Governor Defends Health Care Plan in Face of Budget Shortfall
Gov. Arnold Schwarzenegger's (R) assertion that his health care reform plan would boost California's economy has met uncertainty from lawmakers and budget analysts who are concerned over the state's rising budget deficit, the Los Angeles Times reports (Rau, Los Angeles Times, 11/10).
Last week, the governor directed state agency leaders to slash spending by 10% for fiscal year 2008-2009.
State revenue is coming in below projections, in large part because of the decline in the housing market and related drops in state income tax revenue. California's budget deficit for the upcoming fiscal year could be as high as $10 billion (California Healthline, 11/9).
In a speech Friday at the Latino Coalition for a Healthy California Conference, Schwarzenegger said he "totally disagree(s) with" requests to delay health care reform and instead focus legislative efforts on the budget deficit. He added, "There is a real correlation between fixing the health care system and fixing our budget."
However, Assembly Speaker Fabian Núñez (D-Los Angeles) said, "I don't think" the governor's health care plan is "going to have a profound effect as an economic boost to the state budget" (Los Angeles Times, 11/10).
Núñez unveiled a revised health care reform plan last week along with Senate President Pro Tempore Don Perata (D-Oakland). The plan more closely resembles the governor's than an earlier Democratic health care reform proposal did, but differences remain over employer contributions and how to finance subsidies.
The Democrats favor a tobacco tax increase, while Schwarzenegger has proposed leasing the state lottery (California Healthline, 11/6).
The funding mechanism would go before voters on the November 2008 ballot.
Assembly Minority Leader Mike Villines (R-Clovis), who opposes the governor's health care plan, said that "it's a stretch to argue that a tax increase and a large government-run system is going to be a benefit to the state budget that we're coming into."
Núñez said he agreed with the governor that a deal on health care reform must be made this year before lawmakers face "harsh decisions" over budget cuts.
However, if Schwarzenegger's health care plan is enacted, it would not take effect until 2010, two years after the state will have to face 2008's expected $10 billion shortfall.
Moreover, the Legislative Analyst's Office warns that California could face $3.2 billion in additional costs under the governor's $14 billion health care plan.
The governor maintains that his plan would pay for itself, but budget cuts to programs such as Healthy Families could make it tougher to enact the plan, according to the Times. Healthy Families is California's version of the State Children's Health Insurance Program.
Shawn Martin, director of the health department for the Legislative Analyst's Office, said if Schwarzenegger's assumptions were incorrect, "it would create ... more of a budget problem, but there's no way of knowing" (Los Angeles Times, 11/10).
Video and a transcript of the governor's speech are on his Web site.
Summaries of editorials and opinion pieces regarding health care reform in California appear below.
- Contra Costa Times: The health care plan by Democratic legislative leaders "is riddled with problems that illustrate why health care reform is such a difficult task," a Times editorial states. "If that means waiting until next year for a better health care plan, so be it," the editorial states, concluding, "It is far better to put together a better plan later than to pass a significantly flawed one now" (Contra Costa Times, 11/11).
- Monterey County Herald: Schwarzenegger "was celebrating" the Democrats' health care plan "even though he knows full well that the state is having trouble paying for existing health programs," a Herald editorial states. The proposed tobacco tax increase "would cover the new health programs for a while, but probably not forever," according to the editorial (Monterey County Herald, 11/11).
- Steve Burd/Joe Hansen, Sacramento Bee: "We are optimistic that over the next several weeks California's elected leaders will blaze the trail for the rest of the nation by reaching consensus on meaningful health care reform that bolsters the economy, covers everyone, drives down costs and increases the quality of health care," Burd, CEO of Safeway and chair of the Coalition to Advance Healthcare Reform, and Hansen, international president of United Food and Commercial Workers Union, write in a Bee opinion piece. "Finding a comprehensive solution to this crisis is critical to the financial and physical health of employers, workers and families throughout California and the nation" (Burd/Hansen, Sacramento Bee, 11/11).
- Dan Walters, Sacramento Bee: Democratic legislative leaders and Schwarzenegger "may be approaching the dangerous phase" in health care reform negotiations "in which the urge to get something done overcomes common sense," Walters writes in his Bee column. "It's time for those involved to step back, take deep breaths and stop this madcap rush to do something just to say they did something," Walters writes (Walters, Sacramento Bee, 11/11).