George and the Governator

Lest anyone entertained doubts, now we know just whom our governor considers a special interest. No, it’s not agribusiness, which has contributed generously to Arnold Schwarzenegger’s coffers, nor the state’s Chamber of Commerce, which gave the guv a 100 percent rating last year.

It’s kids. Kids without money. Kids without parents who hold down a steady job.

I don’t mean to sound such a creaky Dickensian chord here, but the governor has just presented the most Dickensian budget the state has seen since Frank Merriam was governor back in the ’30s. In order to close the state’s chronic budget deficit — which he created roughly half of by rolling back motor-vehicle registration fees — Schwarzenegger proposed this week a budget balanced at the expense of children in poverty. He proposed cutting welfare grants by 6.5 percent, which would reduce the monthly check to a family of three from $723 to $676, and eliminating the annual cost-of-living increases in welfare benefits as well. Gives new meaning to the phrase "Kindergarten Cop," I suppose.

Arnold’s not entirely an inverse-ageist. To even things out, he also proposed a benefit freeze for the elderly poor and disabled. And for the working poor who take care of the elderly and disabled — that is, for the several hundred thousand home-health-care workers paid out of state funds — he proposed slashing their hourly wage from $10.10 to $6.75, the state minimum wage.

If you listened to Schwarzenegger’s artful State of the State address, of course, you probably didn’t think it was the indigent young and old whom he was gunning for. As onetime Clinton speechwriter David Kusnet has noted, it was a diabolically clever speech, in which Arnold positioned himself not as the scourge of government — Democrats and independents might not go for that — but as the enemy of politics, lobbyists, special interests, and self-serving legislators of both parties.

It was a brilliant ruse, brilliantly delivered. And it served to cloak the most purely ideological agenda the state has seen in decades. (Whatever Gray Davis’ sins, nobody ever accused him of being an ideologue.) The decision to forgo all tax increases — most especially, on California’s wealthiest residents, who are, for all intents and purposes, the planet’s wealthiest residents — in favor of spending cuts is a decision driven solely by ideology.

Raising taxes, Tom Campbell, Schwarzenegger’s new finance director, has said, would only encourage more state spending. But California is a giant, high-income, high-cost-of-living state that hasn’t invested heavily in state services or infrastructure since before the days of Howard Jarvis — that is, in nearly three decades. There are enough rich Californians in just five of the state’s 53 congressional districts alone — Henry Waxman’s, Chris Cox’s, Anna Eshoo’s, Mike Honda’s and Zoe Lofgren’s — to balance the budget by paying a slight increase on the state’s upper-end tax. At least, there are enough so that the budget wouldn’t have to be balanced at the expense of the impoverished-kid special interest.

The considerable irony here is that Schwarzenegger’s program is every bit as right-wing as that of George W. Bush, whom Californians despise. In a poll released Monday by the Survey and Policy Research Institute of San Jose State, just 42 percent of Californians approved of Bush’s performance, and a scant 39 percent approved of Bush’s handling of the economy. Schwarzenegger, by contrast, enjoyed a 60 percent approval rating in the poll.

But Schwarzenegger’s economics are of a piece with Bush’s. Just as Bush is proposing to set up private accounts and reduce the amounts that traditional Social Security will pay out to beneficiaries, Schwarzenegger is proposing to shift state employees from defined benefit pensions to 401(k)s. Taken together, these shifts would make retirement security dependent almost entirely on the performance of the stock market. Which is fine unless you retire at a time when the market is heading south.

By all accounts, the budget that Bush will unveil next month will be his most draconian — proposing cuts in Medicaid payments to achieve the fiscal discipline he squandered when he threw several trillion dollars at the rich in his three tax cuts. It sounds remarkably like the proposals Arnold put forth this week. And in going after unions, it’s Arnold who puts Bush to shame. Bush’s war on unions is taking place chiefly at the National Labor Relations Board, which is passing a series of discrete, and discreet, rules changes that will make it even more difficult than it currently is for workers to form a union.

For his part, Schwarzenegger has embarked on a frontal assault on public-employee pensions and teacher seniority. His goal is to weaken the most powerful constituency in the Democratic coalition — and to diminish the ability of the state’s public pension funds to pressure corporations in which they hold giant blocks of stock to behave with a certain amount of social responsibility. In recent years, the state’s pension funds have leaned on companies to invest where possible in California, and to refrain from despoiling the environment and abusing their employees. But to Arnold the ideologue, socially responsible capitalism just isn’t the genuine article, and damned if the state’s going to be a party to it.

Clearly, Californians aren’t lining up to back Bushonomics — but when Arnold rails against the special interests, many of the Californians who’ve had it with Bush give the Terminator the benefit of the doubt. Democrats need to strip Schwarzenegger of his good-government cloak and dramatize the gap between his ideology and the needs of ordinary Californians, a task best accomplished by putting forth initiatives to lower the cost of prescription drugs, hold the line on public-college tuition (perhaps through a dedicated tax on the wealthiest Californians or the state’s largest employers) and raise the minimum wage — all causes that the governor opposes. They need, too, to find in their ranks a suitable replacement for John Burton, the recently termed-out state Senate leader who fought with existential passion for the poor and who kept the governor last year from making cuts that would impoverish them further. Assembly Speaker Fabian Nuñez may be up to that task, even if he lacks the Burton genius for sheer, constructive rage.

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