County, State Inaction Set Stage for Clinton Plan : Politics: President is credited with rescuing health care system after supervisors, legislators representing same constituents could not agree on package.

In fashioning a rescue package to prevent the collapse of the Los Angeles County health care system, Washington delivered on Friday.

Only a week before, lawmakers in Sacramento tried for a last time to do their part. But again they hit a familiar wall of opposition: the inability of California lawmakers and members of the Board of Supervisors to work together for Los Angeles County.

“This is where you have to give the President real credit,” Rep. Xavier Becerra (D-Los Angeles) said Friday in Washington. “When it came to the crisis in Los Angeles County, the first to act was Clinton. The state still hasn’t done its fair share.”

Los Angeles-area lawmakers and county supervisors butted heads for weeks over various pet plans and were never able to resolve their differences. As a result, hundreds of millions of dollars were left by the wayside that might have provided some assurance to the county that help was on the way, and prevented the waves of despair and anger that spread through the county health care system.

“It’s embarrassing,” said Assemblywoman Martha M. Escutia (D-Huntington Park), for the Legislature to be placed in such a bad light by comparison to the successful federal action.

“But I won’t claim a hundred percent fault,” she said. “The supervisors and [county Chief Administrative Officer] Sally Reed share in the fault too.”

Also, she noted, the quick action in Washington was prompted by Clinton, who was in the state at the time and “running for reelection.”

Gerry Hertzberg, chief legislative deputy to Supervisor Gloria Molina, said recriminations have done no good among “folks who should be fighting for the same things for their common constituents. [Lawmakers] need to put their differences aside and not exploit and exaggerate them and use them for reasons for not acting.”

In Sacramento, maneuvering proceeded from argument to stalemate in attempts to find money for the county.

The inability to forge a consensus popped up again and again--between Democratic legislators and supervisors, between legislators and transit officials and Los Angeles Mayor Richard Riordan--all with the ironic twist that no matter who was facing off against whom, all parties were supposedly representing mostly the same people, the residents of Los Angeles County.

As the state measures came up for debate, progress faltered at various points.

One aid package of $375 million, though opposed by the Metropolitan Transportation Authority--which would have supplied the funds--was actually passed by the Legislature in July, only to be vetoed by Wilson.

Wilson’s rationale--repeated often by fellow Republicans in the Assembly--was blunt: If Los Angeles-area Democrats in Sacramento and their supposed allies in Los Angeles could not agree on a given proposal, why should they?

Finally, at the close of the legislative session, lawmakers approved a $150-million package for the county using money from the MTA--a $50-million transfer plus a $100-million loan. The county rejected the loan. It had overborrowed already and another loan would worsen its already dismal credit rating on Wall Street. Furthermore, the MTA opposed it.

A contentious spat on another front featured Democrats showing deep divisions over an article of party faith: maintaining levels of public benefits and services to the poor.

Before the Legislature was a proposal sought by Wilson to allow counties to reduce benefits to the indigent, mostly single men and women and childless couples. A fight broke out over whether the county or the state should make the first move in reducing the maximum $285-per-month benefit to the more than 88,400 general assistance recipients in Los Angeles County.

Supervisors, counting on a general assistance cut of about $77 million to help hold together health services for other needy residents, looked to their Sacramento allies to pass the measure. But they did not.

Instead, in the closing moments of the legislative session, Los Angeles-area Democrats killed off the aid bill, saying it would lead to slashing of benefits for the poorest of the poor statewide. They argued that the county could have proceeded straight to a state agency, the Commission on State Mandates, and applied for a 35% reduction in general assistance obligations, but, in the words of Assemblyman Richard Katz (D-Sylmar), the Board of Supervisors “didn’t want to take the heat. They wanted us to take it.”

Often overlooked in analyzing the failure of Democratic-backed legislation, Katz said, is that, as of this year, “Republicans control the Assembly.” It was their opposition, he said, that prevented passage of the most ambitious of the Democratic rescue plans: state approval for the county to levy taxes on alcoholic drinks and tobacco.

Together, estimated revenues from the two taxes would have meant as much as $650 million a year for Los Angeles County. But the liquor tax proposal collapsed in the face of solid opposition from Republicans and Northern California wine country legislators, including Democrats. The tobacco tax proposal died on the Legislature’s last day on a Republican parliamentary maneuver, and Wilson would not have signed it anyway, his aides said.

Another pair of proposals would have freed up about $100 million for Los Angeles-area public hospitals by shifting federal funds around, but in the acrimonious final moments before the Legislature recessed Sept. 16, the legislation died, according to the Democratic authors, because of Republican opposition.

One positive result of the aid-for-Los-Angeles exercise in Sacramento, according to a number of Latino legislators, was some newly found clout for the so-called Latino Caucus, consisting of 14 members in both houses, nine of whom represent districts in Los Angeles County.

The caucus played a major role in setting the agenda and providing leadership on the most highly visible of the bailout issues. Though in vain, state Sen. Richard G. Polanco (D-Los Angeles) and Assemblywoman Escutia steered the $100-million MTA loan through to passage, successfully negotiating with conservative Republicans to join the Los Angeles measure to a similar plan for Orange County. Other Latino members carried major bills.

In the past, there has been a split in the Latino Caucus that prevented unity, but this time, no divisions were detectable. There were, however, differences between some caucus members and Supervisor Molina.

Molina was not available for comment, but her aide Hertzberg said Friday that his office would prefer to dwell on what happens next.

“There is clearly a need for [the Legislature] to go back into special session now,” particularly since parts of the federal aid package may require action by state lawmakers, he said.

But Escutia said that returning to the Capitol for a special session is “not worth it. What we should do is keep meeting with the supervisors to see what reforms we can bring forward in January” when the Legislature is scheduled to return.

Times staff writer Faye Fiore in Washington contributed to this story.