Budget Plan Rejected in Assembly : Legislature: Republicans block Democrats’ $55.4-billion spending proposal. State is in fiscal paralysis for a record 20th day.

Republicans in the Assembly, staunchly backing Gov. George Deukmejian, blocked passage of a Democrat-drafted, $55.4-billion state spending plan Thursday in a floor session dominated by tense and vitriolic debate--and plunged the Legislature into further budget paralysis.

The lawmakers, capping weeks of futile efforts to reach a bipartisan solution, set a record for ineffectiveness by leaving the state without a budget for a 20th day into the new fiscal year.

The initial vote on the budget was 41 to 26, strictly along party lines, which left the spending plan 13 votes short of the 54 votes needed for passage.

The debate leading up to the vote was unusually personal, underscored by accusations from Democrats that Republicans are refusing to respond to the needs of a growing, dynamic California and are forcing the state to back away from commitments to the poor.

At the heart of the impasse is a proposal by Deukmejian to cut spending to close a $3.6-billion revenue gap, with most of the money coming from education funding and programs serving children, the poor, the elderly and the sick.

Democrats, hoping Republicans would meet them halfway, put together the spending plan that was before the Assembly on Thursday. It calls for $1.7 billion in spending reductions, including a freeze on welfare benefits and payments to the aged, blind and disabled, along with about $1.3 billion in tax and fee increases. Despite the cuts, the state budget would grow by more than 10% under the Democrats’ plan.

Los Angeles Democrat Maxine Waters, the backbone of the party’s liberal wing, fought back tears as she recounted her own childhood on public assistance to illustrate how difficult it was for her to vote to freeze welfare benefits. Waters said she would compromise no further, describing the budget Democrats came up with as “a bad, stinking rotten budget.”

“I fight for poor children because I was raised on welfare,” Waters said. “There are a lot of poor children out there who deserve our support, who deserve to be able to eat, who deserve to be able to sleep. I’m going to fight for those children.”

Assembly Speaker Willie Brown (D-San Francisco) told other lawmakers that he too “lived in the public housing projects” and said Republicans “have no idea what it is to live on that side of town.”

Assembly Republican Leader Ross Johnson of La Habra, in turn, urged Democrats to consider the tax burden on middle-class Californians who even now “are struggling to make ends meet.” He argued that unless the state undergoes a major retrenchment, the Legislature will be forced into a continuous cycle of tax increases.

Johnson said “the kind of budget growth” proposed by Democrats “simply cannot be sustained” by the state’s take from sales, income and other taxes.

With rejection of the plan by GOP lawmakers, Democrats now say responsibility for passing a budget is with Deukmejian and his Republican allies in the Assembly. Republican legislators in the Senate last week joined Democrats in approving a combination tax increase and budget reduction plan similar to the one before the Assembly, but GOP lawmakers in the Assembly have stood solidly behind the governor.

The Speaker said the Democrats’ budget plan is “as good as it gets,” although he said he was willing to continue negotiating with Republicans.

Brown said one of his next steps will be to put Deukmejian’s proposal for $3.6 billion in budget cuts into still another budget bill and bring it up for a floor vote.

Such a move would put Republicans clearly on the spot because one of the governor’s most controversial recommendations is a proposal to suspend the California Constitution and cut $800 million in Proposition 98 funding guarantees to public schools that were adopted by voters in 1988.

Although 13 Republicans in the Assembly are on record as saying they will refuse to cut public school spending, GOP leaders for weeks have dodged questions about Proposition 98.

Assembly Republican Leader Johnson and a key GOP budget negotiator, Assemblyman Bill Baker of Danville, did not sign a petition circulated by school interests seeking to line up support against cuts in Proposition 98.

Deukmejian contends that legislative acts, voter-approved initiatives, federal requirements and court decisions have put the state budget on “automatic pilot.” He argues that unless checked by meaningful “structural reforms” in the budget process, the state will need $35 billion in tax increases over the next five years to keep up with spending demands.

Because Proposition 98 guarantees schools roughly 42% of the state’s discretionary tax revenues for public schools and community colleges, it is by far the largest state program requiring automatic budget increases.

Deukmejian gave Republicans a cue Wednesday, when he issued a statement saying the Democrats’ spending plan “lacks sufficient structural budget reforms and thus fails to control the automatic spiral of state spending.”

The governor attended the dedication of the Richard M. Nixon Presidential Library and Museum in Yorba Linda on Thursday morning but was back in his Capitol office later in the day.

Before the Assembly took up the budget, state Controller Gray Davis made an unusual appearance before the lawmakers and told them that the state’s financial situation was getting worse by the day.

With courts ruling that the state must continue payments to Medi-Cal providers, welfare recipients and others owed money by the state, Davis said California will run out of money July 27 or 28 if there is no budget. Davis said he will be in the position of having to pay the state’s bills with registered warrants, a form of IOU, because “the cupboard will be absolutely bare.”

After the vote, Speaker Brown recessed the Assembly until Monday, saying that members needed “to be away from each other.”

VOICES FROM THE ASSEMBLY FLOOR

Excerpts from exchanges between members of the Assembly as they heatedly debated a proposed, long overdue state budget: Maxine Waters (D-Los Angeles):

“I know you (Republicans) hate people on welfare. Well, I was one of those poor children on welfare. I was raised on welfare. There are a lot of poor children out there who deserve our support, who deserve to be able to eat, who deserve to be able to sleep. I’m going to fight for those children. . . . It will be a cold day in hell before I participate in a society giving up on its children.”

Assembly Speaker Willie Brown (D-San Francisco):

“I too lived in the public housing projects. You (Republicans) have absolutely no clue as to what it’s like to live on that side of town. I would invite you to come for something other than a social worker’s view or a clinical inspection. I would invite you to come for purposes of living for more than just overnight to say you did it. I would invite you to live it day in and day out. I would invite you to be terrorized about tomorrow, (not) knowing whether you’d eat or not eat.”

Mike Roos (D-Los Angeles),characterizing the message that he said Republicans send to poor immigrants flooding into California from poverty stricken countries:

“We don’t want you anymore. We don’t want any losers or people who look like losers.”

William P. Baker (R-Danville):

“The government is growing far faster than our ability to pay for it. We’re going to bring this bulging bureaucracy under control.”

Tom McClintock (R-Thousand Oaks):

“We are setting a new all-time record for political and legislative incompetence.”

Ross Johnson (R-La Habra):

“You (Democrats) have created a massive edifice of government spending and government programs. It simply has not worked. . . . You can’t solve the problem by throwing money at it. Taxpayers are real people too. One of their needs is to get government off their backs and out of their pockets. It’s time we showed compassion to taxpayers.”