KUTV

California Faces Its Day Of Fiscal Reckoning

Posted: 3:45 pm PDT May 22, 2009Updated: 3:58 pm PDT May 22, 2009

SACRAMENTO, Calif. — The day of reckoning that California has been warned about for years has arrived.

The longest recession in generations and the defeat this week of a package of budget-balancing ballot measures are expected to lead to state spending cuts so deep and so painful that they could rewrite the social contract between California and its citizens. They could also force a fundamental rethinking of the proper role of government in the Golden State.

“The voters are getting what they asked for, but I’m not sure at the end of the day they’re going to like what they asked for,” said Jim Earp, executive director of the California Alliance for Jobs, which represents the hard-hit construction industry. “I think we’ve crossed a threshold in many ways.”

California is looking at a budget deficit projected at more than $24 billion when the new fiscal year starts in July. That is more than one-quarter of the state’s general fund.

This week, voters said they no longer want the Legislature to balance budgets with higher taxes, complicated transfer schemes or borrowing that pushes California’s financial problems off into the distant future. In light of that, Republican Gov. Arnold Schwarzenegger has made it clear he intends to close the gap almost entirely through drastic spending cuts.

The governor’s cutbacks could include ending the state’s main welfare program for the poor, eliminating health coverage for about 1.5 million poor children, halting cash grants for about 77,000 college students, shortening the school year by seven days, laying off thousands of state workers and teachers, slashing money for state parks and releasing thousands of prisoners before their sentences are finished.

“I understand that these cuts are very painful and they affect real lives,” Schwarzenegger said. “This is the harsh reality and the reality that we face. Sacramento is not Washington — we cannot print our own money. We can only spend what we have.”

He also has advocated selling state assets to raise cash, including the Los Angeles Memorial Coliseum and San Quentin State Prison.

 The Democrats who control the Legislature do not want major spending cuts, but so far they don’t have a plan for closing the deficit. And if their solution is higher taxes and more borrowing, they will probably not have enough Republican votes to get the two-thirds approval needed for passage.

He was not vetted, folks,” Steele said. “He was not vetted because the press fell in love with the black man running for the office.

” ‘Oh, gee, wouldn’t it be neat to do that? Gee, wouldn’t it make all of our liberal guilt just go away? We can continue to ride around in our limousines and feel so lucky to live in an America with a black president,’ ” Steele said, mocking what he sees as a biased media.

Can see it   here

From the Hill

House Agriculture Committee Chairman Collin Peterson (D-Minn.) said on Thursday that he has the votes to take down Rep. Henry Waxman’s (D-Calif.) climate change bill.

Peterson’s boast comes as Energy and Commerce Committee Chairman Waxman has backed off on his desire to have his bill go straight to the floor. Waxman told reporters Thursday afternoon that he expects the bill to go to Peterson’s committee, as well as to the Ways and Means and Foreign Affairs committees, for additional markups.

AP News via Wyoming

WESTERLY, R.I. (AP) – A Rhode Island lawmaker says he’ll donate $100 to charity for every second former President George W. Bush withstands waterboarding, an interrogation technique his administration used on some terror suspects.

Rep. Rod Driver, a Democrat, also included former Vice President Dick Cheney and ex-Secretary of State Condoleezza Rice in his offer. He sent letters to all three.

Driver said that if Bush is so confident that waterboarding, which simulates drowning, is not torture, he should try it for himself while being videotaped. His offer was first reported Thursday in The Westerly Sun.

Picture of Mr Driver. Sort of looks like Ed Koch.

 Has a real anti Israel bias on his blog

Is a 7 + minute video

CAIR Thanks CBS for ‘Powerful’

 Report on Mistreatment of

Palestinians.

BLOOMBERG

Frank Is ‘Open’ to Increasing U.S. Bailout’s Size (Update1)

Jan. 27 (Bloomberg) — House Financial Services Committee Chairman Barney Frank said he would consider expanding the $700 billion financial-rescue fund, and expects the Obama administration will soon address banks’ toxic assets.

“I am open to that if they can demonstrate the need for it,” Frank told reporters in Washington today when asked if he’d approve a request to enlarge the Troubled Asset Relief Program. “I do think they will be addressing fairly soon the question of what you do about the bad assets” on banks’ balance sheets, he said.

Frank’s remarks indicate a growing recognition among lawmakers that President Barack Obama’s economy team will need more than the $350 billion of TARP that has yet to be committed. House Majority Leader Steny Hoyer said last week he “would not be surprised” at a request for an increase.

Frank said he expects to begin working with Treasury Secretary Timothy Geithner “immediately” on rules to stabilize the banking system, including a plan to buy soured mortgages.

Congress this month released the remaining $350 billion of TARP funds to the Obama administration. Frank and other congressional leaders have faulted former President George W. Bush and his Treasury Secretary Henry Paulson for not using the initial $350 billion released in October to stem foreclosures and spur lending.

Frank said he’d consider releasing more funds if the Obama administration showed “that there is a problem, that what they’re doing is helping alleviate the problem and that they’re doing it in a way that is supportable.”

Administration officials and banking regulators are considering ideas including setting up a “bad bank” to remove the toxic assets curbing banks’ ability to make new loans. Geithner, who was sworn in yesterday as Treasury secretary, last week pledged “much more substantial action” on a “very dramatic scale” to repair the financial system.

Rassmussen Reports