When he vetoes the new state budget approved by the Legislature in the early hours of Tuesday morning, Gov. Arnold Schwarzenegger will reclaim the high ground on the issue that propelled him into the Governor's Office five years ago but has bedeviled him ever since: the state's badly broken finances.

The budget plan hatched by legislative leaders in private meetings last weekend and then rushed through both houses in the middle of the night Monday is one of the worst in recent memory, and there have been a lot of bad ones. It's a great example of why bipartisan cooperation is not always better than a partisan confrontation.

The plan does almost nothing to address the long-term gap between spending and revenue that has led to year after year of budget shortfalls. It reduces some spending from projected levels but mostly patches together a collection of gimmicks and temporary measures that will leave the state fighting the same old battles next year. And it almost guarantees that an even bigger shortfall will land in the laps of legislators and the next governor in 2011.

Schwarzenegger says he will veto the budget in part because lawmakers watered down a companion reform measure that he wanted as a way to help prevent future deficits. His plan would have smoothed out the ups and downs in California's notoriously volatile revenue system.

But that was only one reason for the governor to reject this budget. A better one was that, after 78 days of stalemate, legislators passed a budget but still have not done their jobs. This budget is so bad that lawmakers are not even pretending it is a real attempt to solve the state's chronic imbalance between spending and revenue.

"Let's be clear: All we've done is roll the problem over to the next Legislature," said Democratic Senate Leader Don Perata.

Assembly Speaker Karen Bass agreed. "This budget," she said, "is a short-term solution."

In truth it is no solution at all. It simply stalls for time while legislators and the governor regroup and build their stamina for another run at the problem next year, when the economy, and the state's finances, might be even worse than they are today.

Lawmakers, including the Republican leader in the state Senate, threatened to override a Schwarzenegger veto even as they were casting their votes.

Chances are, they mean it. It took a two-thirds vote in each house to pass the budget and it would take the same vote to override a veto. Given Schwarzenegger's strained relationship with lawmakers from his own party, there is no reason to believe they would hesitate to pass the budget again over his objections if that is what the Democrats decided to do.

But a veto override on the budget, far from being an embarrassment to the governor, would give him the credibility he needs next year to get the problem fixed once and for all.

An override would be clear evidence that just about the only time this Legislature can come together in bipartisan unity is when they are doing something irresponsible.

It would also insulate Schwarzenegger from some of the public wrath that is likely to emerge when the real effects of this plan become clear. And it would give him standing, next year, to say to the Legislature and to the voters: Let's finally do this thing right.

Schwarzenegger's own plan was far from perfect. Like the Legislature, he wanted to rely on a risky expansion of the California Lottery, coupled with a plan to borrow against the game's future revenue, as a way to raise $5 billion a year for two years. But even if that plan worked, it would still leave a $5 billion hole in the budget when the money ran out in year three.

And Schwarzenegger was proposing a temporary sales tax increase followed automatically by a tax cut. That, too, would leave the state with a bigger problem when the temporary tax expired after three years. But the governor figured a temporary tax was the most the Republicans in the Legislature would ever support. In the end they would not even go that far.

What the state desperately needs is a multiyear workout plan that suspends every spending mandate until revenues again match projected expenditures. If borrowed money is going to be part of the plan, it must be used only as a bridge to cushion the blow on services until revenues catch up with spending. Using borrowed money to sustain ongoing spending at current levels is a recipe for disaster, because the money will run out while the spending will be programmed to continue, and grow.

California also needs someone to stand up and be brutally honest with the people. The message: This cannot continue. We must pay more taxes to finance the services we are getting from government, or we must reduce the cost of those services to a level we are willing to support with the taxes we are paying now.

Schwarzenegger can be that messenger. Now that he has decided to veto this budget, the people of California might actually listen.

Call The Bee's Daniel Weintraub, (916) 321-1914.