Health care cost drivers

At her press conference Tuesday to announce the reintroduction of SB 840, the single payer bill, Sen. Sheila Kuehl said she thinks her side will eventually win this debate because "the facts are on our side." Some of them may be. But not the ones she used Tuesday, at least as far as I can tell.

Mentioning my Tuesday column in which I said demographics (an aging population) and technology were the major drivers behind increasing health care costs, Kuehl said new studies were showing that wasn't true. Instead, she said, administration and prescription drug costs were the major drivers.

If true, this would be a crucial point for single payer advocates. It's fairly plausible that a single payer plan would reduce administrative costs, including not just paper shuffling but marketing and profits. Eliminating the private insurance industry would likely have that effect. And using the government's power to bargain for drug prices would probably also save money, especially if the government were willing to deny its constituents access to drugs that couldn't be bargained down. So if those two costs are what's driving our overall health costs up, a single payer plan might have a chance of staying within a budget supported by taxes that grow at approximately the rate of the state's economy.

But if, instead, what is driving costs up is increased usage of health care from an aging population and the increased use of expensive medical technology, then pretty much the only way to stay within budget is to cut usage or deny people the opportunity to use expensive new medical inventions. It's possible you could reduce some usage with better prevention, but it's difficult to count on the payoff from that as a budget balancer.

According to Kuehl's staff, the study she was talking about was one released last month by McKinsey Global Institute. I've read the study (free registration required) and it appears very solid. It just doesn't say what Kuehl said it does.

First of all, the study is not about trends in US health care costs. It is a snapshot of US costs compared to 13 other countries in 2003. So while its conclusions can be used to compare our health care costs to theirs at a point in time, it says nothing about the growth in US costs over time.

And what does it say about 2003? That our costs were $477 billion higher than the average of the other countries, adjusted for our higher wealth, which tends to increase health spending no matter what kind of system you have.

Of that $477 billion, the biggest drivers were hospital care and outpatient care. Hospital care was $224 billion more than would be expected, and outpatient care was $176 billion more. Private health administration and insurance accounted for $84 billion of the difference, and drugs were $57 billion. We actually spent less than the average on long term care and durable medical equipment.

So the McKinsey study said nothing about the trend, and what it said about the snapshot contradicts Kuehl's point. The major reason we spend so much more than other countries on health care is that we spend more on hospital and outpatient care. And one big reason we spend more on those things, the report says, is that our doctors make far more than the average, and we have far more nurses on duty per patient day than the rest of the world. When was the last time you heard a single-payer advocate harping on doctor salaries or complaining that we have too many nurses?

As it happens, another study published this week in Health Affairs (free for two weeks) did look at the US trends over time, looking back and projecting to 2016. That's the study you may have heard about that said the US would be spending 20 percent of GNP on health care by 2016. So what's driving that growth?

According to the study, US health care costs will climb from $1.86 trillion in 2004 to $4.1 trillion in 2016, an increase of about $2.3 trillion.

Of that, about $720 billion will be in hospital costs, and $670 billion in professional services. Drugs will account for $308 billion. And administration and private insurance will be $160 billion. Of the increased spending on drugs, by the way, about half will come from higher prices and half from increased utilization.

So there's another study that says our increased consumption of health care is the primary driver of our rising health care bill. And that's ominous news for advocates of single payer. Because it means that after they capture any savings from the elimination of the insurance industry, costs are likely to resume their climb at pretty much the same rate they have been climbing for years. And the only way to deal with that in a single payer system is to raise taxes or reduce the amount of care delivered. Neither would be as popular when they happened as the abtract notion of "universal health care" is today.

Immigrants and the labor market

This new PPIC study on the effect of immigrants on California's labor market probably won't change many minds on this emotional issue. But it should. The study finds that immigrants lead to an increase in wages for native citizens at all levels of education. The only people whose wages are depressed by the arrival of immigrants are immigrants who arrived earlier. The study also finds that immigrants aren't displacing natives in the labor market. The supply of both immigrants and natives is growing. Read the whole thing here.

Global warming fight heating up

After last year's love-in, there's a real confrontation brewing between the Legislature, or at least the Senate, and Gov. Arnold Schwarzenegger over the best way to reduce greenhouse gas emissions in California. Schwarzenegger believes a combination of direct regulation of emission sources and a market-oriented approach that would let industries buy credits from others who are reducing their emissions will work. Senate Democrats are highly skeptical of that approach, if not downright hostile to it. They have insisted that Schwarzenegger is acting outside his authority in trying to move forward with his dual-track effort rather than relying on regulation first. Now they've introduced a package of bills that would force his hand. Of course, he could always veto any of them that he does not like. So legally speaking, he's in the driver's seat. But politically, if he intends to go on promoting himself as the leader on this issue, he's going to have to explain why these bills aren't necessary and how his approach is superior.

One of the bills would require the state to lower the CO2 content of gasoline by 10 percent by 2020, rather than making this a goal, as Schwarzenegger has done. Another would require that half the new vehicles sold in California by 2020 be certified to run on alternative fuels. A third measure would authorize the state to order utilities to produce up to one-third of their electricity from renewable energy. And so on.

Here is a link to the Senate press release with summaries of the bills.

UPDATE: Administration officials point out that the 10 percent reduction in CO2 Schwarzenegger is seeking would also be mandatory once adopted, even if it was not in statute. He has directed the energy commission to develop a low carbon fuel standard, and the Air Board to consider it as part of its early-actions mandate under AB 32.

The bad, the good, and the ugly

Liz Hill taketh away, and she giveth. The legislative analyst, best known for poking holes in governors' fiscal plans, also likes to propose solutions. Because her ideas, while often logical, usually involve politically difficult decisions, they are rarely embraced out of the gate. But keep an eye on them because they often pop up later in the process as deal closers.

This year Hill has opined that the governor's budget overstates the government's fiscal health by about $2.8 billion. She thinks the state would end the 2007-08 budget year with a $700 million deficit if the governor's budget is adopted as proposed. She says revenues will probably be $2 billion below what Schwarzenegger is projecting for this year and next. And spending will be at least $800 higher.

But Hill has also offered a number of ideas for closing that gap. Actually, just two big ones would do the trick. The first is relatively painless. The second not so much.

Her first idea is to stop making early payments to retire the state's deficit bonds, approved by voters in 2004. Each year a portion of the sales tax goes to debt repayment. Next year's figure will be $1.5 billion. But Proposition 58, a balanced budget and rainy day reserve that passed along with the bonds, sets aside another $1 billion for repayment next year. The governor can waive that payment by declaring that the state's fiscal conditions requires the use of the money for programs rather than for repaying the debt. Finally, Schwarzenegger has also proposed a completely optional $595 million payment on the debt next year. He needs legislative approval for that one.

Hill is proposing that some or all of those optional payments be suspended. That would give state budget writers another $1.6 billion told their goal of closing the gap she is predicting. It's almost certain the Legislature will follow her guidance and refuse to go along with Schwarzenegger's proposal for the $595 million payment. It's less likely that the governor will on his own suspend the $1 billion payment now scheduled. But he might, especially if tax revenues continue to come in at a lower rate than he projected.

The second big area of savings Hill is pointing to is education, which is governed by the constitutional mandate known as Proposition 98. Each year at budget time lawmakers, using the best information available at the time, set aside an amount for education that at least matches what they think the guarantee will require. In the current year, because revenues are coming in lower than expected, it turns out that the state will probably have given the schools about $600 million more than the minimum requirement. If that money is left in the budget, it will become part of the base on which future budgets are built, and the state will be on the hook for another $635 million more next year.

Hill suggests taking back the $600 million this year. She has a way to do this that would not affect any existing classroom programs. About half the loss of funds would be covered by a shift from a transportation account that has a surplus. The other half would come from programs that were funded but have not begun, and from money that was set aside for community college students who never enrolled.

If the Legislature goes along with that proposal, it would save another $634 million next year. That's more problematic, because the education lobby would argue that it needs that money. Hill says even without it, school spending will still climb, and the schools would get enough to keep pace with enrollment growth and inflation. Given the beating Schwarzenegger took for trimming the growth in school spending a couple of years ago (in a move also recommended by Hill) don't look for him to pick this one up and run with it. But legislators looking to shave money from the budget without hurting health and welfare programs might be more eager than the governor to at least consider the analyst's recommendation.

If the Legislature and the governor suspended the early debt repayment and took Hill's advice on education, they would balance next year's budget, even with the lower than expected revenues and higher than expected spending that she says will come about. If they follow a few more of her recommendations, they might even make some progress on solving their deficit problem into the forseeable future.

LAO: More work to do

The always helpful legislative analyst will issue her annual report on the governor's proposed budget this morning. Bottom line: she sees a $700 million year-end deficit in 07-08 if all of Schwarzenegger's proposals are enacted, not the $2.1 billion reserve he projected.

You can find the whole thing here.

Parsky as head of pension commission

The governor made an interesting choice, to say the least, to chair his new commission on public employee pensions and retirement benefits: Gerald Parsky, who is a venture capitalist, big-time fundraiser for President Bush and has been chairman of the UC Board of Regents. Parsky also helped kill Schwarzenegger's proposal in 2005 to end defined benefit pensions for new public employees and replace them with 401-k style individual plans that are common in the private sector. At the time, Parsky argued that the UC pension plan was fully funded and its benefits were crucial to attracting high quality faculty and other employees.

You can look at this two ways. One, by installing an opponent of his proposal as chairman, you can pretty much be assured that whatever plan emerges won't look anything like the one Schwarzenegger offered two years ago. You might even say this kills any chance for reform. I'm sure that's how it will be viewed by Parsky's many critics among conservative Republican activists, who resent the role he played in recent years trying to move the party to the center, or at least take its administrative tasks out of the hands of the activists.

On the other hand, Parsky now will be in a position where he is expected to come up with solutions to a pretty big problem. He can't just criticize. He needs to produce. And build consensus. Maybe a critic of the governor's plan who also might recognize the seriousness of the problem is a good choice to try to cross party and interest-group lines and find a way to deal with the issue.

Prop 1B update

Complaints are building statewide about the Transportation Commission staff recommendation to spend just $2.8 billion of the first $4.5 billion in Prop. 1B money this year. Bay Area folks are grumbling that they won't be able to complete several key projects they were hoping the bond would pay for. And LA Mayor Antonio Villaraigosa was on the streets Monday encouraging motorists to protest the failure of the commission staff to recommend funding for a new lane on the 405 freeway from west LA to the San Fernando Valley. Today Assembly Speaker Núñez will hold a press conference at 11 am to encourage the CTC to spend more of the money that was expected to go out the door this year.

Poll on governor's health care plan

Datamar, the private San Diego County polling firm, has a new survey out that shows Californians favoring Schwarzenegger's health care plan by a margin of 47 percent to 39 percent. Democrats approve by 60 to 25. Republicans disapprove by a margin of 32 (approve) to 58 (disapprove). People not registered with a party approve by 47 to 29.

I've been thinking that the governor should drop his attempt to tax employers, doctors and hospitals and go with a broad-based tax instead. This poll shows how difficult that would be. Asked if they would support a 1 percent sales tax to fund the governor's plan, 58 percent said no. Only 29 percent said yes.

January revenues down $1 billion

One of the more interesting monthly Finance Department reports in a while just came out, in which the governor's people confirm what close budget watchers knew already, that revenues came in nearly $1 billion below the forecast for January.

The strange thing is that the entire drop can be attributed to a year-over-year decline in estimated payments due Jan. 15 , those quarterly taxes paid by investors, small business owners and others whose taxes are not withdrawn from a paycheck. If this represented a sudden downturn in the economy, you might expect sales taxes and withholding from wages to also be down, but they are actually above forecast, as was the take from the tax on corporate profits.

If it's not the economy, what might have caused the drop? Finance suggests maybe it has something to do with "safe harbor" rules.

Says HD Palmer, deputy director of finance in a memo to reporters:

"Under safe harbor rules, taxpayers aren't subject to penalties for not paying sufficient taxes in a given year if they pay 100 percent of their prior year's liability in withholding and/or estimated payments (For taxpayers with income above $150,000, it's 110 percent of the prior year's amount).

Under this scenario, high-income taxpayers may have reduced their estimated payments for the fourth quarter of 2006 if or when they realized that their payments for the first three quarters of 2006 were sufficient to meet the safe harbor rules and avoid paying any penalties for underpayment/under-withholding. While the lack of any apparent drop-off in the economy would support this scenario, the fact that federal receipts appear to be tracking their estimates would seem to contradict it. But again, we won't have a more complete picture on this scenario – or the downturn scenario – until the cash comes through the door in late April."

The Gruber report

The governor's office recently released a paper by MIT economist John Gruber explaining how his economic model of California's health care sector works and how he thinks Schwarzenegger's plan would change it. Most of the numbers have already been released elsewhere, but they are all here now, in one place, and in context.

Some highlights:

--The plan would insure 4.1 million of the 4.8 million long-term uninsured in the state under the age of 65. Gruber concludes that the higher number you often see -- 6.5 million -- includes people who were uninsured at some point during 2005 but is more than the number who are uninsured at any given time.

--The other 700,000 are adult illegal immigrants. They would not be covered by the governor's plan but would be eligible for services from the counties.

--The number of people insured by their employers would remain at 18.8 million. Within that number, 800,000 would gain employer-based coverage, while 300,000 people would lose it and go into a public program and 500,000 would leave it voluntarily to buy coverage from the new public pool, taking their employer contribution with them.

--1.5 million people would be added to the public insurance rolls, including 900,000 children from families making less than 300 percent of poverty, 250,000 adults who are already eligible, and 400,000 adults who would be newly eligible. This would cost an additional $2.4 billion a year.

--About 1.9 million people would join the state-run insurance pool. The pool's costs are estimated at $224 per member per month, for a total of $5.1 billion. Of that, the government would pay $2.4 billion, individuals with that insurance would pay $1.4 billion and employers would pay $1.3 billion. Only about 7.5 percent of employers representing 5.7 percent of workers would pay the payroll tax.

--About 700,000 more people -- up from 2 million today -- would get private insurance not purchased by their employer.

Unfiltered

The guv's office continues to push forward on the multimedia front. Their latest experiment is with short video blogs featuring staff members and others giving their take on Schwarzenegger's policies. Today's was a UC Davis professor talking about stem cell research. So far, I haven't seen much that would impress a Capitol insider. Most of the stuff they're talking about is not new. But if the public finds its way to the site, it might help Schwarzenegger make his case in another forum free of the media filter.

Prop 1B update

The Transportation Commission staff today recommended funding only $2.8 billion worth of projects this year from Prop 1B's "mobility improvement" account rather than spending the full $4.5 billion that the measure envisioned for the first round. Why? Because they have doubts about whether all of the highway projects nominated by CalTrans and local transportation agencies could actually be built for the money they requested, given uncertainties about environmental approvals and construction costs. The staff suggested that the commission allocate the rest of the money in this first pot a year from now.

Prop 1B projects

The Transportation Commission has just released its staff recommendation for how to spend the first $4.5 billion from Proposition 1B. You can find the full report here, in pdf form.

A package deal

Gale Kaufman says the term limits change should come via initiative rather than through the Legislature in order to build public support for the idea and avoid seeming self-serving. That makes sense, but it seems as if the package approach would be even better, along the lines of what lawmakers and the governor did with the infrastructure bonds. You could have 1A be redistricting reform, 1B be some kind of political reform ala Perata, and 1C be the term limits change. They couldn't be linked by law but they could be sold as a package. Seems like that would make them all more likely to pass.

Less politics, more sports?

AM 1320, the Sacramento radio station that has carried the Air America Network, is dropping the liberal talk for sports radio and will become part of the ESPN radio network Feb. 26.

Says the Bee:

The audience that tuned into Air America shows simply wasn't broad enough... In short, there are more fans of left-handed pitchers and passers than there are of left-leaning politics.

A group of lefties -- activists, not athletes -- reportedly plans a protest.

Poll has Giuliani way ahead in California race

A new poll out today from Datamar Inc. in San Diego has Rudy Giuliani far ahead in the race for the Republican nomination in a California primary. The former NYC mayor has 41 percent. John McCain is at 17.4 percent and Mitt Romney has 10.5 percent.

Containing health care costs

At the hearing -- or briefing -- today in the Senate on the governor's health care proposal, I thought Sen. Sheila Kuehl asked some interesting questions.

One was whether Schwarzenegger's proposal would be affordable for the working poor. The problem, as she partly acknowledged, is defining affordability. The governor's plan would cost a family making $50,000 a year $250 a month for comprehensive coverage. That's not cheap but seems like it is in the ballpark. A family making more than $50,000 a year would be able to pay less than that if they wanted to but would be getting a catastrophic package that covered primary care and left them responsible for the first $5,000 in costs beyond that, and $10,000 out of pocket for the year.

The other good question she asked was whether Schwarzenegger's plan would constrain costs in the long run. The likely answer to that question is no. As long as we keep aging, as long as we keep inventing and using new technology, overall costs and costs per person are going to keep going up.

Here is a case in point. At a recent conference I saw a presentation on a new, robotic surgery tool for prostate cancer. The surgeon who was doing the presentation said they had found that the robot reduced complications, especially from nerve damage, reduced bleeding, shortened hospital stays, and got men back to work more quickly. But guess what? All of those wonderful things had the effect of dramatically increasing demand for surgery from men who were passing it up before and dealing with their cancer in other ways. And so it's likely that the overall costs are higher now than they were before. Is that a good thing or a bad thing? It depends on whether you are paying for the surgery or getting it, I suppose.

To contain costs over time we will either have to limit access to that kind of care or regulate the salaries of doctors, nurses and hospital executives, or both. That's where most of the costs are. But that's the one thing that nobody really wants to talk about. Not the governor. Not the legislative leaders. Not Kuehl (although she comes closest with her "global budget" for health care, which could be a tool for containing costs or expanding them depending on who is writing the budget).

No one who advocates universal health coverage should fool themselves into thinking that costs are going to stop going up.

Senate committee reviews the governor's plan

Today's event to watch in the Capitol will be the Senate Health Committee's review of the govenror's health care plan. The committee, of course, is led by Sen. Sheila Kuehl, whose long-term goal is the abolition of the health insurance industry and the creation of a single-payer, government run plan to replace it.

In the Bee's story today, Kuehl makes two points that bear further scrutiny, both involving the linch-pin of the governor's plan, the individual mandate.

First, the senator says she is uncomfortable requiring the working poor to buy insurance. But isn't that what single-payer would do? It would require everyone to have insurance, organized by the government and funded by taxes. To the extent that those taxes are payroll taxes, as Kuehl has proposed in the past, the burden on the poor might be just as heavy as it would be under the governor's plan.

Second, Kuehl says that while she does not like the individual mandate, she does like the governor's proposal to require insurance companies to cover everyone. But those two proposals cannot be reasonably separated. If insurance companies are required to cover everyone without regard to whether they are healthy or sick, then healthy people would have less of an incentive to buy coverage. They could simply wait until they got sick and buy it then. States that have tried the kind of insurance regulation the governor is proposing without the mandate on everyone to buy coverage have some of the highest rates in the nation, because their insurance rolls are heavy with sick people. California probably doesn't want to go there.

If I were a supporter of single payer I would embrace the individual mandate. It seems likely that once you require people to buy insurance, you open the door to more and more regulation of insurance, insurance rates, and the prices charged by doctors, hospitals, labs and drug companies. If you combine the individual mandate with a state-run purchasing pool for the working poor and others who find it difficult to buy coverage, pretty soon you have a very large parallel system that starts to look a lot like single payer. Over time it could swallow the existing system, or at least become the basic plan to which everyone is entitled while the private system survives to provide extras and premium care.

Bonner picked for BTH

The governor has picked Dale Bonner, a lawyer and former Pete Wilson aide, as the next Secretary for Business, Transportation and Housing. Here is his bio, from the governor's office:

Bonner has served as a partner in the law firm Epstein Becker & Green since 2002, where he specializes in government contracts, health care law and represents domestic and foreign technology and services firms in state and local procurement matters. From 1999 to 2002, he was of counsel to the law firm Hogan & Hartson. Prior to going into private practice, Bonner served in the public sector as commissioner for the California Department of Corporations from 1998 to 1999 and deputy secretary and general counsel for BT&H from 1996 to 1998. At the Department of Corporations, he was responsible for overseeing the regulation of California's corporate securities, financial services and managed care industries. Bonner previously was deputy legal affairs secretary in the Office of Governor Pete Wilson from 1992 to 1996. He serves on the California Science Center Board of Directors and is a past member of the BT&H Expert Review Panel, Los Angeles City Ethics Commission and California Performance Review Commission. He became a member of the California State Bar in 1991.

"I have had a life-long interest in public service and am honored Governor Schwarzenegger has chosen me for this position," said Bonner. "I look forward to working with the Governor, who has been visionary in his efforts to rebuild California's infrastructure and stimulate our economy."

Bonner, 41, of Los Angeles, earned a Juris Doctorate degree from Georgetown University Law Center and a Bachelor of Arts degree from the University of Southern California.

The job pays $157K and requires Senate confirmation.

Godfather style?

John Myers has the tape on Don Perata's comments today regarding term limits, a ban on gifts from lobbyists, and the early primary.

LAO: State should push health care IT

In this report, the LAO examines the development of electronic health records and other uses of information tech in the health care field and recommends that the state do more to encourage IT in health care.

Early primary bill set to move

The Senate today is expected to take up and pass the bill to move California's presidential primary up to Feb. 5 in 2008. The bill will be immediately transmitted to the Assembly, where it is also expected to move on the fast track.

How about a secretary for faith-based poverty?

The era of small government is apparently over. A Democrat and a Republican have each introduced bills to add a new agency to the governor's circle of advisers. Assemblyman Richard Alarcon, a Democrat from the San Fernando Valley, wants a Secretary for Poverty (shouldn't that be a Secretary Against Poverty?). And Republican Assemblyman Keven Jeffries of Riverside County wants an Office of Faith-Based and Community Initiatives in the governor's office.

Dan Borenstein's cancer

Contra Costa Times editor Daniel Borenstein, the paper's former political columnist, is in the middle of a multi-part, first-person series on his battle with cancer. You can read it here.

The early presidential primary

Someone asked me yesterday if I thought moving up the presidential primary would really benefit Californians in any tangible way. My answer: probably not.

Are the candidates going to come here and pander to our interests? First they have to figure out what "our interests" mean in a state of 37 million people divided along ethnic, income and ideological lines. Then they have to take some posiiton that somehow aligns with those interests, win the primary, win their party's nomination and win the general election, all before they even have a prayer of implementing whatever promise they might have made. So yes, California voters would get plenty of attention if our primary meant something. But it's a long way from that attention to any real action that stems from it. The general election vote is far more important: witness Bill Clinton's endless string of trips to the state and his efforts to steer goodies our way. That had nothing to do with the date of our primary.

The real benefit of moving the primary, if there is one, is in the sense that our votes made a difference in choosing the nominees. If Rudy is made viable by an early California primary or Hillary is put over the top or stopped in her tracks here, then Californians can be comforted by the realization that their votes mattered. So if that's important to you, then moving the primary might be significant.

On the other hand, with the rush to move all the primaries up, what happens if the California election comes and goes and there are still two candidates standing in each party's race? Then some tiny state voting in late February is going to deliver the knock-out blow to one of them. And we'll be long forgotten by then.

That could easily happen.

Bottom line: it's a crap shoot.

Mid-level changes in the horseshoe

Three changes today in the governor's inner office, two involving new employees and one with a new title.

One of the newcomers is Bob Gore, a veteran of the Deukmejian Administration who has since been working with the insurance industry, as a government affairs consultant and with a health care consumer group. He is going to be a deputy cabinet secretary in the horseshoe, working for Dan Dunmoyer, another former insurance industry hand.

The other is Lisa Page, a former account manager for the Perry Communications Group who worked on the governor's reelect. She'll be a deputy communications director working for Adam Mendelsohn.

The internal change comes with the bump of Jimmy Orr from chief deputy communications director to "Special advisor to the govrnor for Internet Communications." Orr, you might remember, was the brains behind "BarneyCam," which turned the president's dog into a videographer and put the result up on the White House web site. He's been working with Schwarzenegger over the past year to vastly upgrade the governor's web site with frequent live webcasts, blogs and other bells and whistles.

Schwarzenegger on immigration

Catching up on some old business – the tapes of the governor speaking privately with aides – the sexy parts obviously were his personal barbs directed at legislators, including Republican and Democratic leaders.

But after reading transcripts of all four conversations, I thought the most interesting part was his earthy, blunt assessment of the immigration issue (and not just because one of my columns came up in the conversation).

The immigration discussion was a rare glimpse at a politician working through a tough issue, one on which he is conflicted, and seeing how his mind works. And it wasn’t very pretty.

Schwarzenegger, speaking to speechwriter Gary Delsohn, says the 1986 amnesty and immigration reform “f----- the American people” because it legalized millions of immigrants while promising better enforcement of the border and employer sanctions, which never materialized. He complains about farmers wanting cheap labor but not being willing to pay for their workers’ health care. He compares the situation of illegal immigrants to “squatters” in Zimbabwe.

“They come and land, you can’t then get rid of them,” he says.

But then Schwarzenegger turns compassionate, or realistic, and acknowledges that it makes no financial or human sense to try to round up 12 million illegal immigrants and send them home. Many, he says, have children here who are citizens, or grandparents who are frail.

“So how do you split that family up?” he asks. “It doesn’t make any sense.”

The governor then talks about the proposed border fence, which he says he doubts will work because it will either have gaps, or immigrants will tunnel beneath it, or both. Plus it reminds him of the Berlin Wall, and he worries that it will send a message that we consider Mexico to be an enemy.

He swings back again and complains about a shopping center in the Los Angeles area that was built entirely for Spanish-speakers, and he says that it reminds him of Mexico City. He complains that too many Mexicans don’t seem to want to assimilate into the dominant American culture the way he thinks earlier waves of immigrants have done. He compares Mexican immigrants to house guests who refuse to leave or help with the family’s chores. Interestingly, on this sensitive issue he notes that while he has mentioned it gingerly, he can’t really share his true thoughts in public.

“There are certain things you can’t say,” the governor tells his speechwriter.

But it turns out that Schwarzenegger did say some of these things in public later on. Probably because he knew that his Democratic opponent, Phil Angelides, had a copy of the recording and might leak it at any moment.

You can read the entire conversation in a PDF file you can download here.

I'll be back

Blogging will be light Monday and Tuesday as I am traveling on assignment.

Plz vot 4 my bil

Here is an interesting story about the movement to ban text messaging and emails to lawmakers while they are in session on the floor.

Nothing to make light of

In this piece she wrote a few years ago, Virginia Postrel takes the difference between incandescent and flourescent lighting very seriously. An excerpt:

If clean air were really the goal, the law would attack pollution directly. It would go after car exhausts and power-plant emissions, not incandescent spotlights. If energy conservation were the goal, the law would reward using less energy. Or it would raise the price of electricity to encourage people to use less. It would focus on how much energy people use, not how they get to that total. It wouldn't tell retailers what light fixtures to buy.

The dirty secret is that this is really an aesthetic battle. It's the latest version of the old American conflict between pleasure and Puritanism... Efficiency-minded engineers regard anything more than simple illumination as waste. Environmental activists are repulsed by "unnecessary" consumption. The boards that set energy codes and evaluate their effectiveness include engineers and environmentalists. They don't include artists or designers, much less lingerie shoppers.

In the behind-the-scenes meetings that establish the rules, no one speaks for pleasure. You can't measure aesthetic enjoyment with a light meter, so enjoyment doesn't count. We wind up with a law that makes it illegal to reproduce a Victoria's Secret. Legislators don't even know what they've passed.

It's all about power

Today Assembly Speaker Fabian Núñez will be rolling out his proposal for redistricting reform. Yesterday, in comments to the California Newspaper Publishers Assn., he noted that no legislative body’s majority party has ever willingly given up the power to draw district lines. But he suggested his might be the first.

“Power is something which once you gain you don’t want to give it away to anybody,” he told the publishers. “People don’t give power away.”

But, he added, “The time has come for us to show the way.”

Next door, in comments to the Legislature’s Latino Caucus, Senate Leader Don Perata continued his longtime love-hate relationship with the idea. He keeps suggesting he is open to reform, but never really seems to have his heart in it. Same story on Wednesday:

“If we have to do it, so be it,” Perata said. But he added: “We are not going to give up power easily.”

If anything happens, it seems certain to be linked to a term limits measure that would allow both leaders to hold onto their posts after 2008.