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It wasn't long ago that Republicans planned to try and amend the constitution so that Arnold could run for President in 2008. There was a whole ad campaign based around it and even political TV pundits were discussing it as if it had a chance.

Television ads supporting a constitutional amendment that would allow Gov. Arnold Schwarzenegger and other foreign-born citizens to run for president will begin appearing next week on cable stations across California, a newly formed group based in Silicon Valley announced Friday.

The ads feature Lissa Morgenthaler-Jones, a mutual fund manager from the Bay Area and major donor to Schwarzenegger's campaign, telling viewers: "You cannot choose the land of your birth. You can choose the land you love."

Arnold Schwarzenegger's quest for power and his cover up of his lovechild not only seriously hurt his own family to the core, but also destroyed California's state budget in the process. If it has become public he never would have been elected in that Daryl Issa cooked up recall nightmare and then he would have been toast against a badly run Democratic contender named Phil Angelides. Watching Arnold win his first election was as embarrassed to be a Californian as I've ever been. Electing The Terminator as a phony moderate Republican only highlighted the worst of this great state.

Digby writes: Cyborg legacy

The Republicans, Darrel Issa in particular, brought that circus to town but you can't blame it all on them. Californians made utter imbeciles of themselves during that ridiculous campaign all because Gray Davis was "boring" and they wanted a totally kewl Movie Star to be the Governor. It was an American Idol election of the silliest variety and it had very serious consequences for this state. But hey -- it's not like we didn't deserve what we got.

And it played out in the fight to save our state budget and the welfare of its citizens as he chose Norquist over his vaunted moderate approach. In 2009 I wrote that Gov. Arnold Schwarzenegger's budget cuts will finally finish off our state.
In 2010, Susie wrote: Arnold: I'm Not A Liberal Republican Though I Play One On TV. Aid to Women, Children Slashed in Newest Budget Cuts!

The extra cuts the governor made Tuesday -- $489 million -- took nearly $80 million that pays for workers who help abused and neglected children; $50 million from Healthy Families, which provides healthcare to children in low-income families; $50 million from services for developmentally delayed children under age 3; $16 million from domestic-violence programs; and $6.3 million from services for the elderly. Among other reductions was $6.2 million more from parks, which could result in the closure of 100, rather than 50, of California's 279 state parks.

In addition, Schwarzenegger effectively gutted a program that provides local governments with funding to encourage property owners to preserve open space and to use land for agriculture.

Ted Lempert, president of Children Now, an advocacy group, called the cut to Healthy Families "particularly galling." He said a coalition, including his group, is spearheading a campaign to put a universal children's healthcare measure on the fall 2010 ballot.

"A struggling family puts their kids first," Lempert said. "What the governor and what the state has done is the opposite."

Kevin Drum nails it by writing:

The reason the stories ran so late is because the special election was only six weeks long. If it had been any ordinary election, the Times would have spent far more time on its reporting and the story would likely have broken months before election day. In the event, though, the accusations were out work putting together a hugely complex story under tight deadline pressure. As far as I know, the accuracy of their reporting hasn't been seriously challenged to this day.

And what about Arnold? He insisted that this stuff was so far in the dim past that he could barely remember it. But it wasn't. Today we learn that he had cheated on his wife and had a child out of wedlock just a few years before. His megawatt-smile denials were pure pap, and if knowledge of his affair had been public it's almost a dead certainty that the recall would have failed and Gray Davis would have remained governor. The car tax would have stayed in place, no bonds would have been issued to make up for it, and California's deficit problems would have been less than half as bad as they turned out to be under Schwarzenegger.

That's what comes of running a politically motivated snap election with weird rules in six weeks: you don't really know what you're getting. In the end, the Times was right about Schwarzenegger, and his folksy boys-will-be-boys denials were lies. We've paid a pretty high price for that.

And the state of California will be paying a high price probably for decades to come.

This is more bad news for the state in the sun---run by Arnold.

From the WSJ: Big Banks Don't Want California's IOUs

A group of the biggest U.S. banks said they would stop accepting California's IOUs on Friday ... if California continues to issue the IOUs, creditors will be forced to hold on to them until they mature on Oct. 2, or find other banks to honor them.

...

The group of banks included Bank of America Corp., Citigroup Inc., Wells Fargo & Co. and J.P. Morgan Chase & Co., among others.

I guess the banks don't think the 3.75% annual interest rate is worth the risk for a "BBB" rated debtor on the Rating Watch Negative list.

What a mess.

Duncan has a plan:

As I've said, I'm not sure what the Feds should do for California, but perhaps having the Fed guarantee California's IOUs, assuming they have that authority, so that banks will cash them for their customers might not be such a bad idea. It's just a bandaid for the overall problem, but will help some pretty needy people who need the cash.

I asked for California to get a bailout from President Obama in an earlier post instead of the IMF because soon, the money will dry up completely. I know a bailout won't solve the problem because we have the most frakked up legislative process in the US and that needs to really, really, really be fixed. Conventional thinking is that if we were to receive help then we'll never fix the problem. I agree with that, but what happens when the state is broke and nobody will play with us? As for Arnold, I'll take a phrase that Chief Brenda Leigh Johnson of The Closer commonly uses: Thank you, thank you so much.

I am so glad I don't live in California, where propositions rule, an action hero pretends to be a governor and "no new taxes" is not a guideline but a fundamentalist state religion.

Reporting from Sacramento -- Gov. Arnold Schwarzenegger on Tuesday signed a budget plan sent to him by lawmakers to close the state's monumental deficit, using his veto pen to impose nearly $500 million in additional cuts.

The new reductions will affect child welfare and children's healthcare, the elderly, state parks and AIDS treatment and prevention, going beyond the dramatic cuts that were part of the deal Schwarzenegger negotiated with legislative leaders.

Democratic leaders in the Assembly and Senate reacted angrily to his use of the line-item veto, disputing the Republican governor's authority to wield that power in this situation and portraying him as callous.

Schwarzenegger's aides said the cuts were proper, and the governor said they were necessary.

"This has been a very tough budget, probably the toughest since I have been in office here in Sacramento," Schwarzenegger said. "This budget is kind of like the good, the bad and the ugly."

The good, the governor said, is that the plan does not raise taxes and includes changes he says will make government more efficient, such as reorganizing and abolishing some boards and commissions.

The bad are the deep cuts to state programs that will touch millions of Californians, particularly its most vulnerable citizens, he said.

The ugly, Schwarzenegger added, are the new reductions he made because lawmakers left town after failing to fully close the state's deficit.

The Assembly on Friday capped a 20-hour session by rejecting provisions worth $1.1 billion that had been agreed to by the governor and legislative leaders.

The extra cuts the governor made Tuesday -- $489 million -- took nearly $80 million that pays for workers who help abused and neglected children; $50 million from Healthy Families, which provides healthcare to children in low-income families; $50 million from services for developmentally delayed children under age 3; $16 million from domestic-violence programs; and $6.3 million from services for the elderly. Among other reductions was $6.2 million more from parks, which could result in the closure of 100, rather than 50, of California's 279 state parks.

In addition, Schwarzenegger effectively gutted a program that provides local governments with funding to encourage property owners to preserve open space and to use land for agriculture.

Ted Lempert, president of Children Now, an advocacy group, called the cut to Healthy Families "particularly galling." He said a coalition, including his group, is spearheading a campaign to put a universal children's healthcare measure on the fall 2010 ballot.

"A struggling family puts their kids first," Lempert said. "What the governor and what the state has done is the opposite."

It really is time for a constitutional convention in California. We can't live in this great state with such a destructive legislative process that has finally run us into the ditch.

If you want to understand how much insanity Prop 13 has wreaked on the state's revenues, just think about DisneyLand:

It's no wonder Disneyland's owners call their amusement park the "happiest place on Earth." For much of its land, Disney pays only a nickel per square foot in property taxes.

In Hollywood, Capitol Records pays a dime per square foot in taxes on the land beneath its famous tower, which resembles a stack of records on a hi-fi. In downtown Los Angeles, owners of the Wells Fargo Center pay about $1.77 a square foot.

And then the problem is compounded by having a hack like Arnold in charge.

It just gets worse and worse.

Today we witness the damage that the line-item veto causes in the hands of a right-wing governor bent on using it to achieve his long-desired destruction of public services. Arnold's vetoes include:

• An additional $6.2 million cut from state parks, which will likely cause as many as 50 more parks to be closed (potentially 1/3 of parks - 100 total - will now have to close)

• Elimination of state funding for community health clinic programs

• $80 million cut to child welfare services

• Total of about $400 million in health care cuts, including further Healthy Families cuts

• Elimination of funding for the Williamson Act programs to preserve farmland from development

• Deeper cuts to HIV/AIDS programs, as Brian noted.

• Cut 80% of funding for domestic violence shelters

• Elimination of funding for California Conservation Corps

• Cut half of Cal Grant funding, but could be restored "contingent upon enactment of legislation that authorizes the decentralization of the Cal Grant Program and other financial aid programs as warranted."

The state legislature could try and override these vetoes. But as we've seen time and again, this legislature appears to have forgotten that the override power actually exists. It would be a very good chance for Democrats to force Republicans to take a stand on these programs. Either they vote to restore the funding, or they vote to kick kids off of health care and close beaches and parks, giving Dems a set of issues to run on in 2010.

It seems doubtful that such an override will even be attempted. And so California slides deeper into ruin.

I have been considering a run at Jane Harman's seat, but seeing what's happening on the state level has really caused me many sleepless nights.

Digby weighs in:

I sure hope the wealthy won't have reason to tread beyond their gated communities for the next few years because it's going to be a disease riddled, environmental hellhole out here for the rest of us. I suppose they can have supplies helicoptered in and bring their "concierge medicine" behind the fences. They're going to need to.

It's going to be expensive, but at least the losers won't be getting things they don't deserve.

I saw Arnold Schwarzenegger being interviewed by John Harwood and he told him on CNBC I believe that " we missed the iceberg." No we didn't. The budget is a disgrace and Californians are going to learn the hard way what has happened in our state. Jobs and services will be slashed at an incredible rate and we;ll all suffer for it. Even if Arnuld thinks we missed the iceberg, the state is going to sink to the bottom of the ocean.

Calitics has more:

So the Assembly is wrapping up their budget session, and it turns out that the Assembly came up $1.1 billion dollars short of the Senate's solutions. Oil drilling failed, and the local government raid on HUTA (gas taxes) failed as well.

So where does that leave us? These bills will go to the governor, and since there isn't concurrence, it will be roughly a $23 billion solution rather than $24 billion. But, the Governor has a line-item veto. He can make various cuts with his blue pencil. But $1.1 billion? Who knows. That seems like a tall order.

Considering what Schwarzenegger did the last time a partial solution was handed to him, I guess there's an outside shot that he'll just say no and open a new extraordinary session. But he'll probably just line-item some, and maybe make up the difference by eating into what is now a $900 million dollar budget reserve.

Is everybody ready to be back here in October?

...We'll have a couple days for final analyses, but let's remember that this is a terrible budget and a dark day for California.

...Let me clarify. The Governor can make line-item cuts but he doesn't necessarily have to, because this is a budget revision. He can also shift around the size of the reserve. In the end, he doesn't actually have to be in balance for a revision; that's a Constitutional need at the beginning of the process, as I understand it, not now. Clearly from the Governor's remarks, he's not going to veto the whole thing, so this is the "solution," for now. There also may be Constitutional problems with some of the stuff passed.

Ezra Klein writes from his new gig at the Washington Post: Should California Get a Bailout?

That said, a lot of companies that proved too big to fail weren't too big to change. Wall Street was given compensation caps. GM had to renegotiate its labor contracts. If Washington is going to bail out the Golden State, it should make the money contingent on structural reforms that leave the state better able to balance budgets in the future.

This should be like an IMF intervention (maybe Simon Johnson has some thoughts?). California's legislature is in a strange position: It needs a two-thirds vote to raise taxes but also has to fund ballot propositions that require a simple majority of an uninterested public. The majority party in the legislature, in other words, can neither control how much money it raises nor how much money it spends. That's not a sustainable state of affairs

Howie Klein:

I think President Obama should direct his staff to think about bailing out California instead, and let the Europeans borrow the billions of dollars they need directly from the Chinese and leave us out of it. We have-- largely because of corrupt hacks like Rahm NAFTA Emanuel-- enough problems right here at home.

The Campaign Silo writes:

Funding the IMF: White House Should Honor Left’s Critique, Allow for Conditionality Review

Digby says:

"This bail-out for European banks by the American taxpayer is such a bad idea that they had to attach it to a "support the troops" emergency supplemental in order to get it passed.

Dear President Obama, please help California. We have a major league moron for a Governor and the 2/3 vote needed to make any substantial changes in the legislature is killing us. Stan Van Gundy's horrendous coaching of last night's Laker-Magic game is nothing compared with what we have to deal with.

For the life of me, I can't figure out California government. The state appears to be dominated by Democrats, yet the state government seems to take its plays right out of the right-wing Club for Growth playbook. And the proposition program seems like a recipe for disaster! I can't even tell who the good guys are:

Reporting from Sacramento -- Gov. Arnold Schwarzenegger and lawmakers scrambled Wednesday to avert a financial meltdown, and public officials across California braced for annihilating cuts on the day after voters trounced their leaders' rescue plan for the state.

Within two hours of returning from Washington, D.C., the governor huddled behind closed doors with Democratic and Republican legislative leaders to grapple with a projected $21.3-billion budget shortfall for the coming fiscal year and stop state government from running out of money by July.

But the Republican governor delivered at least a bit of good news: Obama administration officials had backed off their threat to rescind $6.8 billion in federal stimulus money.

The hacking of government began quickly, by the hand of a little-known state panel that sets elected state officials' pay. Citing a need for shared sacrifice, the group decided to reduce those salaries by 18% starting next year.

Otherwise, on a bright, clear morning in the capital, the most certain thing was the dark and angry mood of the voters. They had overwhelmingly rejected a package of ballot measures intended to produce about $6 billion through the middle of next year with taxes, borrowing and other means; limit future government spending; and bolster the state's rainy day fund.

Only a measure to punish elected officials by denying them pay raises in deficit years won approval -- easily.

Schwarzenegger, who alienated himself from fellow Republicans in February by reversing his pledge not to raise taxes, took the results as a mandate for the plan he unveiled last week to slash billions from education, healthcare, law enforcement and social programs, and to borrow $2 billion from local governments.

Now, voters get their say:

Reporting from Sacramento -- State lawmakers Thursday finally ended the three-month stalemate that brought California to the brink of financial collapse -- but now it is up to voters to keep the budget package from unraveling.

The spending plan, which wipes out a nearly $42-billion projected deficit with tax hikes, deep program cuts and borrowing, hinges on $5.8 billion contained in several ballot measures that voters must approve in a special election May 19. Gov. Arnold Schwarzenegger is expected to sign the package today.

There are any number of reasons voters may not cooperate. The four temporary tax hikes in the budget are substantial and the ballot proposals would prolong them. Polls show that voter disgust with the Legislature has reached all-time highs. Some well-funded special interest groups are already plotting campaigns against the measures.

"Given how disaffected voters are and how really disgusted they are, you might find all the ballot measures could get swept away," said Democratic strategist Darry Sragow.

Voters will be asked to wrest money from mental health services, children's programs and future lottery receipts. They will be offered the opportunity to constrain future state spending -- but only if the tax hikes just passed stay in place for four years instead of two. The failure of one or more of these measures could reopen a deficit.

Lawmakers and the governor are already looking nervously toward the campaign for the measures, even as they breathed a sigh of relief Thursday when the Legislature, in lockdown for a third straight day, finally passed a budget. The plan's approval halts the state's slide toward insolvency and allows officials to once again begin paying tax refunds, vendors and public assistance recipients, though those checks could be delayed several more weeks.

The California budget mess is rapidly turning into a full-blown crisis, thanks to being held hostage by some of the legislature's minority Republicans:

LOS ANGELES — The state of California — its deficits ballooning, its lawmakers intransigent and its governor apparently bereft of allies or influence — appears headed off the fiscal rails.

Since the fall, when lawmakers began trying to attack the gaps in the $143 billion budget that their earlier plan had not addressed, the state has fallen into deeper financial straits, with more bad news coming daily from Sacramento. The state, nearly out of cash, has laid off scores of workers and put hundreds more on unpaid furloughs. It has stopped paying counties and issuing income tax refunds and halted thousands of infrastructure projects.

Twenty-thousand layoff notices will go out on Tuesday morning, Matt David, the communications director for Gov. Arnold Schwarzenegger, said Monday night. “In the absence of a budget we need to realize this savings and the process takes six months,” Mr. David said.

And what seems to be the problem? This may sound familiar:

Democrats, who had already given into Republicans’ long-held dreams of large tax cuts for small businesses and for some of the entertainment industry and a proposed $10,000 tax break for first-time home buyers, balked at Mr. Maldonado’s request that the Legislature tuck a bill into the package that would allow voters to cross party lines in primaries.

“I think with an open primary, we would have good government that would do the people’s work,” Mr. Maldonado said.

The Party of No, faced with fiscal disaster, invariably holds out for political advantage. Faced with Solomon's decision, they will always insist on cutting the baby in half.

Paul Krugman warns:

Everyone should be paying attention to the political/fiscal catastrophe now unfolding in California. Years of neglect, followed by economic disaster — and with all reasonable responses blocked by a fanatical, irrational minority.

This could be America next.

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The Republicans in the California legislature are trying to close down the entire state. As everyone across America watches with awe how f*&ked up these idiot Republican politicians are acting, finally we hear someone step up to the plate and get at the root of the problem.

Lt. Gov Garamendi: I've been listening to what you had to say about Republicans in the Senate and Congress, we have an infection here and it's a Republican infection that's really spreading across this nation. Just what do they propose to do? Shut everything down? They did that with Newt Gingrich. They seem to want to do that in California and we're saying no way. no how. We're gonna build, we're going to go with Obama.

He linked these dead beat Republicans to the Newt Gingrich led Congress that got embarrassed by shutting down the federal government.

And Arnold Schwarzenegger gets a free pass from the California and national media time and time again. He was Enron's chosen boy to oust Gray Davis and he's almost single handedly led us down a path to ruin. The CA media needs to start looking in the mirror on this one.

And as the Garamendi explained, California has this super majority requirement on any vote that entails raising taxes in place that stalls all legislation.

We do have a two thirds vote....And then when you have Republicans that have taken a no new tax pledge and seem to just want to throw this state and really the nation into chaos and further decline in the economy, then we have the gridlock that we see. We need to change our constitution.

We need to hold these Republicans accountable...

It's a joke. California residents need to start taking action. We can't just sit around and watch these morons sleeping in their chairs because of obstructionist Republicans.

As Julia points out:

The 2/3rds rule is the reason why we can't pass a budget. We are one of three states that requires a 2/3rds vote. If we don't change that rule we will be right back here in 2010.

Cox and Moldanado are the ones to call. Here is our Moldanado action: http://couragecampaign.org/action/229/save-california-tell-senator-abel-maldonado-to-vote-yes-on-the-budget

They've received over a thousand calls. We can do better than that. Flood their lines.

UPDATE:

Sign the pledge to repeal the 2/3rds rule to pass a budget

Garamendi's plan of a 55% vote is way off base too.

..

d-day has an excellent post up about California's situation.

Arnold Schwarzenegger is irrelevant and a failure. State Democrats are spineless jellyfish. The death-cult Republican Party is a collection of flat-earthers bent on destruction. All well and good. Yet all of these discrete groups are enabled by a political system that does violent disservice to the people of the state and the concept of democracy. We must have a return to majority rule as soon as possible. For the sake of accountability...read on