A remarkable political debacle here in California points up the intransigence and hypocrisy not infrequently demonstrated by the far right wing of the Republican Party. This anti-government faction, empowered by a quirk in California's constitution, after months of insisting on closing the state's chronic budget deficit with cuts alone -- without any borrowing or, gasp, taxes -- succeeded in blocking honest tax increases proposed by Democrats and Governor Arnold Schwarzenegger. But failed in their cuts-only approach, resorting to borrowing by accounting gimmick and, literally, by lifting money from the pockets of Californians through accelerating tax withholdings from salaries.
And so Schwarzenegger, as I reported he would early today on New West Notes, has just issued the first gubernatorial veto of a state budget in California history. And these supposedly fiscally conservative Republicans are vowing to join with Democrats to override his veto.
The right has this power in California, if it hangs together, through the state's unusual requirement of a two-thirds legislative vote to pass a budget. Only two other very small states have the same requirement. And with gerrymandered districts, most Republican legislators are very conservative. Meaning that the big blue state on the blue Pacific is having a hard time funding its Democratic programs.
The latest Field Poll shows how unpopular and unrealistic the far right stance was with the big majority of California voters. Only 19% of the state electorate agreed with their cuts-only approach. Two-thirds agreed with the Democrats and Schwarzenegger that some combination of new taxes and cuts would be best. Virtually no one thought that more borrowing would be best. This, of course, is the approach that has been employed in Washington for the past seven-plus years by the Bush/Cheney administration.
And it has similarities to the fiscal policies promoted by John McCain. He says he wants big tax cuts for the wealthy, and for corporations, as well as some targeted industrial policies to stimulate the economy. Where would that money come from? More borrowing.
In reality, even the far right didn't have the stomach to try to impose what would be made necessary by their long expressed rhetorical insistence on a cuts-only budget. Though they are forcing big cuts in health and welfare programs. And what California's Republican holdouts dictated on their majority Democratic colleagues is a very thinly veiled form of massive borrowing.
This budget, as a Los Angeles Times editorial points out, "borrows in spades, even though lawmakers would rather use words like "revenue acceleration."
What does that mean? Well, what it means is that these fiscally conservative members of the Republican far right are insisting on increasing income tax withholding. That means that Californians will get a bigger chunk of their paychecks taken away by the government. They'll get the money back in the future, in the form of tax refunds. Or so the Republicans say. In any event, it's an interest-free loan, taken by force by the state government. At the insistence of supposed free marketeers.
It's not a lasting solution, of course, as the revenue is ultimately evanescent.
There's more such hypocritical gimmickry, but you get the gist.
So Schwarzenegger has issued the first budget veto in California history. And his fellow Republican legislative leaders, almost of whom are much conservative, elected from districts crowded with voters who don't blanch at Young Americans for Freedom backgrounds, are vowing to supply the votes to override his veto. Along, seemingly, with the Democrats, who after a record 76-day budget impasse, mainly want to get out of town without losing any more for their constituents.
Of course, Schwarzenegger is hardly blameless. California's chronic budget crisis was fed in part by his first act as governor: The extraordinarily popular decision to cut the car tax, which, nevertheless, could and should have been more than offset by a combination of revenues and reforms.
The offsetting things haven't happened.
Which, if nothing else, has allowed the hypocrisy and intransigence of California's far right to bloom in full public view.