Brown’s Move May Kill Workers’ Comp Bills : Politics: Key portions of overhaul package are voted down after Speaker denounces compromise in surprise visit to committee.

With end-of-session tempers flaring, Assembly Speaker Willie Brown interrupted a legislative meeting at the last minute in an attempt to kill a move by his own party that seeks to overhaul the abuse-plagued $12-billion workers’ compensation system.

The Speaker’s maneuver just before midnight Friday angered legislators who spent long hours fashioning the compromise package and prompted one fellow Democrat to suggest Saturday that Brown was doing the bidding of insurance companies that oppose the legislation.

Brown made his surprise appearance as an Assembly-Senate conference committee rushed to approve the five-bill reform package so the full Legislature could vote on it during this final weekend of the 1992 term.

While four dozen lobbyists looked on, Brown strode in and had a heated discussion with Assemblyman Burt Margolin (D-Los Angeles), the legislation’s main proponent.

“Do what you want,” Brown said as he left. “I wouldn’t vote for it.”

When the powerful Speaker departed, the six-member committee voted down key portions of the measure, despite Margolin’s objection.

“I adamantly and vigorously object to the action he (Brown) recommended,” Margolin said Saturday. “I’m not at all in agreement with the Speaker.”

Throughout Saturday, Margolin worked to revive the bills, leaving the possibility that they could be reconsidered by the end of the session Monday, or in a special session. A conference committee hearing was tentatively scheduled to take up the bill today.

But without Brown’s support, chances that the bills would pass this year seemed slim. Several special interests, including insurance companies and attorneys who handle workers’ compensation cases, also oppose many features of the bills.

The measures seek to revise California’s system of paying benefits to workers who become disabled on the job. As it is, the system is riddled with fraud and abuse. Employers pay among the highest premiums in the nation, while injured workers collect benefits that are among the lowest--a maximum benefit of $336 a week.

Before Brown intervened, the final package had brought Democrats closer than ever to Republicans on the issue. In the end, Republican members of the conference committee, joined by Democratic Assemblyman Steve Peace of Chula Vista, voted against parts of the package, making passage unlikely this session.

Under the overhaul proposal favored by Margolin, injured workers’ benefits would increase to $448 by July, 1993. But by toughening fraud penalties and capping other costs, the bill could end up saving employers more than $1.15 billion, the Legislature estimates.

When it was apparent that Brown’s late-night action had stalled and perhaps killed the bills, Sen. Bill Lockyer (D-Hayward), the committee’s co-chairman, walked out and went to the Senate chambers. There, he criticized the Speaker and questioned his motives.

“I don’t understand what’s going on,” Lockyer told his colleagues. “The only thing I could see was the Speaker ask about insurance issues only. He seemed to reflect a particular concern for certain insurance companies and not others.”

Lockyer pointed out that Brown did not address several other controversial provisions, including what traditionally has been among the Democratic Party’s key concerns--that injured workers need to receive higher benefits.

Instead, Brown opposed Margolin’s bill because he wanted immediate deregulation of rates charged by insurance companies.

Some insurance companies have called on the Legislature to repeal the so-called minimum rate law, contending that they will be better able to compete without it. The rate law establishes minimum fees insurance companies charge employers for workers’ compensation insurance.

“I want it abolished,” Brown said of the minimum rate provision, adding that it was the only way to lower escalating costs.

Margolin said he was left confused by Brown’s stated reasons for opposing the bill, noting that his legislation would have all but abolished the minimum rate provision.

If the Speaker pulled the plug on the legislation, Gov. Pete Wilson did not appear to be taking steps to breathe life into it. Democrats charged that the governor gave them a cold shoulder when they tried to negotiate on the issue.

After the bills were all but killed Friday, an angry Peace flipped on his microphone so onlookers could hear and cursed the governor. “He’s sicker than I thought,” Peace added. By Saturday, however, Peace had calmed and issued an apology to Wilson.