State at Risk to Lose Billions

Republican-backed budget cuts moving through Congress threaten to hit California with billions of dollars in lost aid, putting some state social services in jeopardy and Gov. Arnold Schwarzenegger at risk of yet another political setback.

State and federal budget analysts say California, because of its reliance on some of the specific programs targeted, would suffer more in coming years than most states from the package of reductions approved by the House last week.

The bill includes provisions that, in California, would make it tougher to get child support from tens of thousands of deadbeat parents, would strip food stamps from legal immigrants, and would make less money available to doctors who treat low-income patients.

Amid pressure from Democrats in the Legislature, Schwarzenegger had sent an extensive letter to California’s congressional delegation earlier this month, expressing concern about the proposal’s impact on the state. Every California Republican in Congress voted for it nonetheless.

The spending bill was ultimately approved by the House, 217 to 215. While the Senate passed a smaller cuts package, that version would still cost California billions in the future. The bills now head to a conference committee, where members of both houses will attempt to reach a final agreement.

Republicans in Congress are pushing ahead with the budget reductions as they struggle to pare down the federal deficit while paying for the Iraq war, hurricane relief and an extension of the tax cuts championed by President Bush.

The governor, battered by the defeat of his special-election initiatives just weeks ago, is under pressure to draw concessions from Washington. Voters earlier this month rejected all four of the measures the governor had described as his agenda, including ones to reduce education spending and lengthen the probationary period for new teachers.

He has long promised to get more federal money for California, vowing that he would come to be known as the “Collectinator.” Democrats say his inability to garner votes from California Republicans in Congress suggests that he is failing.

News of the possible cuts in aid comes just as California itself is finally climbing out of the red. For the first time in five years, there was going to be no multibillion-dollar hole to fill in the draft budget the governor proposes in January. A significant loss in federal aid, however, would force the state to cut programs or raise taxes.

“The impact of this would be huge,” said Curtis L. Child, who in 2000 was appointed as the first director of the state Department of Child Support Services.

The bill passed by the House would cost California’s popular child support enforcement program $3.2 billion over the next 10 years. The Congressional Budget Office estimates that that cut, in turn, could lead to as much as $4.8 billion in child support payments going uncollected.

“You are sending the message to parents who don’t pay child support that they should take their chances,” said Child, now an attorney for the Oakland-based National Center for Youth Law.

California Democrats in Congress and the Legislature want Schwarzenegger to exert pressure on fellow Republicans in Washington to oppose the cuts. They accuse him of having wasted time campaigning for his special election measures and traveling through China with his business backers instead of working the hallways of Congress.

“If there was ever a time when the governor needed to focus his energy on what is going on in Washington, it is now,” said Assembly Speaker Fabian Nunez (D-Los Angeles). “He is doing the bare minimum. That is not going to get us anything.”

Administration officials take exception to such comments. They say the governor has been working furiously to protect the state’s share of federal money, directing his staff in Washington to lobby the congressional delegation and joining with the National Governors Assn. to campaign against the cuts. They say earlier efforts by the governor helped California capture tens of millions of dollars in new federal money to cover the cost of imprisoning illegal immigrants.

“That is such a bogus and transparent charge it is ridiculous,” state Department of Finance spokesman H.D. Palmer said. “The governor has made clear in nonpartisan terms how the House version of this bill would have a disproportionate hit on California and it needs to be fixed.”

Palmer said the Senate version would deliver a much softer blow to the state. It does not cut aid for child support enforcement or medical care for low-income Californians.

“This bill is a work in progress and has a lot of moving parts,” Palmer said. “We believe it is going to change. If not, the governor reserves the right to weigh in again after it goes through its next step.”

One Californian instrumental in pushing the cuts is Rep. Bill Thomas (R-Bakersfield), chairman of the House Ways and Means Committee. A spokesman said this week that the congressman is aware of Schwarzenegger’s concerns and that they will be taken into account as the conference committee attempts to hammer out a compromise.

But Thomas will be making no apology for voting for the deep cuts in aid to child support enforcement and other state programs, said his spokesman, Vince Fong.

“Congress was tasked to make progress on deficit reduction,” he said. “This package was a way to do that.”

Fong said the governor has a “good working relationship” with the California congressional delegation, but the spokesman declined to discuss any particular efforts Schwarzenegger has made to persuade Thomas.

Rep. David Dreier (R-San Dimas), a close ally of the governor, said in a written statement that “just as Gov. Schwarzenegger seeks to deflate a bloated state budget, we are doing the same in Washington.” Dreier accused congressional Democrats of offering no reasonable alternatives.

“While they play politics, Republicans are working with Gov. Schwarzenegger to achieve the best possible results for California,” Dreier said. “But the fact remains that the deficit must be cut, reforms must be undertaken, and the Congress will act.”

Local officials, meanwhile, are bracing for the impact of that action.

Philip L. Browning, director of Los Angeles County’s Child Support Services Department, warns that the House proposal would lead to his program being cut nearly in half.

“We are talking about a billion dollars’ worth of collections we won’t be able to make over the next 10 years,” he said. “It is just a huge amount of money coming out of the pockets of mothers and children.”

The California State Assn. of Counties signed a letter to California’s congressional representatives warning that the proposed cuts would “harm thousands of vulnerable California children and families.”

The final bill could cut federal aid to a number of programs in addition to child support enforcement.

The ultimate cost to the state, budget analysts say, could be as high as $1 billion per year. Among the other cuts on the table:

* Food stamps. As many as 11,000 legal immigrants in California could lose access to food stamps.

* Foster care. Congress is considering cuts in a program that seeks to place foster children with relatives instead of strangers whenever possible. County officials warned that the proposal would lead to 4,000 families becoming ineligible for assistance.

Other cuts in the bills would restrict the state from using federal money on programs designed to keep at-risk children out of foster care.

* Medi-Cal. New restrictions on how the program uses federal money could lead to cuts in subsidies for doctors who treat low-income Californians.

* Supplemental Security Income. New requirements would be placed on recipients of such aid. The Congressional Budget Office estimates that, nationwide, that would lead to 21,000 people losing assistance over the next decade.

* Temporary Assistance for Needy Families. The proposals would substantially increase the number of hours that welfare recipients, including single parents, must work, forcing the state to expand the availability of child care and employment training programs. The state’s nonpartisan legislative analyst’s office estimates that that would cost more than $375 million a year.

But the House bill authorizes only $40 million a year for California for those purposes.