Gov.’s agenda stuck in standoff

The budget deadlock gripping the Capitol has put Gov. Arnold Schwarzenegger’s policy agenda in jeopardy, with prospects for bringing healthcare to all Californians or solving the state’s water problems dimming every day that lawmakers fail to pass a spending plan.

The impasse has brought legislative business to a standstill -- from the governor’s sweeping proposals to lawmakers’ efforts to enhance the quality of life for family pets. It threatens to transform what promised to be one of Sacramento’s more productive years into a flop.

“Everything has been put on the sidelines,” said Senate Leader Don Perata (D-Oakland). “No one would like to have a healthcare bill more than I would. But if we don’t have a budget, nothing else matters.”

Lawmakers are on summer break until Aug. 20, after which they will have only a few weeks left on the year’s legislative calendar. They could be called back earlier to vote on a budget if Perata can strike a deal with his chamber’s Republican leaders, who have been holding out for more spending cuts and changes in environmental laws. But that appears unlikely.

On Wednesday, as Senate Republicans renewed their latest demands, Perata shut down negotiations. And Assembly Speaker Fabian Nuñez (D-Los Angeles) said in a letter to upper house Republican leader Dick Ackerman of Irvine that he would seek to restore cuts already agreed to if the Senate did not accept the bipartisan budget the Assembly passed last month.

Both Democrats and Republicans acknowledged that the stalemate might doom any proposals now on the table in Sacramento.

“If we don’t have this thing resolved by the time we reconvene, we will not be doing any legislation,” Perata said.

Ackerman concurred: “We shouldn’t be doing other things until the budget is resolved.”

Lawmakers may not have the time to move other issues forward. Staffers, advocates and corporate lobbyists would normally spend August feverishly negotiating pending policy issues. But all attention is on the budget.

“Everyone is holding their breath and not moving on other issues,” said Barbara O’Connor, director of the Institute for the Study of Politics and the Media at Sacramento State. “It has a chilling effect on solutions to problems people were hoping would get solved this year.”

Indeed, Schwarzenegger had promised that this would be a big year for his administration. His ambitious proposal to overhaul healthcare, which would boost government spending by billions and include new fees on businesses, is a cornerstone of his “post-partisan” agenda and garnered him national attention. This summer, he traveled up and down the state promoting a package of water legislation that he vowed would take care of problems the state had ignored for decades.

But the governor has been unable to break the budget impasse. He tried to by promising to use his line-item veto to cut $700 million in spending that Republicans find objectionable. The offer failed to produce a deal. With no budget in place, Schwarzenegger left the state Friday for vacation and has been gone since.

As he headed out of town, his chief advisor on water issues said it was increasingly unlikely that the Legislature this year would heed the governor’s call to tackle a host of problems in that area.

“We had hoped to be working on that water package right now,” said Lester Snow, director of the Department of Water Resources. “Now we have no idea when the time will free up.”

Nuñez said he was planning to block passage of the water proposal, a priority for Republicans that involves borrowing billions of dollars to pay for infrastructure improvements. “It absolutely will not happen,” he said.

Throughout most of the year, Schwarzenegger treated the budget as a sideshow to pet policy issues such as prisons, healthcare and water. He left it to lawmakers to work out their differences on the $146-billion spending plan. But that didn’t happen. Meanwhile, the governor traveled out of state frequently, giving speeches on environmental policy and meeting with foreign dignitaries, among other activities.

After the Legislature missed its July 1 deadline to enact a spending plan, Schwarzenegger began to negotiate with lawmakers.

But by then, his ability to broker a deal was limited; both sides were entrenched.

By August, the governor started putting public pressure on Senate Republicans to back the Assembly’s budget, which largely mirrored the governor’s own spending proposal.

“Remember, we want to accomplish healthcare, we want to accomplish the water situation,” the governor said before leaving town last week. “And then the [political] redistricting is such an important issue that we want to take up. So there is a lot on the plate, so let’s not cut off those things because of the budget. Let’s just look at the whole picture and go to work.”

Schwarzenegger spokesman Aaron McLear said the administration had put all other issues aside. “We are completely focused on the budget,” he said.

Now, many of the policy advocates who have spent months working on healthcare bills are starting to panic. The window of opportunity for the state to change its healthcare system in a meaningful way is rapidly closing, they say.

Robert Phillips, senior program officer with the nonprofit California Endowment, is imploring lawmakers to continue working on healthcare reform despite the lack of a budget.

“Every day they have this impasse it serves as an excuse to avoid making hard choices they need to make to deal with broad healthcare reform,” he said.

But such calls for action are largely being ignored.

“There is only so much to go around in a legislative environment like this,” said Richard Brown, director of the UCLA Center for Health Policy Research.

The legislative environment has become deeply bitter. The Democrats who dominate lawmaking began punishing Republicans this week.

They removed Sen. Jeff Denham (R-Salinas) from his position as vice chairman of the Government Organization Committee, a coveted post they granted the moderate senator months ago as an olive branch across party lines. And the state Democratic Party launched a recall effort in Denham’s district.

Denham called the moves “scare tactics” to “make me fold.”

Meanwhile, action is being delayed on much more than healthcare or water -- issues also affected include education, street gangs and even a proposed ban on smoking in cars carrying children.

A bill banning trans fats in food sold at restaurants and bakeries may now disappear into the budget void.

So could a proposal to legalize the processing of hemp for industrial purposes.

“The only game played in center field here is the budget,” Perata said. “Until the budget is resolved, no one else gets in.”

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evan.halper@latimes.com

Times staff writer Patrick McGreevy contributed to this report.

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(BEGIN TEXT OF INFOBOX)

Key concerns

Status of legislation on some of this year’s major issues:

Healthcare overhaul: Separate proposals passed in Senate and Assembly. Governor’s alternative plan not yet in bill form.

Water: Proposals pending from governor and Senate leader to put major water package before voters. No action taken on either.

Prisons: Billions of dollars in borrowing for construction approved by Legislature and governor. Federal officials say more action may be needed to avert court-imposed population cap or takeover of corrections system.

Redistricting: Plans to change the way voting districts are drawn stalled in both houses of Legislature.

Source: Times reporting