Thread: Schwarzenegger Signs Budget With More Welfare Cuts

Schwarzenegger Signs Budget With More Welfare Cuts

Tuesday, July 28, 2009 2:54 PM

SACRAMENTO, Calif. -- Gov. Arnold Schwarzenegger is making another $656 million in cuts to build a reserve fund for California as he signs the state's new budget.

Schwarzenegger cut spending on child welfare, health care for the poor and AIDS prevention Tuesday. He signed a package of bills aimed at balancing the state's $85 billion budget through June 30, 2010.

Schwarzenegger says the plan forces California to live within its means, but it makes severe cuts to government programs from schools to prisons.

The governor and lawmakers came up with a revised spending plan last week to close a $26 billion deficit. They hope it will allow the state to stop issuing IOUs.

The governor wanted a cash cushion after the Assembly rejected about $1.1 billion in revenues from local transportation funding and new oil drilling.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.

SACRAMENTO, California (AP) _ Gov. Arnold Schwarzenegger on Tuesday is expected to use his line-item veto power to make additional cuts to California's latest spending plan _ a move advocates fear could further hurt the poor.

Social service advocates worry the Republican governor has little choice but to go after money counties receive to administer welfare and social service benefits as he seeks to restore a reserve fund for the state. Likely targets include welfare-to-work assistance, in-home support, foster care and health insurance for poor families.

With much of state spending tied up by federal and constitutional requirements, the Schwarzenegger administration wants to ensure the state has a cash cushion in case of emergencies such as earthquakes and wildfires.

"I just want to assure everyone that we will build up our reserve. We will make the necessary cuts," the governor said Friday in announcing he would sign the budget passed by the Legislature.

The governor and lawmakers had planned for a $918 million reserve in the revised budget, but the Assembly rejected two measures _ raiding local transportation funds and authorizing additional oil drilling _ that would have brought $1.1 billion to the state.

The Austrian-born governor's spokesman, Aaron McLear, said Schwarzenegger will restore a reserve fund but isn't expected to cut a full $1.1 billion in spending. He declined to release details.

"We will always be in a position to aggressively respond to disasters," McLear said.

Advocates view additional cuts to social programs as another blow since the Schwarzenegger administration has reduced benefits in response to the recession.

California's economy has been hit by the housing market slump and high unemployment, and the latest efforts to close a $26 billion shortfall come just five months after lawmakers and the governor ended months of negotiations to close a previous $42 billion deficit.

Under the budget the governor will sign Tuesday, the state will impose tougher sanctions on aid recipients who don't meet work requirements. And in-home support workers will have to undergo background checks and have their fingerprints taken.

In earlier rounds of cuts, California lowered reimbursement rates for health care providers and eliminated optional benefits such as dental and eye care for adult recipients.

"Why further punish children, low-income families, and the aged and disabled because the Legislature did not approve borrowing gas tax revenue?" said Frank Mecca, executive director of the County Welfare Directors Association of California.

Once Schwarzenegger signs the budget, his finance team is expected to begin briefing the state treasurer and controller, creditors and analysts on how the latest spending plan will affect day-to-day cash flow.

The governor and lawmakers are hoping their latest plan provides the assurance lenders need for the state to take out loans and stop issuing notes to thousands of vendors. Representatives for the treasurer and controller said it would take a few more days to assess the state's borrowing needs and decide whether California can stop issuing notes.

Matt Fabian, a bond analyst at Municipal Market Advisors, based in Concord, Massachusetts, said the plan was filled with accounting tricks and will likely do little to improve the state's poor credit rating.

Fitch Ratings placed at California's general obligation bond debt at "BBB," which is still investment-grade. Most states have a higher-quality "AAA" or "AA" rating.

http://www.newsmax.com/us/us_california ... 40973.html

California's economy has been hit by the housing market slump and high unemployment

and millions of illegals that take advantage of every opportunity to get free education, free health care, welfare cash, etc. etc.

It sounds like legal American seniors will be hardest hit.

If Arnold continues to force the legal citizens to pay for illegals, Ca will die.

The citizens and legals shoiuld be mobilizing against the illegal aliens there is only so much government money.

Good point Richard.

http://www.alipac.us/ftopict-164833.html

Duplicate, please post at link above

thank you