McCarthy Sees Peril in Feud Between Governor, Honig

Times Staff Writer

Lt. Gov. Leo T. McCarthy said Wednesday that the running feud between Gov. George Deukmejian and state Supt. of Public Instruction Bill Honig has "deteriorated rapidly" and could lead to such political polarization that the bitter battle over school funding may never be resolved.

"We ought to make every effort to thaw out the ice that exists between them," the Democrat said during a breakfast session with The Times Sacramento Bureau.

As one solution to the current controversy over tight budgeting, caused in part by a state spending limit, McCarthy suggested that the governor appoint a 12-member commission of California business leaders to study the spending limit and determine what should be done about it.

On a strictly political matter, McCarthy said he will decide by May whether to run for the U.S. Senate next year against Republican Sen. Pete Wilson.

Weighing Decision

"I am very actively weighing whether I should become a candidate for the Senate (in 1988) or wait and become a candidate for governor (in 1990)," McCarthy said.

Although McCarthy conceivably could run for the Senate next year and--if he lost--also for governor in 1990, he said that "probably I would need to marshal all of my resources to go after (just) one target."

McCarthy said that a major consideration in running for the Senate is whether he can raise the necessary money. He said that California's two Senate candidates last year--Sen. Alan Cranston and former-Rep. Ed Zschau--each spent around $13 million.

As for Deukmejian, McCarthy said that while he currently is "riding the crest" of a popularity wave, he faces long-term budget problems. And voters are beginning to ask, he said, "why aren't you repairing our roads? Why aren't you paying teachers more money? And why aren't these prisons being built fast enough?"

Rigid Positions

McCarthy said positions have become so rigid between Deukmejian and Honig, and between Democrats and Republicans in the Legislature, that an independent blue-ribbon commission "is the only way we move off dead center on this."

The state spending cap, approved by voters in 1979, restricts government appropriations to a formula based on the percentage increase in population and cost of living or on the percentage increase in personal income, whichever is less. The problem, McCarthy said, is that budget requirements for highways, schools and prisons are growing faster than either population or personal income.

"Do we need to modify (the limit)? Is personal income a proper added ingredient in the formula or do we leave it alone?" he asked. "You've got to create a dialogue, and the governor alone can do this by appointing a commission that takes it out of the hard-line Democratic-versus-Republican kind of contention."

Public Policy

But as long as public policy problems are viewed as disputes between Republicans and Democrats, McCarthy said, "we are not going to get anywhere."

"There is going to be a stalemate. People will feel they have set political positions to defend," he said.

Taking a relatively safe middle course, McCarthy said he thought a 12-member commission was the solution because recommendations by a nonpartisan panel of respected business people with "impeccable credentials" would be received more favorably by the governor than proposals from Democrats.

McCarthy also said he believed that the commission would ultimately recommend a modification of the limit.

"I would think that most business people would not take the position that, 'Hey, we've got a good enough highway system that we don't need to keep investing in it,' or, 'Yeah, we're going to have 900,000 more kids in classrooms in a few years, but let's make do with what we've got,' " he said.

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