Tuesday, November 4, 2008

Boxer fires a shot across Paulson's bow

EDITOR'S NOTE: This is a sampling of political writer Josh Richman's blog, The Political Blotter. Read more and post comments at www.ibabuzz.com/politics.

Oct. 29

Sen. Barbara Boxer, D-Calif., fired a warning shot across the banking industry's bow — and Treasury Secretary Henry Paulson's as well — while taking questions at her San Francisco news conference today.

She called for a crackdown on banks that are sitting on or misusing some of the money they got from the $700 billion public bailout of the financial industry; the bailout's intent was to get credit flowing again, but that won't happen if banks aren't lending out the public money they just got.

U.S. taxpayers got preferred stock in these financial institutions, Boxer said, and she believes the investment eventually will come back. But she's disappointed that the government didn't use its investment to take voting positions in these institutions, and already there are reports that the money isn't flowing as it should. Paulson must act, she said.

"There's going to be this oversight, there's going to be action if Paulson doesn't do what he said he would do," she said today, leaving the door open to further Congressional action. "What we giveth, we can taketh away."

Oct. 30

Gov. Arnold Schwarzenegger signed an executive order today creating a Advertisementbipartisan "Commission on the 21st Century Economy" to "re-examine and modernize California's out-of-date revenue laws that contribute to our feast-or-famine state budget cycles."

The 12-member panel — six appointed by the governor, three each by the Assembly Speaker and State Senate President Pro Tem — is supposed to report by April 15 on "changes that will result in a revenue stream that is more stable and reflective of our economy," according to the news release from the governor's office.

"Unlike our diverse economy, our state's revenue system is the epitome of boom or bust and right now we are paying the price," Schwarzenegger said in the release. "That is why I have worked with the legislative leaders to find a long-term solution to our revenue problem. And today, I am signing an executive order creating a bipartisan Commission on the 21st Century Economy to study our revenue system and help California achieve the long-term fiscal stability our state needs and our people deserve."

Said soon-to-be-gone Senate President Pro Tem Don Perata, D-Oakland: "California's tax system is antiquated and long overdue for an overhaul. Our state is one of the most advanced economies of the 21st century, but it relies upon an outdated and volatile tax model that no longer makes sense. This commission will examine how to best capture revenue in California's dynamic economy and put the state's finances on the stable and sound footing needed to remain a global leader."

And Senate Republican Leader Dave Cogdill, R-Modesto, said, "Keeping California competitive in a global economy is the key to a strong and healthy state budget. I applaud the Governor for working with legislative leaders to address California's broken budget system and I look forward to reviewing revenue-neutral recommendations from the commission, not just on fixing our revenue system, but also on how the state can adjust its spending levels to come into alignment with revenues."

But isn't it the Legislature's job to be the stewards of California's long-term fiscal well-being? We wouldn't need a blue-ribbon commission if our lawmakers weren't so intransigent, so apt to put ideology over reality. It's abundantly clear that California doesn't take in enough money to meet its needs for schools, prisons, health care and the like; we can't keep cutting our way out of the problem, and claiming that we can is ludicrously irresponsible.

Yet even after the absurd standoff this summer and the resultant massive crap-heap that's now masquerading as a state budget, it seems lawmakers still aren't willing or able to do what must be done on their own.

Maybe this commission is meant to give some political cover to lawmakers who still feel their careers are endangered by doing the right thing for California. If so, whatever; just get it done.

But if this turns out to be (to borrow the words of R.E.M.) "a way to talk around the problem," and we're still having the same tired ideological debate after this commission's report has come and gone, it oughta be clobberin' time for this Legislature. It'll be a pretty compelling argument for doing away with the constitutional requirement that budget and tax bills need a two-thirds majority in each legislative chamber, a requirement so awesomely effective at bollixing up the works that it exists only in California, Arkansas and Rhode Island.

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