Majority Vote? Not so simple.

Loren Kaye
President of the California Foundation for Commerce and Education

Legislative Democrats and their allied interest groups are pressing the case to reduce the budget vote to a simple majority to avoid future standoffs. But be careful what you wish for.

In Washington, House Democrats are giving their majority vote authority the cold shoulder. As of Thursday night, the financial rescue deal is reported off track because House Republicans are insisting on a very different approach. Democrats could have approved the deal, reportedly signed off by the Senate and the White House, with a simple majority of the House, including about 50 Republicans. But instead of voting for it along mostly party lines, Democrats are insisting on a broader consensus that includes a majority of Republicans.

Would that circumstance never arise in a California budget debate?

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Reform…Reform…Reform

Joel Fox
Editor and Co-Publisher of Fox and Hounds Daily

Following a frustrating and record setting period before an unsatisfactory budget was signed, the Sunday papers were full of reform ideas on how California should change its governmental process and even the structure of government itself.

Fox and Hounds Daily preceded the Sunday discussion with a piece on our site Friday
by Jim Mayer, Executive of Director of California Forward. Mayer offered readers a glimpse into the dialogue his organization hosted last week on the budget process and governance problems and setting an agenda for reform.

In the “Conversation” section, Daniel Weintraub oversees for the Sacramento Bee, Weintraub and guest writers discussed different options for reforming government in California. Weintraub also listed an array of government reforms that have gained support in some quarters during the time of the stalled budget negotiations including majority votes for the budget, open primaries, changed term limits, and an expanded legislature.

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The Pink Elephant

Pete Peterson
Dean, Pepperdine University Graduate School of Public Policy

It was a shocking phone call. I had just finished speaking with a mortgage specialist at my credit union just over a year ago, and couldn’t believe what I was being told. My wife and I were looking at the possibility of buying our first home in West Los Angeles, and the dream that seemed so far out of reach suddenly looked realistic. “Are you sure we qualify for that much?” I asked the agent. “Yes, absolutely,” was her confident reply, “with your credit rating it should be no problem.” I had to go over the numbers several times to make sure she realized the mortgage she was offering would take nearly half of our combined salaries. The agent understood, but I still don’t.

As many know the current financial crisis finds most of its origins in the mortgage crash of the last couple years. Of course, those “Wall Street Fat Cats” share some of the blame, operating within a system that rewards risky investments (like packaged mortgages) when they pay off, but never penalize for a loss. In a recent radio interview, financial “talking head” Larry Kudlow put it this way: “A guy can make $20 million one year for making much more than that for his company, but nothing happens to him when he loses $50 million the next year.” He proposed a salary structure that would be computed over multiple year periods as a way of solving this perverse incentive scheme. This risk/reward scenario is obviously absent for most homeowners who are suffering under the weight of depressed housing prices and imminent foreclosure.

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McCain Must Inspire Confidence in Times of Crisis …Whether or Not Debate Occurs

Matt Klink
President, Klink Campaigns

As I’m writing this article, Friday’s debate at the University of Mississippi is still up in the air. Both John McCain and Barack Obama have returned to Washington – Senator McCain of his own volition after temporarily ceasing his campaign and Senator Obama because he was requested to return to D.C. by President Bush. Assuming the debate happens, here’s my take on the encounter’s importance and what John McCain must do to change the current situation in the polls.

For John McCain’s candidacy, every appearance with Barack Obama is important. The race has returned to where it was pre-Republican and Democrat convention. Senator Obama holds roughly a two percentage point advantage over the Arizona Senator and eight to ten states will determine the election.

While the topic area for Friday’s debate is foreign policy, the subjects that are actually discussed are irrelevant. What is important is the appearance John McCain projects and the messages he conveys.

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JP: Where are you when we need you?

David S. White
Principal of the Law Firm of David S. White & Associates, West Los Angeles, specializing in litigation, arbitration and mediation of real-estate-related disputes and litigation since 1977; www.dswlawyers.com

The stock market fell nearly 50% from its peak. One of New York’s largest trust companies was crashing and burning. Grown bankers cried.

Today’s news? Hardly. 101 years ago, America braved what they called then the Bankers Panic of 1907. It looked like capitalism, early 20th Century vintage, was circling the drain and ready to disappear as they then knew it.

One man, J.P. Morgan, stepped forward. The US had no national bank back then. Morgan convinced New York bankers to stand with him, to stand firm against the panic which endangered our financial system to its core.

Never mind what caused this collapse 101 years ago; all financial catastrophes are unique – each comes from its own set of factors, plus a bit of greed thrown in for good measure. Working all night, Morgan and other bankers injected some $8.5 million dollars in 1907 money to keep the giant Knickerbocker Trust from failing to pay its depositors and increasing the panic to oblivion settings.

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Getting Past Gridlock – Achieving Budget Reform

James P. Mayer
Executive Director of California Forward

A lot of us have been preparing for the day when the political and fiscal crises in California reached the point where substantive changes could be made. We may be getting close.

Based on the proclamations made Wednesday in Sacramento, it is clear that in terms of budget reform what the public wants also makes good policy, and that at least some political leaders are beginning to see the opportunity of the crisis.

The event, organized by California Forward, highlighted best budget practices from other states and the findings of in-depth public opinion research in California. Incoming Senate President Pro-Tem Darrell Steinberg (D-Sacramento), Sen. Mark Wyland (R-Carlsbad), Director of Finance Mike Genest, and Mike Rubio, chairman of the Kern County Board of Supervisors, described how they would like to see budget reforms advance.

Leon E. Panetta, co-chair of the bipartisan reform effort, ended the session by outlining the types of improvements that will be necessary to restore the public trust, and the consequences of failing that challenge.

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Shift in Thinking Needed to Deal with Financial Crisis

Joel Fox
Editor and Co-Publisher of Fox and Hounds Daily

Joel Kotkin, Presidential Fellow in Urban Futures at Chapman University in Orange, California and a recognized authority on global, economic and political trends, has written an interesting assessment on the financial crisis.

He argues that what is needed now is not a revolution against capitalism but a shift in emphasis back to the basics such as manufacturing, basic infrastructure and training critical skilled workers that a ‘real’ economy needs to encourage entrepreneurism and long term growth.

About California, Kotkin writes:

“California’s once envied water-delivery systems, roadways, airports, and education facilities are in serious disrepair. In the 1960s, infrastructure spending accounted for 20 percent of all state outlays, but as the technocratic perspective took hold in Sacramento, infrastructure spending fell to just three percent of all expenditures, despite the rapid growth of the state’s population.”

Read Kotkin’s piece on how America can grapple with the financial thicket here.

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PPIC Poll Previews Coming Heavyweight Policy Fight

Joel Fox
Editor and Co-Publisher of Fox and Hounds Daily

How will the next state budget crisis be avoided? Manypolicy experts, political pundits, and special interests have their own ideas.But odds are the solutions that will grab public attention will not contain anysubtleties or nuances. Opposing factions will likely support measures mosteasily understood by the voters.

I am talking about the old standbys: Make it easier to passa budget and raise taxes or cut spending.

I would argue that there is a third way. Get our fiscalhouse in order, cut taxes that will promote growth, and make Californiabusiness friendly. Taken together, I believe these actions will result in morerevenue for the state and that will happen in an economically smart way.However, making the case for this approach will take time.

So, that brings us back to those old standbys of raisingtaxes and cutting spending. Which in turn brings us to the new poll issued bythe Public Policy Institute of California.

The poll indicated that three-fourths of Californians wantmajor changes to the budget process. The survey tested whether reducing thetwo-thirds vote to 55% for passing a budget was a good idea or not. The surveyfound that 49% of residents and 46% of likely voters thought it was a goodidea. Those numbers are up slightly from a year ago. But it is important tonote that support is still under 50%. If initiative measures start under 60%,most consultants consider them a difficult gamble at best. Also, independents,a growing political force, are split down the middle on this question.

The PPIC poll also tested the idea of a strict spendinglimit. In that case, there is little ambiguity. By 62% to 31% Californiansthink a tough spending limit is a good idea.

These results indicate that if the Democrats move ahead withtheir two-third vote reduction plan for the budget (and taxes as well?) thatthey frequently mention, Republicans might respond with a spending limitinitiative.

If both measures appear on the ballot California voters willget a chance to set the direction for the state. Those three out of fourresidents who are irritated with the budget process will have an avenue toexpress those frustrations.

Looking at the PPIC poll, early in the game it seems thespending limit approach has the edge.

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3 Bad, 1 Good

Tom Scott
CA Executive Director, National Federation of Independent Business

No, it is not the title of an upcoming Clint Eastwood movie.

Now that the budget has been signed, we can all focus on the 800 or so bills that the Governor has to deal with by October 1st.  On the civil justice front, CALA would like to see the Governor veto the following legislation:

AB 437 Jones:  Would result in significant new employer liability and damages exposure in virtually any lawsuit challenging workplace decisions.

AB 2947 Eng:  Prohibits voluntary arbitration agreements between seniors and long-term care facilities.  This legislation only helps lawyers, not seniors.

SB 1113 Migden:  Would further tip the scales in the plaintiffs’ favor by expanding the scope of reimbursable costs to a victorious plaintiff.  This kind of expansion of cost recovery would only create new incentives to sue.

And now to the good news.  SB 1608 Corbett/Harman is on the Governor’s desk for signature.  CALA and a large coalition of supporters in the state strongly urge the Governor to sign this legislation.  SB 1608 is a bipartisan, comprehensive reform measure designed to increase disability access compliance while reducing unwarranted litigation under ADA.  While it might not be perfect, it will ensure that businesses are accessible and protect them from drive by lawsuits.

What a year it has been.  I sometimes wonder whether candidates running for the state legislature know what they are getting themselves into.  If you thought 2008 was a wild one, just wait until you see 2009.

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Shame On Us

Writer and Political Commentator

Shortly after it was clear that Democratic Senator Barack Obama and Republican Senator John McCain would be their respective party nominees, I was hopeful that we might see the most uplifting presidential campaign of recent generations. Senator McCain was a maverick, known for speaking his mind, even when his views differed from mainstream Republicans, while Senator Obama’s rhetorical style and message captured the imaginations of Democrats, independents and more than a few Republicans.

The stage was set. Everyone who wanted to see a substantive campaign was thrilled by the prospect of a series of 10 weekly town hall meetings. But it was not to be. Senator Obama refused Senator McCain’s invitation and both campaigns have since taken the low road, each blaming the other for "starting it," as if it matters who jumped in the mud first.

Senator Obama preemptively played the race card when he said- "They’re going to try to say, well, you know, he’s got a funny name, and he doesn’t look like all the presidents on the dollar bills" – was a low point, but was certainly matched by Senator McCain’s recent ads claiming Senator Obama wants to teach sex ed to kindergartners, knowingly distorting Senator Obama’s position. Of course, Senator Obama has no problem with distortion, deliberately ignoring context in claiming that Senator McCain wants to extend the war in Iraq for 100 years. Senator McCain came right back and attacked Senator Obama for saying, "You can put lipstick on a pig, but it’s still a pig,", insisting that he was talking about Governor Palin, even though Senator McCain used the exact same analogy last year in a Chicago Tribune article while discussing Senator Hillary Clinton.

Beyond overestimating the character of both candidates, I was also optimistic about the possibility of a meaningful campaign because the candidates positions are so different on so many substantive issues: Iraq, Iran, Georgia, Social Security, healthcare, taxes, free trade, abortion, education, stem cell research, etc. One of the reasons that Senators Obama and Clinton were reduced to debating for 30 minutes about a lapel pin is that their positions were indistinguishable for most of us. With Senators McCain and Obam,a, there is no such limitation, except for their self-imposed focus on the trivial.

After what the Bush campaign effectively ended Senator McCain’s 2000 run by spreading a rumor that the Senator had an illegitimate black child, one would have hoped that McCain would rise above making vicious attacks. One would have also hoped that, when Senator Obama said the time for change is now, experience be damned, use me as your vehicle for a new America, part of that change would be to run an honorable campaign. As so many of my friends predicted, I was wrong on both counts.

As disappointing as these candidates have been (and they certainly have to shoulder some of the blame for their actions), the real blame lies with us, the voters. We love negative advertising. We believe it, we listen to it, we send money to support it and, in the end, we vote based on it. Even worse, we deny it. We are a nation of people who don’t slow down to watch traffic accidents, but somehow traffic backs up for miles if someone pulls over to change a tire. I’ve never met anyone who watches Jerry Springer, but millions of people do and it’s not the fault of television executives. They air what people want to watch, it’s that simple. And sadly, political experts know that negative advertising works.

Spread some rumors that Senator Obama is secretly a Muslim or that Senator McCain has illegitimate children and people are only too happy to believe it. How many emails have you received detailing the evil deeds of one or both of the candidates? Most rational people hit the Delete key, but millions of Americans see these emails, make a decision and, if nothing good is on television come election day, go cast their votes. And their votes count the same as the votes of people who actually try to make decisions based on understanding the issues and the candidates’ positions.

If we hope to ever to have a substantive presidential campaign, fought between honorable opponents, it will start with us – the voters. Ignore the trash. Don’t forward the emails, and resist voting for candidates who appeal to the worst in us. Write letters and emails to the candidates, the parties and the stations carrying the attack ads, letting them know you’re tired of it. Until we demand better from our candidates, we will never have the quality elected officials we want, but will continue to get the ones we deserve.

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