Capitol Alert

Assembly Speaker Karen Bass boycotted this morning's Big 5 meeting because she said Gov. Arnold Schwarzenegger is pushing items "unrelated" to the budget and that negotiations should focus on solving the $26.3 billion deficit.

The Republican governor and legislative leaders are still discussing various permanent changes to state health and welfare programs that would tighten eligibility and Schwarzenegger believes would combat waste and fraud.

Democrats and labor unions insist that the governor is overstating the extent to which the state can save money from such changes, such as fingerprinting In-Home Supportive Services recipients and providers. But Schwarzenegger believes that such changes can bring in real cash, as much as $400 million to $500 million in IHSS alone -- and $2 billion in 2009-10 for all of his various changes to state programs.

Bass boycotted this morning's meeting on grounds that Schwarzenegger is demanding these changes in exchange for agreeing to fewer cuts. She said these reforms are "unrelated" to the $26.3 billion deficit and that leaders should instead work on other solutions that would bridge that gap, with a promise to consider the permanent program reforms later. She also warned she may not attend the afternoon Big 5 meeting.

"I don't believe any of the reforms he's talking about could even be instituted that quickly," she said.

Bass also said Schwarzenegger has demanded a "long shopping list" of 15-16 reform proposals unrelated to the budget, but Schwarzenegger spokesman Aaron McLear said that the governor has made his ideas public and that the changes would result in a direct budgetary savings.

Bass said one of the new ideas was to create a "massive new computer system" to manage the state's public assistance programs. Schwarzenegger has proposed consolidating enrollment information for the state's welfare-to-work, Food Stamp and Medi-Cal recipients, according to a white paper his office released last week.

Democratic Senate President Pro Tem Darrell Steinberg, D-Sacramento, and Senate Republican Leader Dennis Hollingsworth, R-Murrieta, had a more positive spin on the morning's Big 5 negotiations. Steinberg said "we're trying to work through the various issues, and it's difficult obviously because the economy and the situation is so difficult." Hollingsworth said, "I think there's progress slowly being made."

But Bass said she believes talks have gotten worse, not better. And she publicly blasted the governor for comments he made in Sunday's New York Times Magazine, in which he said he explained why he doesn't go home depressed by budget woes.

"Someone else might walk out of here every day depressed, but I don't walk out of here depressed," Schwarzenegger told the Times. Whatever happens, "I will sit down in my Jacuzzi tonight," he said. "I'm going to lay back with a stogie."

"He said he's happy to just go home and sit in his Jacuzzi every night," Bass said Monday. "I'm very, very concerned about this. He doesn't seem to be concerned that people are getting IOUs, and all he has to do is go out and blame the Legislature."

The governor responded that he comes from a sports background, where he learned that he "can sometimes tune out (pain) through meditation or other forms, so you can go and have a few hours of relaxation," he said. "But at the same time, I have to say I've had a lot of sleepless nights about our budget and about what that means when we cut certain programs, and about the people behind the dollar figures when we make those cuts."

Schwarzenegger seems to be rethinking his proposal to suspend Proposition 98's guarantee for education funding, mentioning today that budget aides are researching whether $3 billion suspension is viable.

"We are right now having that discussion because that's a very, very complicated issue," Schwarzenegger said. "There are very, very few people that know what happens. Do we need to suspend it, can we do it without suspension, what does that mean with the kind of revenues we anticipate? So I think the four legislative leaders and their staff, including our staff ... everyone is working on this and trying to figure out what those numbers mean."

Democratic Assembly Speaker Karen Bass, D-Los Angeles, emphasized that "suspending 98 is unacceptable."