like cars. Especially when we can set specific conditions for the loans that fit into our long term strategic goals.

And obviously we’re not advocating action just for the sake of action. We’re saying specific things need to be done because letting things run their “natural” course could have devastating consequences, particularly for the middle class.

In short, the term “domino effect” has never been more appropriate. Schwarzenegger gets that. I wish I we were able to convince more of this too.

I agree with both of them, but Ashton more so. The idea that people voted on somebody else’s rights and relationships is crazy.

In the end, I wish the government would get out of the business of marriage and set up a separate civil union system so people could have all the legal rights of marriage without the religious ties. And then people can go get a marriage in a church if they so choose.