There's a great diary up on the rec list at Daily Kos about the devastating impact of the Illinois budget crisis. Here in California, where we seem to have invented the budget crisis, we're facing a similar catastrophe. Because Governor Arnold Schwarzenegger and his Republican cronies blocked a solution to the state's looming cash crisis late last night, California is going to lose $7 to $8 billion in savings. And as a result of that, California's government is going to have to pay IOUs to those it owes for the first time in 17 years.   Read More »

How will budget cuts help promote economic growth?

It's a question that I rarely ever see asked, and one that is *never* answered, certainly not in a state where the conventional wisdom is that revenue increases are impossible, even though we've never tried to make them happen. Instead the supposed "political reality" of no new taxes is trumping the economic reality that taxes are preferable to spending cuts in a recession. The result is that spending cuts are treated as inevitable even though they are a sure path to Depression.

Yesterday's LA Times had a remarkable editorial calling for no delay or hesitation in making the cuts. But the only time they made mention of the economic impact of the cuts was when they argued against permanent revenue solutions:

Be smart about new taxes. Reject, for the current year, broad-based sales and income tax increases as damaging to the recession economy and as politically infeasible, but move forward on carefully targeted temporary taxes, specifically on tobacco, alcohol and snack foods, to prevent cuts in particular health and human services (but not necessarily agencies).

And yet this ignores the evidence gathered by Peter Orszag and Joseph Stiglitz which showed that income tax increases were actually *better* for the economy than spending cuts.

Had the opinion page editors read George Skelton's column that ran in the same edition, they might have understood how that abstract point works out in practice:

Faced with what he calculates to be a potential $24-billion budget deficit in the fiscal year starting July 1, Gov. Arnold Schwarzenegger has proposed cutting state supplemental payments for the elderly and disabled down to the minimum allowed by federal law. It would be their third cut this year.

The Legislature already has approved a $20 monthly cut beginning July 1, lowering the grant for single people to $850. That's it: No food stamps, and that includes any Social Security.

This was the cut Jean had read about. But the governor also is seeking another $20 trim starting in September, reducing the benefit to $830.

The rent for her one-bedroom condo is $850.

What Jean's story shows is the ripple effect of safety net spending. I've heard it said that Cal-WORKS, for example, is de facto one of the most important rent subsidy programs in the state. When the state cuts aid to the needy, whether it's a poor family or an AIDS patient or a college student, they have to make up the difference out of their own pocket. That means they have to cut back on other spending, which means more foreclosures, more rental vacancies, less consumer spending, less tax revenue, fewer jobs, and more business failures.

Nobody in Sacramento has explained to the people how these cuts will help produce economic recovery. They ought to, and we should demand that we get such an explanation before any legislator votes for a single cut. I want an answer to the $24 billion question. Who in Sacramento will give it?

As Arnold's horrific budget cuts get wider exposure, Californians are beginning to fight back. Over the next few days there will be several rallies around the state to stop these cuts.

Tonight at 5pm in Los Angeles there is a rally to Stop the HIV cuts - cuts that include slashing funding for helping AIDS patients get the medication they need to live. The rally is at the Hollywood Forever Cemetery and will take place rain or shine. Another rally will happen on Wednesday at the State Capitol in Sacramento - more information can be found here.

Also in Los Angeles UCLA students will be rallying Wednesday evening at Bruin Plaza at 6:30 to protest the proposed elimination of Cal Grants - find more at the Facebook event page.

The above events are also listed on our events page. If you have an event you want Courage Campaign members to know about, post it there - and direct others to the page as well!

Of the numerous disturbing and troubling aspects of Arnold Schwarzenegger's insane "let's destroy the safety net!" proposal is how the need to cut has become conventional wisdom in Sacramento. So says Darrell Steinberg:

Democrats realize they will have to agree to "painful" cuts and have vowed to comb through programs to find waste and inefficiencies, said Senate President Pro Tem Darrell Steinberg, D-Sacramento.

"But we must continue to find a way to invest in health care for children, invest in college opportunities and scholarships for young people, to continue to invest in helping people from assistance to work," Steinberg said. "So, we need to be surgical in the way we go about in cutting, *and cut we will.*" [emphasis mine]

Actually, Senator Steinberg, what you *will* be doing is ensuring California suffers a prolonged and deep Depression.

Cutting the safety net is an act of economic suicide. Given the reasons for the current downturn, cutting away the safety net will merely reinforce the recession and ensure that California experiences no near-term economic recovery. California's 121 Herbert Hoovers will drive the state into Depression the way Hoover himself did in 1930-31 by insisting on massive cuts to government spending.

Here's how it works. As Edward Harrison explained at Naked Capitalism yesterday the US economy likely faces a "balance sheet recession" caused by a massive increase in saving as people seek to purge debt:

Richard Koo goes further in his book “The Holy Grail of Macro Economics.” Here, he argues that the unwind of great bubbles suffers from what he labels a ‘balance sheet recession.’ In essence, companies go from maximizing profits, as they had done in normal times, to a post-bubble concern of reducing debt. Regardless of how much priming of the pump monetary authorities do, the psychology of debt reduction will limit the effectiveness of monetary policy as a policy tool.

In my view, the catalyst for this change of psychology is the ‘debt revulsion’ that ushers in the panic phase of an asset bubble collapse.... the household sector has gotten religion about debt reduction as the savings rate has increased dramatically since Lehman. In fact, I would argue that companies learned their lesson about debt from the aftermath of the tech bubble. It is the household sector in the U.S. (and the U.K.) which is heavily indebted. Therefore, if the psychology of a balance sheet recession does take form, it will be the household sector leading the charge.

In sum, the psychology after a major bubble is very different than the psychology before its collapse. The post-bubble emphasis becomes debt reduction and savings, making monetary policy ineffective, not because financial institutions are unwilling lenders but because companies and individuals are unwilling borrowers. These are forces to be reckoned with for some to come.

And sure enough, the saving rate is still on the increase as Americans, and Californians in particular, stop spending and use their incomes to pay down debt and put money in the bank for a rainy day.

It's that phenomenon which is acting like a scythe across the economic landscape. Nobody spends, so companies aren't making money. Unless consumers feel capable of spending again, there will be no economic recovery.

What Harrison doesn't examine is the importance of the safety net. If people feel confident that their basic needs - housing, food, health care - can be met if they lose their job, then the mania to save, save, save would be eased. However, if they do *not* feel confident that the safety net is there, they will save every penny they can, reasoning that they'll need it to live.

I know that's true for me. I use one of my two monthly paychecks to pay bills, and the other goes straight into the savings account. I'd be a fool not to. As California is poised to eliminate its safety net, it would be irrational and reckless to not hoard every dollar that came in.

That's why Arnold's budget cuts are so economically stupid. They will reinforce the trend toward saving and ensure that we do not have an economic recovery.

There is one other pernicious aspect of Arnold's cuts. In some ways we can see the health care cuts in particular as a bailout of the private insurers. By ending state aid for children's health care - even though Arnold gives up 3 times as much federal money as CA would save - and ending other key health care services, Arnold will force families that need treatments to send money out of their own pocket to private corporations. That will help enrich a few wealthy executives, but it will do absolutely nothing to improve the balance sheets of already strapped households, and will merely reinforce the "save at any cost" attitude.

Other aspects of Arnold's budget are economically ruinous - the negative impact of park closures on tourist-dependent towns, the negative impact of mass state worker layoffs to the entire Sacramento region, the negative impact of mass teacher layoffs, etc.

If Arnold and the Democrats wanted to ensure California experienced a prolonged Depression, they could do no better than to follow the policies they have so far supported. Just as Keynes identified the future Great Depression in the flawed and punitive Treaty of Versailles, so to can we identify unending misery in the flawed and punitive 2009-10 budget.

I don't know about you, but I can't find anything in the outcome of the May 19 election that justifies, say, ending welfare entirely, or denying AIDS patients life-saving medicines, or throwing a million kids off of health care, or closing the state park system, or eliminating affordable access to higher education. Can you?

In fact, even though polls show voters emphatically *reject* that kind of budgeting Arnold Schwarzenegger has gone ahead and proposed it anyway. In his best effort to play the role of a modern-day Herbert Hoover he has decided to interpret the election as a mandate to push through the radical attack on government he has always wanted to lead.

In recent hearings in the Legislature - which in themselves prove the value of an open budget process - the scope of the cuts has become clear, and even legislators who were just last week speaking of the need for cuts are starting to have second thoughts, as Anthony Wright reported:

Some members, like Senator Denise Ducheny, asked whether some of these cuts would not create more costs, as people end up in emergency rooms or elsewhere, even within the budget year. "What makes you think this doesn't create a cost shift?... Will people just die and we won't have to take care of them?" she asked.

Senator Mark Leno talked about how the AIDS Drug Assistance Program "literally keeps people alive," and asked for information about the increased cost of ermegency room visits as a result of the cut. Senator Alan Lowenthal asked if there was a "longitudinal" analysis, and asked for the "long-range implications" of these cuts.

Assemblywoman Noreen Evans was alarmed when she noted that dialysis would be cut for some patients, exclaiming that her father was going through such treatment, and was not optional. She also noted that some cuts, like the elimination of HIV Testing, would have public health impacts. Assemblyman Kevin DeLeon pointed out the cuts to community clinics, arguing that for many Californians, "this is the only safety-net they have."

As the Sac Bee reports, even some Republicans acknowledge that there is such a thing as a successful government program:

Assemblyman Danny Gilmore, R-Hanford, wrote an opinion piece this month for the Bakersfield Californian telling constituents how to apply to Healthy Families and touting it as a program that works "especially well."

Of course, the Zombie Death Cult still has its adherents, like Chuck DeVore:

But Assemblyman Chuck DeVore, R-Irvine, said the state must scale back because it cannot afford the benefits it provides. DeVore asserted that overregulation and high taxes have stifled businesses and led to layoffs, while California has compounded the problem with too much public aid.

"When you have an unemployment rate as high as it is in this state, it should be a signal to people to look for jobs in other states with more jobs and a lower cost of living," DeVore said. "We have had policies subsidizing poverty in this state for years, and we can't keep doing that."

And this guy wants to be in the US Senate! The irony is that even his own constituents disagree with him. Orange County residents don't want their parents to lose dialysis treatment. They don't want their kids to lose Cal Grants. They don't want to be barred from going to the nearby beach.

As we have been explaining for months now, these kinds of cuts are suicidal. They will make the budget picture worse by costing more money than the cuts would save. They will certainly make the economic crisis FAR worse by forcing consumers to pull back even further on spending in order to replace the lost state aid. Arnold Schwarzenegger is demanding a Depression.

Unfortunately the legislative leadership has woefully unprepared themselves to respond. Instead of spending the months leading up to the May 19 election talking about protecting Californians against horrific cuts, the Democratic leadership instead went along with Arnold's scare tactics and made a cuts-only budget sound inevitable - and then doubled down the day after the election.

It's time for legislators to "just say no" to these cuts. And not say it in order to accept lesser but similarly damaging cuts, but say "no" in order to walk through the wide open door that leads out of the Jarvis nightmare scenario. We have a golden opportunity to bury 30 years of anti-tax nonsense - Californians understand that taxes are necessary to prevent people from dying and to provide economic recovery. There is widespread support for raising taxes on the wealthy, closing the loopholes, and ending a failed prisons policy that costs us billions.

It's time for legislators to move beyond outrage and to start showing real leadership against this madness. If they want to restore their reputations with voters, the best way to do so is to show that the Legislature still understands common sense and can give the people what they want - a fair tax system that will stop these cuts in their entirety.

As we recover from the unjust decision handed down by the California Supreme Court yesterday, we are reminded of our determination, forged in the angry days after the passage of Prop 8 in November, to restore marriage equality at the first available opportunity.

Now that the California state courts have closed themselves to the cause of equal rights, it's time we dedicate ourselves to organizing to win. We will win in 2010. And if we don't, we'll win in 2012. And if we don't, we'll win in 2014.

Courage Campaign Managing Director Eden James explained this to the crowd in an inspirational rallying cry of a speech at the rally in San Francisco last night:



We reinforced this message in the following email to our members yesterday:   Read More »

With the truly odious decision upholding Proposition 8, three things are now very clear:

1. California no longer recognizes equal rights.

2. California's constitution is totally broken.

3. It is time for ALL of us to fight back.

The Courage Campaign, where I work as Public Policy Director, exists to respond to all three of those things.

We are going to work with our partners in the marriage equality movement in the effort to repeal Proposition 8 at the ballot box. We are going to restore equal rights to *all* Californians. And we're going to fix our broken constitutional system to ensure this kind of thing *never* happens again. Below I explain what you can do to help.   Read More »

With the predictable failure of the five budget propositions, it's time for progressives to step up and lead the fight to not only fix our budget, but replant the seeds of economic growth, and rebuild confidence in our government.

There are two broad elements of a May 20 strategy - policy and attitude. As President Obama has demonstrated, they must be intricately linked to be effective.

Voters rejected a campaign of fear. They showed they won't respond to scare tactics. Either they'll vote no, or stay home. Progressive organizations, like the Courage Campaign, instinctively understand that. We organize to empower and offer solutions.

Despite what some like to claim, progressives have always had an alternative to the May 19 initiatives in mind. The Courage Campaign has proposed a three-step process to fix the state:

1. Majority vote for budget and taxes. The Courage Campaign has been advocating for an end to the 2/3 rule for a long time. Today we're partnering with CREDO Mobile and the League of Young Voters to offer a Declaration of Democracy for a Majority Vote Budget. It's time that we brought democracy back to the legislature. We all know that the 2/3 rule prevents us from passing good budgets. But it also undermines public confidence in the legislature, since nobody can be held accountable and since the 2/3 rule produces unworkable compromises that voters immediately see right through.

Some may claim voters are not yet ready to support this change. Some recent polls suggested there are majorities or near-majorities in favor of restoring democracy. More fundamentally, it's time to build a movement to fix the mess. Courage Campaign doesn't expect this to happen overnight. That's why we're recommitting ourselves to a long-term organizing effort to get this done.

2. Restore responsible taxation of the wealthy and corporations. Some may argue that the public doesn't support repeal of the 2/3 rule for taxes and budgets. What better way to build public support than show the consequences of the conservative veto than by making a *strong* push to demand the wealthy and corporations pay their fair share? Besides, one of the key reasons our budget is in crisis is because we have been cutting taxes on those with the greatest ability to pay. This makes state revenues heavily dependent on consumer spending from working- and middle-class people, spending that is volatile to short-term economic dislocation.

California needs to follow the tax policies of President Barack Obama and reverse three decades of giving tax breaks to the wealthy and to large corporations.

Under Republican governors Ronald Reagan and Pete Wilson, the highest income earners in this state paid taxes at a higher marginal rate than they do today. Now, an individual making $900,000 pays the same tax rate as someone making $50,000. Oil companies pay the same property tax rate as an elderly homeowner -- and unlike Alaska and Texas, oil companies pay no tax on the oil they extract in California. This is absurd and it must change.

Republican legislators will scream and cry, but will they actually vote no on these popular taxes? If they do, we set up victories in 2010. If they vote yes, we help ease the existing budget mess.

3. Convene a Constitutional Convention. The state needs a broad range of changes to the way its government operates. But more fundamentally, it needs a constructive process to produce those fixes. We've gone about as far as the gimmicky special election approach can take us. A Constitutional Convention allows the entire state, whether they're delegates or not, to engage in a debate about the core issues of how our government should react to a 21st century crisis.

We don't believe a Convention should tackle social issues or human rights, but if it's focused on fixing our budget and government, on providing more democracy and participation in the public sector, then we can finally get this state moving in the right direction. Of course, the delegates need to represent the state's diversity, and voters will rightly have the final say. But it's better than the status quo, and will help provide a better state.

Finally, *attitudes matter*. It's time we got aggressive. Democrats should NOT accept cuts as inevitable. They should NOT assume Republicans are inflexible. The Zombie Death Cult is living on borrowed time. President Obama has shown that Republicans are unpopular and vulnerable. We would be fools to not take advantage of that unpopularity here in California. Remember that Republicans have been in steady decline in both registrations and election outcomes since 1996. We can beat the conservative attack on California - if we realize we've had the tools to do so all along.

Below is the email we sent our members yesterday morning.   Read More »

California's media likes to play up Tom Campbell as some sort of "moderate" or "sensible" Republican. As compared to Attila the Hun this might be plausible. But even a cursory glance at his alternative budget solutions shows that he is a typically conservative politician. Sure, his conservatism seems to be of the Ronald Reagan sort as opposed to the Grover Norquist sort. But there never was much difference between the two, except in tone, which is apparently all that matters to the media.

Campbell's proposed budget claims to want to solve a "systemic" crisis in a way that doesn't hurt our ability to recover from the economic crisis. Yet his budget merely offers a different method to achieve the same downward spiral that has afflicted the state - particularly Campbell's total ignorance of the revenue drop and the negative impact of spending cuts on consumer spending.

Tom Campbell believes the budget can be balanced by hammering social services, even though there is unprecedented need for these services. An example of his proposals:

•15% salary reduction for state workers OR 15% layoffs of state workforce

• $156.7 million savings in Cal Works by implementing Federal work participation requirements.

• $248.5 million savings by reverting to federal minimums on Supplemental Security Income and the State Supplementary Payment.

• $114.1 million savings by reducing compensation to in-home supportive service workers to the state minimum wage.

• $882 million savings in Medi-Cal, provided California receives a federal waiver from terms of the American Recovery and Reinvestment Act.

In other words, he's offering a mixture of attacks on the poor and attacks on Obama's stimulus. His rationale:

1. California must, in large part, return to national standards on welfare and health care; we cannot afford to provide more than the national average in areas where we have long exceeded those levels;

2. California must ask those capable of taking care of themselves to do so;

3. California must not undercut its ability to bounce back when the national recession ends. This means being careful about cutting education, especially Community Colleges where much workforce retraining takes place.

This is complete nonsense. First, the national standards on welfare and health care are woefully insufficient. Campbell acts as if there is no national health care problem, as if there is no issue with the working-class finding and holding jobs. Campbell is a typical Republican - identifying with the wealthy and totally ignorant of how everyone else experiences life in California.

Second, how the heck are people supposed to "take care of themselves" in a recession like this?! Campbell is the sort of guy who drives through a poor community in his Jaguar (or whatever he drives) and shakes his head saying "why don't they just get a job?" That statement alone is proof that Campbell is intellectually unfit for office by virtue of his unwillingness to understand the challenges facing most Californians.

Campbell also proves he has no clue about modern economics - otherwise he wouldn't so blithely ignore the work of Nobel Laureates who point out that if you cut social service spending, folks have to replace that lost money by curtailing consumer spending, hammering jobs and tax revenues.

Third, Campbell's whole budget blueprint is designed specifically to *prevent* California from enjoying economic recovery. How are people who have no health care benefits supposed to find work? How are people supposed to find work period if you're scaling back Cal-WORKS? How are small businesses supposed to open when the state is laying off workers or cutting their salaries?

Campbell's also internally inconsistent. He states he wants to be "careful about cutting education" and then proposes:

$150 million unallocated cut to UC and CSU (I realize this would require further increases in student fees, or improved fund-raising).

Tom Campbell isn't some kind of new Republican. He's no moderate. Instead, he is the *same exact kind of Republican* that the party has offered dating back to Herbert Hoover. He is a man of the upper class, determined to protect the wealth and privileges of the upper class at the expense of everyone else.

Campbell's economic policies are no different than Reagan's, or Bush's (either one, 41 or 43). Campbell offers the vast majority of this state only reduced services and less money in their wallets. His Hooverite policies would merely make the recession worse, and ensure that when economic recovery does come, only Campbell's rich friends see any of its benefits, while everyone else is left behind. Which will apparently be just fine with Campbell, since everyone else should just take care of themselves anyway.

We've all seen this movie before. We know how it ends - we're living through it right now. Californians will reject Campbell's Hooverism. But will the media report on exactly what Campbell offers? Or will they continue to lie to their readers and claim he's some kind of "moderate"? I'm not exactly holding my breath.

I had just started high school in 1993 when President Bill Clinton backed off his pledge to allow LGBT Americans to openly serve in the military. Little did I know that decision would profoundly impact the life of one of my classmates.

Dan Choi graduated from Tustin High School shortly after I did. He got a prestigious appointment to the US Military Academy at West Point, while another of our classmates got an appointment to the US Naval Academy at Annapolis that same year.

Our mutual friend is still serving in the armed forces. Dan Choi, after a distinguished career in the Army that included a tour in Iraq, is not. The only difference between them is that our friend in the Navy is straight - and Dan is gay.

I hadn't kept in touch with Dan after high school, until one evening in March when I was watching Rachel Maddow's MSNBC show and saw him on the show speaking out against the "Don't Ask, Don't Tell" policy. Dan spoke three words that he knew violated Army policy - "I am gay." Sure enough, as a result of that interview, Dan was served with a letter discharging him from the Army.

I stand with Dan Choi not just because we were classmates, but because we are both human beings who deserve fully equal rights. If I could serve in the military (if I chose to) as an openly straight man, Dan should be able to continue serving in the military as an openly gay man. There is no reason whatsoever to draw a distinction between the two - particularly at a time when the armed forces can use all the Arabic-trained, combat veterans who command the respect and loyalty of their fellow soldiers.

President Obama has promised to end the "Don't Ask, Don't Tell" policy, but appears to be waiting for the right political moment. The right political moment is NOW. Soldiers like Lt. Dan Choi, 2nd Lt. Sandy Tsao, and any other LGBT soldier cannot wait for the president to find the right moment. That's why the Courage Campaign and CREDO Mobile have launched a petition to President Obama asking him to reinstate Lt. Dan Choi and repeal "Don't Ask, Don't Tell."

President Obama should suspend all discharges under the DADT policy, and immediately ask Congress to send him a bill repealing the policy from our laws.

Below is the email the Courage Campaign and CREDO Mobile sent to our members today.   Read More »

We'd need a whole pod of whales to illustrate the FAIL that is Governor Arnold Schwarzenegger:

The Republican governor's Department of Finance has projected a budget gap of $15.4 billion if the May 19 special election ballot measures pass and $21.3 billion if they fail. The state would gain nearly $6 billion in solutions if Propositions 1C, 1D and 1E pass, including $5 billion in 1C's borrowing against the California Lottery.

Arnold took office promising to succeed where Gray Davis supposedly failed. Now Arnold has produced deficits FAR worse than anything Davis faced. Arnold is plowing ahead with his apparently illegal "May Revise" to scare voters. But as the SacBee article notes, Arnold can't actually propose that much in cuts without risking the stimulus:

The governor did not disclose his proposed solutions Monday. But he warned groups last week that he will consider borrowing $2 billion from cities and counties, releasing low-level offenders in state prisons and reducing school funding by $3.6 billion. The state also could eliminate its planned $2 billion reserve.

California faces limitations in how much it can cut without jeopardizing federal stimulus funding. For instance, the state cannot cut too much in higher education, K-14 schools or Medi-Cal eligibility without running afoul of federal stimulus guidelines.

Cities and counties will revolt before being pushed into bankruptcy by a raid on their already bare cupboards. Arnold is either going to have to declare default, or embrace some truly progressive solutions like majority vote budgets and taxes on the wealthy and corporations.

Instead of providing leadership, Arnold is merely trying to scare voters into giving him one last chance to ruin our state. Voters are rejecting his tactics, his propositions, and ultimately, Arnold himself.

Worst. Governor. Ever.

Now this is a federal intervention I can believe in:

The Obama administration is threatening to rescind billions of dollars in federal stimulus money if Gov. Arnold Schwarzenegger and state lawmakers do not restore wage cuts to unionized home healthcare workers approved in February as part of the budget.

Schwarzenegger's office was advised this week by federal health officials that the wage reduction, which will save California $74 million, violates provisions of the American Recovery and Reinvestment Act. Failure to revoke the scheduled wage cut before it takes effect July 1 could cost California $6.8 billion in stimulus money, according to state officials....

The SEIU said in a statement that it had asked the Obama administration for the ruling.

Combined with the CFT lawsuit this action shows a new aggressiveness coming from progressive unions, and is *precisely* the right strategy to take against those who would demand or accede to the economically insane policy of wage cuts for these workers. The failure of the May 19 election proves the failure of an accommodationist strategy - Republican demands for government destruction can only be countered through strong pushback.

This is also a welcome step from the federal government, which did not have to make this ruling. It would be nice if DC would get even more aggressive about oversight of the stimulus money. The education stimulus, for example, ought to have been conditioned on states refusing to layoff teachers or cut education budgets.

By demanding this federal ruling, and by suing over the Prop 98 funds, SEIU and CFT have done far more to help prevent crippling budget cuts than the millions spent by CTA and other progressive organizations trying in vain to convince Californians to accept a bad deal that will make the budget situation worse, not better.

Note: I work for the Courage Campaign

Now that the California Democratic Party has gone on record as supporting an investigation into Judge Jay Bybee for his role in authorizing Bush's torture program, it's time to put that resolution to work.

Today the Courage Campaign has joined David Dayen and other California activists in a campaign to pressure California Democratic members of the House Judiciary Committee to investigate Judge Bybee as a first step toward his impeachment. The six members are Howard Berman, Zoe Lofgren, Linda Sánchez, Adam Schiff, Brad Sherman and Maxine Waters.

Hundreds of Courage Campaign members have made calls today. Several have reported that Adam Schiff supports an investigation, while the other five are giving polite but noncommittal responses.

If you haven't done so already, please take a moment to call at least one of the six today. Even if you don't live in their district, as members of the Judiciary Committee they are the folks who can begin the process of holding Judge Bybee accountable, and as such they're responsible to all Californians, not just their own constituents.

Below the flip is the email we sent to our members.   Read More »

April is the state's big revenue month, as personal income taxes flow into the Franchise Tax Board and refund checks flow out (leaving me a whopping $200 richer). Unsurprisingly, this April's receipts were significantly below expectations:

April, by far the largest tax collection month for California, ended in a whimper, coming up more than $1.8 billion short in personal income and corporate taxes.

California was about $750 million short of projected tax collection after March, and April's shortfall puts it $2.5 billion behind for the fiscal year ending June 30.

So we're already $9 billion in the hole. If Propositions 1C, 1D and 1E fail, as it looks like they will, then the deficit could grow to $16 billion.

The size of the May 20 deficit suggests the need for Democratic legislators - the same people who constantly ask "what's YOUR plan?" of progressive opponents of the flawed May 19 propositions - to answer that question themselves. A $9 billion deficit doesn't seem like a good time to straitjacket ourselves further with a spending cap and a "rainy day fund on steroids" via Prop 1A, or blow a $2 billion hole in the budget by selling more lottery bonds than there are lottery revenues.

And so today Dan Walters asks the same question I asked a couple weeks ago - What's Plan B?:

More taxes? Rejection of Proposition 1A, the linchpin measure, would not only short-circuit the taxes enacted in February but probably make any additional levies politically impossible. Democratic leaders could try again to enact taxes without Republican votes but would face a legal challenge and political fallout. A massive bailout from Washington? Unlikely.

This is an immense mess, partly caused by the recession, partly caused by years of fiscal irresponsibility. And it may be the day of reckoning that Capitol politicians had long avoided, compounded by the obvious anger of voters....

Wholesale slaughter of state spending may be their only option. This is a pivotal point in California political history, a fiscal Armageddon.

This is where the absence of a coordinated progressive and Democratic pushback against the demand to cut spending and the ideologies that underlay it is so vital. Instead Democratic legislators have cast the post-May 19 spending cuts as somehow inevitable, instead of rallying the base to fight those cuts. Had that rallying effort been done I am convinced that there would be greater support from Democrats and progressives for the May 19 propositions.

The May 20 strategy, as I see it, involves at least these pieces:

• Majority vote budget



• Wealth taxes



• Reverse corporate tax cuts



• Push repeal of the 2/3rds rule



• Immediate and meaningful prison reform



• Legalization, regulation and taxation of marijuana

Walters speculates that with record low approval ratings the legislature isn't in any position to lead these kind of changes. Here I disagree. I think their low ratings are precisely /because/ they haven't yet offered these kinds of solutions.

The other argument is of course that none of the above are possible because of Republican obstruction. But that's begging the question. It is *long past time to challenge Republican obstructionists.* This is a party that has hardly any public support any longer. They are vulnerable to attack.

The best place to start is higher income taxes on the wealthy. 75% of voters support those taxes, according to the recent Field Poll. Democrats should pick a *big* fight on that starting on May 20. Force Republicans to use the 2/3 rule to kill those taxes - and you've got yourself on hell of a winning issue for 2010. Or you actually force Republicans to climb down and back those taxes.

The point is that no matter what happens on May 19 we're going to have a massive deficit and therefore a fight on our hands on May 20. Let's come together as progressives and Democrats, no matter our views on the propositions, to prepare to win that battle.

In some respects the battle over the May 19 propositions is overblown. It's important to kill the spending cap in Prop 1A, and Props 1C-1E represent some dangerous one-time budget solutions that will probably cause more problems than they solve.

But none of these propositions will change the fact that on May 20, California will again be facing a multibillion dollar budget shortfall. And in turn that raises the specter of default. California cannot go "bankrupt", but we can find ourselves without enough money to pay those we owe. The state flirted with that possibility in February, and although John Chiang is confident that we will have enough money to last through the summer, the ongoing collapse of the global economy and its kneecapping of our state's revenue have already caused our bond ratings to sink to the lowest in the nation.

We're only able to keep the lights on through continued borrowing, and that has been helped by federal hints and proposals to guarantee some or all of our debt. But that may not be enough to resolve growing concerns among bond buyers about California debt, and as a result a high-stakes standoff appears to be developing, as Felix Salmon explains:

The more interesting response was, basically, "my moral hazard trumps your moral hazard". In other words, it's true that because California has insured itself against default, there's moral hazard there: whenever anybody is insured against anything, the likelihood of that thing happening goes up. But at the same time, there's a bigger moral hazard at play: the federal government will never let California default, it's too big to fail. And so when push comes to shove, California will get a federal bailout before it defaults on its bondholders.

I suspect, however, that the moral hazard seniority works the other way around: the fact that California's bondholders are insured means that it's not too big to fail, and that in fact a payment default by the state would have very little in the way of in-state systemic consequences. (I have no idea what it might do to the monolines, but if they can't cope with a single credit defaulting, they really shouldn't be in the business they're in.) The federal government might step in to mediate the negotiations between the monolines and the state, but it's not even obvious why it would want to do that.

The basic issue here is what exactly would happen if California defaulted - who blinks first, who has to accept getting less than they are owed. As I see it the possible outcomes look like this, in order of increasing regressivity:

1. Federal government steps in to provide operating capital to California in order to both pay what the bondholders are owed and prevent the state from having to make crippling cuts. This is essentially what has been done with the big banks, and a solid argument could be made for doing it with CA - if we have to close schools or hospitals, the economic downturn WILL become a Depression.



2. Federal government makes the bondholders whole but demands California implement crippling budget cuts in order to repay the feds for the cost of helping insure the bondholders. This could be ameliorated with some form of cramming down the bondholders, but folks like you and I would get crammed down even more.



3. The feds take the Gerald Ford route and tell California "drop dead" - CA under law cannot fail to pay the bondholders, so we're on our own. We could try and negotiate with them, or pay outright. This basically turns California into a Latin American IMF client, having to cramdown working people so the bondholders get paid.

It's worth noting just how important that last point is. As David Harvey explained in A Brief History of Neoliberalism, the 1975 New York City default was a major turning point in economic history. Ford's Nixonian advisers argued that NYC shouldn't be bailed out in order to hit liberals and unions. As a result NYC had to negotiate with the bondholders and was forced to make massive spending cuts, reversing 40 years of policy of increasing services to help working people in the city.

Once the NYC strategy was rolled out and shown to be a success, it became the seed of the IMF's "Washington Consensus" moves in the 1980s and 1990s to impose right-wing economics on nations that needed their aid. NYC was thus one of the earliest victims of the shock doctrine - California may well be next.

Someone is going to have to pay more to solve this mess. The question before Californians is whether the low- and middle-income will be the ones to pay, as we have been in the recent budget deals, as we have been in Asia and Africa and Latin America - or whether the federal government will do the right thing and protect our public services and those who depend on them.

Which is why the Zombie Death Cult is so insistent on forcing the state to go over a cliff. They're salivating at the chance to shock doctrine this state, always have been.

Well I am just shocked, shocked to see that the wingnuts are using swine flu to bash immigrants. As I predicted over the weekend as soon as I heard that there was a swine flu issue in Mexico, the usual suspects who believe that anyone from south of the border is inherently inferior, criminal, disease-ridden and just plain subhuman are using this issue to try again to rally Americans to hate their neighbors, whether they live next door or across an artificial line.

This is a sadly familiar story to those of us who study California history. As recounted in Nayan Shah's excellent book Contagious Divides, a 1905 plague epidemic in San Francisco was blamed on the city's Chinese residents, and became an occasion to physically quarantine the entire neighborhood. Serious proposals to expel the entire Chinese population were considered, and for about four decades afterward every Chinese person who came to the US was quarantined on Angel Island, in bleak and often unsanitary conditions.

Hell, even during the Black Death in the 1300s Europe was full of conspiracy theories blaming Jews for the plague, a meme that unfortunately persevered well into the 20th century, coming to a head in Hitler's Germany.

As usual, immigrant bashing is done by right-wing populists unwilling to admit that their ideology of subservience to wealth and power is actually what's behind the problem. In this case factory farms appear to have played a significant role in causing and spreading the epidemic. That's not a problem unique to Mexico - anyone who's read Eric Schlosser's Fast Food Nation knows that similar conditions exist right here in the good ol' US of A.

There are other aspects of this issue that suggest the assumed superiority of American over Mexican is utterly baseless. While waiting in the San José Airport this morning I caught a report on a Texas town's concerns over swine flu. One man who came down with the flu - and who quickly recovered - said "well I think we just have a better health care system here than they do down there."

As many who have studied American pandemic preparedness are all too aware, of course, this is bollocks - our health care system is in tatters and would be totally unable to handle a serious flu epidemic. There too, the wingnuts blame immigrants, but the truth is that the system fails the native-born just as often, and for the same reason - because profit has been emphasized over safety and health. God forbid we actually focus on that!

That conservatives would be so quick to repeat these sordid lies should surprise no one, but it should outrage everyone.

I'm here in Sacramento for the California Democratic Party convention, along with many other Courage Campaign staffers - and of course, many other Courage Campaign members. Over 8,500 of you signed your name in support of the resolution to hold Judge Jay Bybee accountable for his role in President Bush's horrific torture policies. That massive show of support helped solidify the case for the resolution here at the convention, where the Resolutions Committee approved the Bybee resolution last night.

There was a change made to the resolution - it calls for the House of Representatives to start a "Congressional investigation" of Bybee, and does not call for impeachment outright. This change was made by the resolution's sponsors, and many of its most ardent backers accept the change. A Congressional investigation is of course the first step toward impeachment, and though we'd prefer to see a clear statement for Bybee to be impeached, we also understand that the Congress has a process to respect. Besides, if the investigation stalls or impeachment charges are not eventually brought, you can be sure the Courage Campaign will be there to hold our members of Congress accountable.

David Dayen, a netroots activist from Santa Monica and one of the Courage Campaign's closest allies, wrote about the resolution at Calitics this morning:

The very, VERY good news is that the resolution to impeach Jay Bybee from the 9th Circuit Court of Appeals passed the Resolutions Committee with only small changes to the language. Any impeachment process must begin with a Congressional inquiry that gets remanded to the House Judiciary Committee. That's exactly the language we got, a resolution supporting a Congressional inquiry into Bybee and the other lawyers who justified torture. To everyone that signed petitions, you helped make this happen. We're not done yet, however. In order to get to the floor, the resolution must get ranked among the top ten at a "prioritizing" meeting today. Many more than ten resolutions passed in committee, so it will be a fight to get the Bybee resolution on the floor. I will be testifying in the committee today and lobbying for passage, armed with the thousands of signatures and personal testimonials gathered over the past week.

This could be as consequential as anything done in this convention, despite it happening off the floor and relatively outside of scrutiny. A resolution of support from the full CDP would be powerful.

The Courage Campaign will be there in the committee as well to demonstrate the demand from our members that this resolution be approved by the full convention.

Conservatives would have Californians believe that Prop 1A is in trouble with the voters because it would extend some temporary taxes for a couple more years. That may well be true for some voters. But it isn't the full story.

In order to get the February budget deal done, Democrats agreed to put a spending cap on the ballot. But they knew that progressives would never support a hard spending cap along the lines of what Arnold wanted in Prop 76. So staffers from the Legislature and the Governor's office got together to write what became Prop 1A - designed to accomplish all the effects of a spending cap, but with enough sleight-of-hand and possible loopholes to hopefully convince skeptical Democrats and progressives to back it.

And when that didn't seem to be enough, they linked it to Prop 1B, a $9 billion carrot to CTA to back the budget package, despite the very real possibility that Prop 1A (whose effects will last indefinitely, whereas Prop 1B will run out around 2014).

Grassroots progressives are beginning to see through this, as more and more organizations join the No on 1A coalition. George Skelton quotes several of them in his column today:

"We see 1A imposing a spending cap that assures that California schools remain among the most poorly funded in the country," says CFT political director Kenneth Burt.

And he adds, echoing what other public employee unions have complained about: "CTA went behind closed doors and cut a secret deal with the governor without talking to anybody."

Another opponent is the California Faculty Assn. Education already "is in a hole," says President Lillian Taiz. "Now they're dropping a manhole cover on us" with 1A. "This is madness."

The California School Boards Assn. also opposes 1A. Executive Director Scott P. Plotkin says a rainy day reserve would prevent schools from obtaining "adequate funding."

What about the $9.3 billion the props would provide to schools? "That's money we're entitled to anyway under Proposition 98," Plotkin says. Go to court and get it, he asserts.

Democratic supporters of Prop 1A, including legislators and their staff, have been working overtime trying to convince progressives, including yours truly, to support Prop 1A. Their argument has been that Prop 1A isn't like Prop 76 (and they are correct), and that with a Democratic governor and a large Democratic majority in the legislature, its effects will either be blunted or simply irrelevant.

But that is asking voters to take an enormous risk with the government services they need to prosper and even to survive. Prop 1A DOES create a kind of spending cap, let's be clear. It's not at all certain that we'll have a Democrat in the governor's office in 2011 (and even if we did they may not want to raise new revenues anyway). Prop 1A immediately gives the governor the authority to make mid-year cuts, meaning Arnold could slash UC and CSU spending during an academic year, or a Republican governor elected in 2010 could do deeper damage.

Further, we have no idea yet how the idiotic redistricting plan set up in Prop 11 will affect the composition of the legislature in 2013 and afterward. Although I don't see how California Republicans can make a significant comeback even with Prop 11's gerrymandering, they might well be able to reduce Democratic numbers so that a 2/3 vote is not within reach even by cutting further deals.

Skelton argues that the problem with Prop 1A is its complexity, which confuses and therefore turns off voters:

The lesson: When writing a ballot measure, keep it simple. Make sure it can be easily grasped by voters.

Fast forward 36 years. The core measure on the May 19 special election ballot, Proposition 1A, suffers from a similar affliction: lack of simplicity. That's because it has been burdened with so much Byzantine baggage that there's no consensus interpretation of what the measure is all about....

But the product was not a prime-time package ready for the voters. The trade-offs that click inside a legislative chamber aren't always easy to explain outside the Capitol. Voters tend to become confused or enraged.

And that may well explain how some voters approach the issue. But for many others, the concept of a spending cap that nobody really understands, and that progressives and Democrats are supposed to support on the faith that Democratic legislators will always be there in sufficient numbers to ensure this doesn't destroy government, is just not something we can swallow.

Especially when you consider that the California Budget Project estimates that Prop 1A will lead to immediate budget shortfalls between at least now and 2012-13 (and could be as high as $21 billion that year), there really seems to be no case whatsoever for Prop 1A. Voting no on this one is an easy move for progressives to make.

Ultimately I have to wonder about the political wisdom of Democratic legislators campaigning on a "Yes on everything" platform. Schools will get their money, either via Prop 1B or via the courts. The only propositions that might affect the size of the existing deficit are Props 1C-1E, and though they have their considerable problems as well, they might fare better if they were decoupled from Prop 1A.

But that's now what the leadership has chosen to do, and as a result, it seems likely the entire package will be shot down by voters. That wouldn't be because of voter ignorance or confusion, either. It'd be because voters understand a bad idea when they see it.

There's been a lot of discussion about the May 19 special election among the activists and organizations of progressive California. Now it's time to bring that to you. The Courage Campaign is going to host a Courage Campaign Conversation Thursday evening at 5pm to discuss the initiatives, why they're not likely to solve the core problems our state faces, and what some long-term structural reforms and budget solutions might look like.

Joining us on the call is Jean Ross of the California Budget Project, Anthony Wright of Health Access California, and Dennis Smith of the California Federation of Teachers.

The Courage Campaign believes that the special election will be a turning point for California. Either we will start down the path of progressive change, overcoming our economic crisis and solving our state's ongoing budget crisis -- or we will give in to Republican extortion and approve conservative limits on our collective ability to provide public services.

You can RSVP to the call here. Over the flip is the email we sent to our members about the call.   Read More »

I am the Public Policy Director for the Courage Campaign

When I read the torture memos that President Obama released, I was shocked, but I can't say I was too surprised. Nevertheless, the details are horrifying. Waterboarding a detainee 83 times in a month, cramped confinement, putting "stinging insects" into a box with a detainee, and "walling" - throwing someone's head into a wall - these are the things that Jay Bybee's August 2002 memo approved. In 2003, Bybee was nominated and confirmed to a seat on the all-important 9th Circuit Federal Court of Appeals in San Francisco.

Since the release of that memo a broad movement has emerged demanding the impeachment of Judge Bybee. Our own David Dayen has taken the lead in organizing the netroots behind this effort, creating an online petition to gather support behind the impeachment resolution passed by the LA County Democratic Party that will be taken up at this weekend's California Democratic Party convention.

Last Friday David Dayen asked the Courage Campaign to join the grassroots effort to impeach Jay Bybee by helping pass this resolution. And we were happy to participate. Today we emailed our members asking them to sign up as supporters of the CDP impeach Bybee resolution.

The email we sent references the powerful NYT editorial calling for Bybee's impeachment. Since then Congressman Jerry Nadler, who chairs the House Subcomittee on Constitution, Civil Rights and Civil Liberties and is a ranking Dem on the House Judiciary Committee, has announced his support of the impeachment of Jay Bybee:

"He ought to be impeached," Nadler said in an interview with the Huffington Post. "It was not an honest legal memo. It was an instruction manual on how to break the law."...

"Any special prosecutor on torture would have to look at the authors of those torture memos," said Nadler. "And certainly you have real grounds to impeach him once the special prosecutor took a good look at that. I think there ought to be an impeachment inquiry looked at in any event. Which should happen first, I'm not sure."...

"[Bybee] should be a target. Yoo should be a target. There are a number of targets," said Nadler, referring to for Bush administration counsel John Yoo, who also authorized torture and is now a professor at the University of California, Berkeley. Bybee, noted Nadler, "is the only one who's a federal court judge now."

The momentum is building. Please add to it and help push the House to launch an impeachment effort by signing your name to the CDP resolution.

Over the flip is the email we sent to our members.   Read More »