Health care bill is vetoed

Moving California's yearlong health care debate nearly back to square one, Gov. Arnold Schwarzenegger on Friday vetoed the Democrats' main proposal to reduce the ranks of the 6.7 million Californians without insurance.

Two days before the deadline to act on bills passed by the Legislature, Schwarzenegger for a second time also vetoed legislation that would have allowed gay and lesbian couples to legally marry in the state.

The Republican governor had vowed to veto both of those bills, which were passed by the Democrats who control the Legislature with no support from GOP lawmakers.

Democrats, meanwhile, have signaled that Schwarzenegger's health care plan will meet a similar fate in the Legislature.

In vetoing AB 8 by Assembly Speaker Fabian Núñez and Sen. President Pro Tem Don Perata, Schwarzenegger said the measure would not reduce health care costs and would place too much of the financial burden on employers.

"The time is now for all of us to return to the negotiating table, find middle ground and pass the comprehensive reforms we need to fix our broken health care system," Schwarzenegger said in a statement.

Núñez, the Democrats' main negotiator on health care, refused to yield on the basic principles in the bill.

"This veto notwithstanding, where we end up on health care will look a lot like AB 8 -- particularly on affordability, fair participation from employers and keeping the costs of prescription drugs down," the Los Angeles Democrat said in a statement.

More than a month into a special legislative session on health care, the two sides remain divided on how to pay for health care expansion as well as other important issues.

This week the governor, responding to complaints from small businesses, lowered the minimum contributions that employers that do not provide coverage for their workers would be required to pay under his plan.

Instead of a flat 4 percent fee of their payroll, they would now contribute from zero to 4 percent, based on a sliding scale of their revenues. Democrats insist that employers pay a minimum of 7.5 percent, noting the average for those that currently provide coverage is 13.5 percent.

At a news conference Friday, Núñez expressed frustration with the governor's revised fee structure. "He says he's at 4 percent, and then he moved in his proposal -- now some employers pay zero, several of them pay 4 percent, and a lot of them pay 2 percent," the speaker said.

The governor's plan also would require that individuals purchase health insurance, with the state providing subsidies for the working poor. Democrats oppose the individual mandate, saying the subsidies would be insufficient for low- and middle-income workers.

In a statement accompanying his veto, the governor said, "sustainable, comprehensive reform cannot place the majority of the financial burden on any one segment of our economy."

Schwarzenegger's veto of the gay marriage bill -- AB 43 by Assemblyman Mark Leno, D-San Francisco -- also was not a surprise. He vetoed similar legislation in 2005.

As he did then, the governor said he was proud California has been a leader in recognizing domestic partnerships. But he noted that in 2000 voters approved Proposition 22, which limits marriage in the state to unions between men and women.

"I maintain my position that the appropriate resolution to this issue is to allow the (California Supreme) Court to rule on Proposition 22," Schwarzenegger said in his veto message.

The governor, however, signed Senate Bill 777 by Sen. Sheila Kuehl, D-Santa Monica, which will consistently apply anti-discrimination language related to sexual orientation and gender identity throughout the state's education code.

The conservative Capitol Resource Institute opposed the measure, calling it "homosexual indoctrination in schools."

About the writer:

• The Bee's Aurelio Rojas can be reached at (916) 326-5545 or arojas@sacbee.com.