Monday, 12/01/2008 Print Version |

Governor Calls New Legislature Into a Prop 58 Special Session

GOVERNOR SCHWARZENEGGER: Good afternoon. Well, we'll talk a little bit about our special session. A little less than four weeks ago I called a special session of the legislature and proposed ways to do four things:

Close our immediate $4.2 billion revenue shortfall,
Stimulate our economy and create jobs,
Keep people from losing their homes to foreclosure,
And fix our almost insolvent unemployment insurance fund.

Unfortunately for California, the legislators did not seem to appreciate the severity of our crisis. In floor debates, with more finger pointing than a sense of urgency, they adjourned without solving a single one of any of those issues.

Now, more than three dozen new legislators are being sworn in today, as you know, and I wasted no time in calling a fiscal emergency special session today. Under Proposition 58, the legislature now has 45 days to send me bills addressing this crisis. If the 45 days pass and they still haven't addressed the problem, they cannot adjourn or consider anything else until they do. And I'm urging the people of California to call their legislators, to send them emails, send them postcards and put the pressure on them, to let them know not to waste any more time.

Without immediate action our state is headed for a fiscal disaster where everyone will be hurt. Over the next 18 months, our preliminary estimate shows that the budget deficit will reach a staggering 28 billion dollars and with the national economy still in decline, I know it will only get worse.

I have proposed a balanced combination of spending reductions and revenue increases to begin closing that gap. I have made tough choices that I wish I wouldn't have to make. And I know this is a terrible time to raise taxes but it is also a terrible time to make cuts in very important programs. In an emergency like this we have to take quick action to avoid even worse problems, even if they include decisions we don't like.

Now, I compare the situation that we are in right now to finding an accident victim on the side of the road that is bleeding to death. We wouldn't spend hours debating over which ambulance we should use, or which hospital we would use, or which treatment the patient needs. No, we would first stop the bleeding and that's exactly the same thing we have to do here.

If we adopt the strong economic stimulus measure that I have proposed -- which is the most important ingredient in this whole package -- we can offset a lot of the pain that comes with spending reductions and new taxes. But we must act fast. Right now we are on a track to run out of cash by the end of February or beginning of March, which means that we will not be able to make our payments anymore.

In his first inaugural address, President Franklin Roosevelt said America would rebuild its economy only if the people pulled together as a trained and loyal army willing to sacrifice for the good of a common discipline. We need that same spirit again right now in America and also in California. And I know that we have it; as a matter of fact, I have seen it time and time again. As a matter of fact, during all the wildfires this year, last year, the year before and so on, where people rolled up their sleeves and pitched in for the greater good, where no one complained about their own misfortunes, because we were all in this together, where volunteers stepped up to become part of the solution.

It's time for the politicians to show the same kind of valor and courage our firefighters display when they go out there and they risk their lives in order to save ours. I want people to let the legislators know that they were sent to Sacramento to step up, compromise, get off their rigid ideologies and to solve the problems.

California and America have gone through tough times before and we always come back. This is one thing that is always certain; we always pull through it. And we can do it again but only if we attack the problems head on, make the difficult choices and work together for the common good.

Thank you. If you have any questions about this, please feel free.

QUESTION/ANSWER:

GOVERNOR:           Yes?

QUESTION:              Governor, what are you going to do differently to secure Republican votes this time?

GOVERNOR:           Well, I will do what I always do. I have my Big Five Meetings and I talk to the individual legislators and try to convince them that they should leave their ideology outside my office door and come in with only one thing in mind and that is to do that best in order to serve the state and to help the people of this state. And the only way that we can pull through this, because we have a $11.2 billion budget deficit, is with a combination of spending cuts and also revenue increases. And we know that Democrats don't like to make cuts in some of the programs and we also know that Republicans don't like to raise taxes. So we know all that but we still have to solve the problem and we still have that hole. So therefore, everyone has to kind of go beyond their ideology in order to solve those problems and I think that's what the people send the legislators to Sacramento to do.

QUESTION:              So what will you do differently in terms of that?

GOVERNOR:           Make all the effort that I can, cover them in every way that I can. I even proposed to them that they should pass a law to give me all the power for one hour, I'd make all the decisions so that they don't have to be blamed for anything. There were not willing to do that either.

QUESTION:              What exactly is a "fiscal emergency?" Is that a legal term, is that a Constitutional term?

GOVERNOR:           A fiscal emergency basically -- under Proposition 58 we have a law now that is in place that if we see that money is running out and we can't make the payments, that we can call, that the governor can call a fiscal emergency, a special session, so that the legislators go in and have 45 days in order to act on that.

QUESTION:              Is this different from the last special session?

GOVERNOR:           It's different because the last one was a special session where we combined everything. Today it's declaring a fiscal emergency and also a special session, it's both and I will be signing the papers right here in a few minutes.

QUESTION:              Do you think that everybody is kind of up to speed, the new legislators that are going to come in and, you know, be ready to do this?

GOVERNOR:           Well, as you know, there are really no new legislators. It's like playing musical chairs. I mean, the people move from the Assembly to the Senate and people move from the Senate to the Assembly. So they all moved around, or wives of ex-legislators going in there. So I don't think there are -- there may be a very few that are really new and that have never been in the Capitol in that position but I think most of them all have been there in some capacity. So I think that they are very well skilled, they know what to do.

The question always is, is the will there to make them do what they need to do? And I think that redistricting was one of the issues that we have addressed because people get punished, the way the system works right now, for trying to compromise and solve problems and they get rewarded for getting stuck in their ideological sandboxes.

Yes?

QUESTION:              I guess it's a two-parter. What happens if California runs out of cash? You mentioned February, March, very soon. Secondly, you're going to meet with President-elect Obama tomorrow in Philadelphia. Will you ask him for an economic stimulus for California and do you think you're going to get it?

GOVERNOR:           Well, first of all, let me just say that because we are now a month late, it's important to know that now we are anywhere between $1.5 billion to $2 billion deeper in the hole, because if we can get revenues earlier then we can go and fill that hole but now we have to make more cuts and raise more revenues because of that. So the legislators, I think, need to know that, because many times they disregard that fact. So every day now that we are delaying, it will mean more and more of a problem.

Number two, when we run out of cash, that means we cannot make the payments, which will have a tremendously horrible effect on our school system. I think always first of our children. I think that our children should not become a victim of all of this and so we should do everything that we can to always have enough money for our kids and for giving them health care and giving them education and those kinds of things. And then we cannot make other payments either.

I think the longer we wait the more we will have to lay off people from government. And I think because of the delay now, we are almost, I think, forced -- as a matter of fact, we are going to have a meeting as soon as I come back from Philadelphia about that, how many people we need now to lay off in order to make ends meet. So it gets worse very quickly. It's like an avalanche, that it gains momentum. And that's what we're in right now, so it's a real crisis.

Now, when it comes to going to Philadelphia, as you know, President-elect Obama is a big believer in infrastructure and in rebuilding America. And I have been, ever since I became governor, a big believer in rebuilding California and also rebuilding America but my concentration was on California. So we were very fortunate, as being one of the only states that really have made the commitment for $42 billion of infrastructure bonds, so we have a lot of experience in that regard. But, as I always have said, that was only a foot in the door, that what we really need is $500 billion of infrastructure over the next 20 years.

And we have right now $26 billion of infrastructure projects ready to go, so that when he becomes president we literally can go and take federal money and go to work and start working on those $26 billion worth of projects. So this is why I'm going back there, to talk about the projects we have ready to go -- no waiting, no delays or anything -- we can put shovel into the ground literally the day after he becomes president, that's how ready we are. So we want to talk about that, because if we do that and if we get federal money to build this infrastructure, that will put tens of thousands of people to work.

And this is what my economic stimulus package is all about also, that I'm proposing here in the special session, is to put money out there, get people to work, to get rid of some of these tough regulations that were enforced a few years ago before my administration, that makes it hard for businesses to do business in California. So those are all the things that we are trying to do. To get people to work is the most important thing, because that will stimulate the economy.

And so that's why I'm going back there, to be part of this conference with more than 40 governors and to talk to the President-elect and also to the Vice President-elect and to the whole team. And I'm also going to be together with Ed Rendell, with the governor who -- and Michael Bloomberg -- we have formed a partnership a year ago where we talk a lot about infrastructure in America and to start stepping it up.

QUESTION:              That's a separate issue, though, in a sense, is it not?

GOVERNOR:           Yes, it's a separate issue but it is, I think, in a way the same issue, because it all deals with how do we reenergize our economy and how do we put people to work, because that will create revenues again, people pay taxes and so on. That was something that was very successful during -- as you know, Franklin Roosevelt, who used that opportunity. He saw the big crisis and he used that opportunity to start building America and now, today, we are still enjoying a lot of this, if it's the roads, if it is the buildings -- he built, I think, 125,000 buildings, 75,000 bridges, 650 million miles -- thousand miles, I should say. So it's extraordinary stuff that he has done and he got the economy going again.

And I think that's what they should do now on the national level and that's what we should do on the state level, by ourselves and also together as a joint effort with the federal government. And one of the things that I will be proposing back there also is to do everything we can to have public-private partnerships, because the public side, the people, cannot shoulder the whole burden of all of this. I think the public and private sectors together can do that.

And then to also answer your question about the suggestions that we should just, with this crisis, go back to Washington and ask for federal help, I would never ask the federal government to help us before we have straightened out our own mess. We've got to go and look at our numbers and say we are right now not fiscally responsible. We are right now spending money we don't have. And so, therefore, the federal government shouldn't give us a penny until we straighten out our mess and we can live within our means. Then they can go to the federal government and say okay, can you help us now with areas like infrastructure, health care and those kind of issues? So that's basically the plan.

Thank you very much and have a good day. Thank you. And now let me just sign.

QUESTION:              Down in front, down in front, we're watching the signing. What are these that you're signing?

GOVERNOR:           Executive orders for the fiscal emergency session and special session.