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Schwarzenegger: No leadership during budget negotiations -- vacationing in Sun Valley

Arnold, the RINO

I have made no secret of my disdain for Arnold Schwarzenegger, the RINO (Republican In Name Only) governor who acts more like a liberal democrat than the fiscally responsible conservative Republican he initially portrayed. His leadership skills were honed in Hollywood where striking poses and looking like a hero is possible only with good writing and the assistance of smoke and mirrors.

As a not so funny joke, members of Schwarzenegger's own party once wore name tags to a budget meeting to emphasize the fact that he spent more time with liberal democrat social engineers and spendthrifts than he did with his own party faithful.

Fundraiser extraordinaire …

Of course, nothing was allowed to interfere with Schwarzenegger’s fundraising – setting new records that surpassed those of Gray Davis whose only talent was 24/7 fundraising and courting special interests. Schwarzenegger even went one step further, creating special non-profit foundations where funds were raised to fund the governor’s travel as a jet-setting movie star. Claiming that his travels did not cost the people of California any money, he conveniently overlooked the fact that much of the contributed money came from special interests who do not believe in charitable contributions. The foundations resisted listing their donors – and the whole thing stinks to high heaven.

So why is it no surprise that the Governator is building a campaign fund – possibly to run for the Senate in 2010. And why is it no surprise that the state is facing a major fiscal crisis while the Governor suns himself on the slopes of Sun Valley, Idaho where he keeps another residence.

And he’s up to his old tricks of borrowing and papering over the immediate deficit …

From the Sacramento Bee …

Schwarzenegger seeks more borrowing, new tax increase

“Aides to Gov. Arnold Schwarzenegger rolled out a new plan for closing California's gaping $40 billion budget deficit today that cobbles together elements of earlier proposals and adds a new tax increase and a "what if" quest to borrow $4.7 billion.”

Now its $40 BILLION instead of $14 BILLION and the governor doesn’t have the balls to present the program himself.

" ‘We are facing a major crisis, probably the most challenging budget situation the state has ever faced,’ said Mike Genest, Schwarzenegger's finance director. ‘The governor believes in acting immediately.’"

So where is the Governor … showing at least some symbolic leadership?

Schwarzenegger is out of state and vacationing at the family residence in Sun Valley, Idaho. But Genest and a half-dozen Finance Department staff members briefed reporters on a plan that incorporates a proposal of spending cuts and tax increases the governor made earlier in December.”

“That plan called for a temporary increase in the state sales tax, expanding the sales tax to cover some services, a nickel-a-drink alcohol tax, a new tax on oil production and a $12 hike on vehicle registration fees.”

“Cover some services?”

This is a massive expansion of taxation as previously exempt labor services from hairdressers, auto mechanics, veternarians and other service professionals will be taxed.  In a state with record high taxes (Only proposition 13 caps prevent California from being the state with the highest taxes), these taxes add insult to injury as they will be used to fund the profligate spending of an out-of-control legislature – something Schwarzenegger promised to address when he was first elected 5 years ago.

Spending cuts?

“It also called for $15.4 billion in spending cuts, including requiring state employees to take two-days-a-month unpaid furloughs through June 30, 2010 and give up two paid holidays each year.”

First, the unions have threatened to sue Schwarzenegger if he attempts to interfere with existing union contracts and furloughs union workers.

And second, spending cuts are not always real dollar spending cuts. To my way of thinking, a spending cut is reducing the amount of money you are actually spending below what you have previously spent. Not simply a reduction in the amount of bloated budget items. 

Papering over the deficit with stolen funds backed by bogus IOUs …

“The new elements include reducing the dependent care exemption on state income tax returns from the current $309 per dependent to $103; carrying over some of the deficit into the 2010-11 fiscal year; borrowing funds from voter-created programs that service the mentally ill and pre-kindergarten children's health services; changing the operating rules for the state lottery in an effort to make it more profitable, and borrowing $4.7 billion from the private sector.”

Once again, the governor is attempting to kick the can down the road past 2010 so he can claim some victory when he campaigns for the United States Senate. But there is nothing of substance here: borrowing designated funds (such as the $2 BILLION generated from tobacco money for pre-schools) and leaving a state IOU is commonplace. Pre-kindergarten children’s health services are not a state responsibility, they are a parent’s responsibility.

Notice that nowhere does the governor say he would cut payments to illegal aliens in favor on insuring that the legal residents of the State of California have the funds to insure their public safety and healthcare.

The democrats never met a tax or spending opportunity that they did not like; hence the term “tax and spend democrats …”

“The first two of these would require legislative approval. The third and fourth would also require voter approval. The fifth, Genest said, would require the financial market to get much healthier than it is now, and the state to have both a balanced budget in place and a ‘plausible’ plan to pay the money back.”

Anything which raises taxes and shifts the budget burden to the people without decreasing the funds available for special interest projects, the unions and the illegal aliens is fine with the democrat-controlled legislature. The plausible plan has always been to increase the taxes to cover borrowing.

" ‘It's a massive shortfall,’ Genest said. ‘It's the kind of shortfall that cannot be addressed by waiting until July 1 to enact a budget. We have to act immediately.’"

If it’s so damn important why are the legislators and the governor on holiday?

Plan du Jour …

“The new plan - the latest of at least four iterations of a deficit-cutting proposal to be trotted out by the governor and legislative factions - covers both current budget year, which ends June 30, the new fiscal year that starts July 1.”

“It proposes to close the $40 billion deficit and create a reserve of about $1.6 billion by making $17.4 billion in cuts over the next 18 months; increasing taxes by $14.3 billion; banking on an extra $5 billion in money from the lottery and borrowing about $5 billion.”

So how did the governor legally sign an out-of-balance budget – after delaying the signing past the deadlines mandated by the California Constitution?

How did the budget deficit suddenly surge from $12 -$16 BILLION to $40 BILLION under the fiscally conservative governor?

“The plan envisions that state spending on general operations in the current fiscal year would drop from the $103.4 billion approved by legislators and the governor last September to $92.4 billion. In the fiscal year that starts next July 1, general fund spending would amount to $95.5 billion.”

We must be insolvent? And these people are too stupid or too political to solve the problem as they admit failure …

“Genest acknowledged that the sorry state of the U.S. financial market, coupled with the inability of lawmakers and the governor to make a deal on closing the deficit gap, meant it was impossible for the state to borrow any money now by issuing Revenue Anticipation Notes (RAWs). But he also said the budget gap is too huge to close through spending cuts or tax hikes alone over the next 18 months.”

What Does Revenue Anticipation Note - RAN Mean?

Also called Revenue Anticipation Warrants (RAWs), RANs are defined as:  “A short-term debt security issued on the premise that future revenues will be sufficient to meet repayment obligations” <Source>

Some things seem to be off the table …

Dump services to illegal aliens and let them self-deport. This would amount to a minimum savings of at least $10 BILLION dollars – possibly $20 BILLION or more when you consider savings from education, healthcare and judicial programs. Go back to the voters to authorize a reduction in education money to deal with a declining enrollment. Dump the least productive state workers just like private industry.

This is B.S. …

" ‘It's just so monumental,’ he said. "As you go through our solutions, you'll see these were really difficult choices. These are substantial tax increases, these are major program reductions."

Politically difficult maybe, really difficult – no way.

Pie in the sky?

“Genest said the plan envisions that the economy will have improved enough by July and lawmakers and the governor will have reached some comity on the deficit to make issuing warrants possible then.”

Smoke and Mirrors?

Revenue Anticipation Notes are securities based on projected income. More financial engineering from the Wall Street Wizards who have crashed our economy.

“The advantage of RAWs is that they do not have to be repaid in the same budget year that they are issued but can carry over into the 2010-11 fiscal year.”

Bottom line …

So while Californians are experiencing a depression, our budgetary system is in shambles, our infrastructure is in desperate need of repair or replacement, our leader is enjoying himself in Sun Valley. Something we should all remember when he claims to be fighting hard for the people.

What can YOU do?

Refuse to play a part in this shell game and re-call or do not re-elect the morons that put us in this position. Demand that the governor reduce the $134,000 salaries of the recently appointment members of the Integrated Waste Management Board to $75,000 without any perks or health insurance. If this is to be a full-time position, hire professionals instead of termed-out legislators.

Refuse to accept Schwarzenstupid ’s bogus global warming initiative which amounts to a massive tax hike on the people and the creation of derivatives similar to the subprime mortgage derivatives which crashed the economy.

Regard Arnold Schwarzenegger for what he is: a narcissistic, ambitious, Hollywood creation. A movie star playing the part of a Governor. Compared to Ronald Reagan, this schmuck is not even qualified to hand out the programs in the theatre. Let him return to Hollywood where I will continue to enjoy his screen performances – knowing that my $20 ticket is voluntary and I can leave if I don’t like the movie.

Be well and be safe.

-- steve

Quote of the day: “The nice thing about egotists is that they don't talk about other people.” -- Lucille S. Harper

A reminder from a large improvement can result from a small change…

The object in life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane. -- Marcus Aurelius

Reference Links:

Schwarzenegger seeks more borrowing, new tax increase - Sacramento Politics - California Politics | Sacramento Bee

Capture12-31-2008-2.04.21 PM 

Schwarzenegger is  having fun  ... are you?

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