Bloomberg News

California Democrats Say Brown’s Welfare Cuts Too Much

June 13, 2012

Democrats who control California’s Legislature, with less than 72 hours until the deadline to pass a budget, said they’ll stand their ground against the extent of welfare cuts that Governor Jerry Brown seeks to help close a $15.7 billion deficit.

The members of Brown’s own party propose an alternative to his budget that rejects about $1 billion of spending cuts in welfare, childcare subsidies, in-home health services and college grants for the poor. They’d pay for it by cutting reserves, shifting funds and making accounting changes.

“We are not looking for a fight with the governor,” Senate President Darrell Steinberg, a Democrat from Sacramento, told reporters at a Statehouse briefing. “But we will not shy from a fight if it is necessary to stand for the middle class, the poor and the struggling.”

Lawmakers in the most populous U.S. state must pass a budget no later than June 15 or lose their pay for each day they’re late. Democrats said they intend to vote before the deadline even if no deal with Brown is reached. That would allow them to keep their pay notwithstanding a Brown veto of their plan.

The 74-year-old governor has been meeting in private with top Democrats to negotiate a compromise spending plan for the world’s ninth-biggest economy. In a statement yesterday, he said the Democrats’ plan would only worsen the spending gap in future years.

Few Differences

Democratic leaders sought to play down the differences, saying they and the governor agree on 99 percent of the budget.

“The differences between the governor’s proposal and our proposal are bridgeable,” Assembly Speaker John Perez, a Democrat from Los Angeles, told reporters. “We’re not only on the same page as the governor -- we’re in the same paragraph.”

An impasse over welfare might imperil the governor’s chances of persuading voters in November to temporarily raise income and sales taxes to prevent $5 billion in cuts to schools.

The ballot measure would boost income taxes on top earners to the most in the nation, and raise sales levies that are now the highest of any state. Without the revenue, Brown threatens to cut $6 billion, most of it from education.

The governor also wants to slice $1.2 billion from health- care for the poor, $1.1 billion from welfare and in-home help for the elderly and disabled, and $500 million from courts. He’s also counting on lowering personnel costs by 5 percent, mainly by trimming workers’ hours.

Rainy Day Reserve

The Democrats’ plan builds a $544 million rainy day reserve into the budget, about half of what Brown proposed. They would reduce school funding by $330 million by using a different method of calculating how much schools are due and take $250 million more than Brown from tax money that formerly flowed to the state’s now-abolished redevelopment agencies.

The Democrats reject half of the $880 million in cuts Brown proposed to the welfare-to-work program known as CalWorks. The governor would require those receiving welfare to find work within two years instead of four, or forgo the aid. He’d also reduce by almost 30 percent the amount of money provided to families with children who are no longer eligible for welfare payments because of the time limit.

Democrats want to exempt families with young children from some of the welfare-to-work rules.

“We need additional structural reforms to cut spending on an ongoing basis, including welfare reform that’s built on President Clinton’s framework and focused on getting people back to work,” Brown said yesterday in a statement, referring to welfare changes under former President Bill Clinton. “Balancing the budget is critical to protecting education for the long term. We’re not there yet.”

To contact the reporter on this story: Michael B. Marois in Sacramento at mmarois@bloomberg.net

To contact the editor responsible for this story: Stephen Merelman at smerelman@bloomberg.net


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