NEWS ANALYSIS : Holdout Works to Wilson’s Advantage : Spending: By keeping details of budget cuts secret for so long, governor takes some clout away from health and education lobbyists and puts more pressure on Legislature.

Now that Gov. Pete Wilson has gone public with his detailed plan to balance the budget by cutting deeply into health and welfare programs, it’s easy to see why he kept it secret for so long.

Wilson’s list of cuts has drawn howls of protest from advocates for the sick and the needy, who say the proposed reductions are coldhearted and wrongheaded and could be avoided.

The outcry has put the Republican Administration on the defensive, forcing Wilson and his aides to explain for the first time the moral, political and fiscal reasoning behind dozens of proposed reductions. The governor, in short, no longer controls the debate the way he did when he was extolling the vague but popular virtues of “cutting government” and forcing the state to “live within its means.”

But the opposition, if not too little, may be too late. Wilson’s long holdout seems to have assured him of getting most of what he wanted: a budget balanced without either raising state taxes or openly postponing until another year repayment of part of the state’s huge year-end deficit.

At worst, Wilson may have to accept cuts in parts of the budget he would like to protect and agree to a few one-time measures to soften the blow on health, welfare and education. And, if he fails to secure a lasting reduction in education spending, Wilson may find himself with yet another, smaller budget shortfall on his hands next year.

The result may be known in a few days or not for several weeks, depending on how long legislators can endure the embarrassment of a state out of cash and forced to pay its bills with IOUs.

But the question remains: why did Wilson wait until three days into the fiscal year--and 18 days after the Legislature’s deadline for enacting a budget--before saying publicly that he intended, among other things, to eliminate homeless assistance, force dying patients out of hospices, and limit Medi-Cal patients to 10 prescriptions per month?

The answer, according to Wilson aides, is that the governor didn’t want to talk about specific cuts until Democrats had agreed with him on how much the state was going to be able to spend.

“Every lobbyist acting on behalf of every one of these programs that is going to be reduced or eliminated would have been lining up outside the members’ doors, pressuring them not to go along,” said Dan Schnur, Wilson’s communications director. “The debate would have stalled right there.”

Wilson’s strategy has been clear since January, when he declared that the state had a fixed amount of money at hand and the only thing to discuss was how best to spend it. Wilson never budged from that no-tax stand, even as the plummeting economy dragged down state tax receipts further than he had anticipated.

The budget negotiations did not start in earnest until June, after the primary elections, when the state’s fiscal condition became clear: the government faced a $6-billion cash shortage and was nearly $11 billion shy of the amount needed to erase the deficit, rebuild an emergency reserve and continue all programs at their current levels for another year.

Wilson’s first goal was to set the level of spending on education, which is the state’s biggest obligation. By Wilson’s accounting, because there would be no tax increase, every dollar cut from education was a dollar available to be spent elsewhere. Not until the education issue was decided, then, was he willing to discuss the rest of the budget.

Democratic leaders went along with Wilson for a while, meeting privately with him 16 times in hopes of reaching a consensus that they could sell to the rank-and-file members of the Legislature. Despite Wilson’s public pronouncements, Assembly Speaker Willie Brown (D-San Francisco) and Senate Leader David A. Roberti (D-Van Nuys) assumed that the governor eventually would compromise.

But as the meetings wore on, the majority party’s negotiators realized that Wilson had no intention of meeting them halfway. They floated plan after plan, some with new taxes, some without. But Wilson rejected them all, never offering anything in return.

Although Wilson had developed contingency plans for cutting the non-education side of the budget, he would not reveal them. He even refused to allow his Cabinet secretaries and department directors to testify before the Legislature’s budget-writing committee.

“It’s very difficult to play marbles with a guy who won’t come out of his home,” an exasperated Brown said at one point.

By employing this strategy, Wilson kept the Democrats off-balance. If they wanted to raise taxes or roll over the deficit, they could only argue that it was to avoid cutting government. They trotted out some horror stories--universities would be closed, prisons emptied--but the Democrats lacked a real, credible target to shoot at because Wilson wouldn’t provide one.

Finally, about 10 days before the end of the fiscal year, Wilson announced that he was seeking to cut $2 billion from the $25 billion that the public schools expected to spend in the 1992-93 fiscal year. But the governor still refused to say what cuts he planned to make in the budget for health, welfare and other programs.

If he had, said Senate Majority Leader Barry Keene (D-Benicia), it would have caused a political explosion large enough to force the Republicans to back down. Keene led a failed effort in the final days of the fiscal year to persuade Senate Democrats to support the governor’s budget if he would just agree to put the entire document up for a vote. Even if it passed the Senate, Keene figured, the governor’s plan would have been crushed in the Assembly by a united effort of education, health and welfare advocates.

“He was protected by a cloak of ambiguity,” Keene said. “His position, once exposed, would have been politically indefensible.”

But Wilson resisted, and even though he failed to win approval for the schools cut he wanted, the dynamics changed July 1 when the new fiscal year began--giving Democrats far less leverage to push for a tax hike.

For one thing, schools are less vulnerable. Because the new fiscal year has started, the Legislature would have to suspend Proposition 98, the voter-approved constitutional amendment that protects education funding, to give Wilson the full $2-billion cut he is seeking. But that would require approval by two-thirds of the members of each house. The Proposition 98 protection gives the powerful education lobby less of an incentive to push with health and welfare groups to raise taxes or roll over the deficit.

In addition, the crisis atmosphere brought on by the state’s use of IOUs, known as registered warrants, has obscured the debate over policy and worn down the political will of Democratic lawmakers to resist Wilson’s demands. Although the details are still to be worked out, both Brown and Roberti have all but conceded that Wilson has a distinct advantage.

“Now the issue is, we’re not on time,” Roberti said. “It’s sort of given the governor’s side some reinforcements, because we’re beyond the deadline. It’s another instance of the Legislature not performing. The general public doesn’t focus on why.”