Reforms needed to avoid repeat of budget fiasco, Panetta says

SACRAMENTO — After three months of "recrimination, passing the buck, gridlock, delays and sniping at one another," California can't afford another budget fiasco, said a leading Democrat who insisted an overhaul of government is the only way out of the constant crises plaguing the state Capitol.

Leon Panetta, co-chairman of California Forward, a nonprofit bipartisan government reform group, urged political leaders to make 2009 the "year of reform."

Panetta, the former chief of staff for President Clinton, congressman and director of the Office of Management and Budget, was the keynote speaker Wednesday at a forum in Sacramento.

"We are truly at a crossroads," Panetta said in a 34-minute address at a downtown hotel blocks from the Capitol. "Winning is more important than governing, today is more important than tomorrow, sound bites are more important than solutions and it's easier to blame the other than take risks. We see the consequences of this. There is a paralysis that develops when those become the principle values that guide this town."

Even with the budget finalized after a record 85 days of stalemate between Democrats and Republicans, political leaders are facing what many are predicting to be an equally dire economic scenario for next year, with another multibillion-dollar revenue shortfall expected — and unknown ripple effects looming from Wall Street's meltdown.

Panetta prescribed a series of reforms, Advertisementincluding requiring lawmakers to produce multi-year budgets to allow for long-range planning, implementing performance standards that determine the cost effectiveness of programs and services, installing cost controls through a pay-as-you-go system, and providing stronger oversight to see if programs really work.

He also recommended political reforms such as expanding term limits, handing the power to redraw political boundaries to an independent commission (he supports Proposition 11), creating open primaries in which members of both parties run in a single primary with a runoff for the top two candidates, regardless of party, fixing the state's initiative process, and imposing new campaign finance restrictions.

"I think we know what has to be fixed in terms of the budget, but the political will is still not there," Panetta said. "We need to enact the kinds of budget and political reforms that will make it difficult for leaders of the state to avoid responsibilities to the state and people.

"Let's be frank. There is no silver bullet, but if we can begin in an incremental way to change the way business is done in this town, then I think ultimately we can begin to move in the right direction. It's not going to be a sudden miracle, but it changes the way government operates."

Incoming Senate Leader Darrell Steinberg, D-Sacramento, who was on a forum panel, said that he is "absolutely committed" to avoiding a repeat of the budget fiasco.

The question, he said, is how lawmakers translate "all of what we went through into real political action."

Steinberg said he hopes to "broaden the definition of reform" next year by including a top-to-bottom review of government services — an approach Republicans also are advocating.

"We need to demonstrate how it is the money we seek from taxpayers is going to be used to deliver the outcomes" in services, Steinberg said.

Polls have shown that voters would support higher taxes for government services if political leaders can prove they're spending money wisely.

Steinberg also said eliminating the two-thirds requirement on budgets could lead to more discussions on substantive changes. Panetta said he does not support eliminating the two-thirds requirement.

Because the debate was solely focused on how to get Republican votes, he said, "you didn't see a discussion about changing the system of revenue sources. There was no talk about outcome and accountability."

Panetta said he understands the political realities that stand in the way of reform.

"The one thing that keeps me hopeful is that people are very angry about what's happening," Panetta said. "At some point they'll express that anger at the polls. And leadership has to recognize that if they don't change the way business is done, they may not survive."

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