Schwarzenegger Offers a Budget Path

John Wildermuth
Journalist and Political Commentator

When Assembly Speaker Karen Bass stomped out of a meeting with the governor Sunday night and boycotted a Big 5 budget session Monday, she complained that Gov. Arnold Schwarzenegger was pushing a laundry list of reform measures that have nothing to do with the budget.

But if Bass and other Democrats listen closely, they may hear the governor offering them a path to a budget agreement, even though it’s a road they won’t much like.

Schwarzenegger has been talking about the need to eliminate waste, fraud and abuse in state programs like welfare and in-home supportive services. He even brought in a posse of district attorney types from around the state Monday morning to share horror stories about the problems with IHSS, which provides in-home care for the frail elderly and disabled.

No surprise there. “Fraud, waste and abuse” is almost a mantra for Republicans and no few Democrats looking to show voters that they’re going to be tough with the government’s money. It’s a cry that typically fades away as soon as the polls close on election day.

Democrats use the phrase to describe where they’ll get money for new programs, while Republicans us it to show how budgets can be trimmed. It works wonderfully well both ways, since nobody actually has the faintest idea of how much money will ever be found in “fraud, waste and abuse.”

But the governor is actually putting a price tag on those savings. In Monday’s meeting, he said that that “fraud, waste and abuse,” can account for as much as 25 percent of the $4 billion to $5 billion annual budget for in-home supportive services.

“When you get rid of waste and fraud, there’s billions of dollars that can be saved,’’ Schwarzenegger said. “When we have savings here, then you have money and can balance the budget much easier.’’

It would be much, much easier to balance the state budget – and close that pesky $26.3 billion deficit — if the state didn’t have to use real money coming from real cuts or real taxes. As politicians have known for decades, money is much easier to find when it comes from estimated savings from estimates of “fraud, waste and abuse.’’

By putting a $1 billion number on those savings, that’s $1 billion less in budget cuts the lawmakers have to find. And if the governor can put another number on savings from welfare reform, it would ease the pressure for cuts even more.

What the governor seems to be saying to Democrats is that if he gets the reforms he wants, he’ll declare victory in the budget war and be willing to put his signature on a spending plan that may well be riddled with question marks – including what actual savings those reforms will bring next year.

From Schwarzenegger’s view, it’s a decent trade. Sure, it might kick the budget can down the road for another year, but you won’t find anyone in Sacramento who believes that California won’t be facing a serious financial crunch next June, regardless of what happens now. And if the reforms do work, that’s a legacy the governor will be able to point to.

It’s a tougher call for Democrats. They would love to pass a budget without slashing any deeper into education and safety net programs. But they also know that when Schwarzenegger talks about fraud in the IHSS program, he’s pointing his finger at some of the state’s nearly 400,000 home-care workers, almost all of them members of the public employee unions that are major backers of the state Democratic Party

For weeks, those unions have been holding rallies and slamming Schwarzenegger’s handling of the budget, which already calls for slashing pay for many in-home workers. The governor’s focus on IHSS fraud is “pure political theater,’’ Eliseo Medina, executive vice president of the international SEIU, said Monday.

But the reform battle is one Schwarzenegger is confident he can win, especially if it’s fought on his terms.

There are too many legislators, he said Monday, “more interested in protecting people who provide the services rather than those who receive the services.’’

That leaves the Democrats with a dilemma. They can go along with the reforms with the understanding that the governor will then sign on to a fast-track budget that saves many existing programs. Or they can keep fighting and hope Schwarzenegger backs down.

John Wildermuth is a longtime writer on California politics.

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