On the July 21 edition of NBC's Nightly News, correspondent Miguel Almaguer stated that the proposed California state budget deal is “a compromise, what some characterize as shared pain and sacrifice.” Almaguer went on to note that the proposed deal includes “cuts across the board: $1.3 billion from health care; more than half a billion from welfare; another 1.2 billion from corrections, which could allow inmates out early” and that "[t]he biggest cuts come from education, affecting students from college to kindergarten." But Almaguer did not offer any examples of “pain” the wealthy might “share” with other Californians, nor note that the deal will not raise their taxes. Indeed, due to an ultimatum from Gov. Arnold Schwarzenegger (R) and state Republicans, the deal includes no tax increases whatsoever.

During a June 18 speech, Schwarzenegger said of a series of referenda intended to close the budget gap which voters opposed in May:

As a matter of fact, the people overwhelmingly voted against those initiatives. And I think that they wanted to send to Sacramento a very clear message and the message was very simple; don't come to us with those complex issues, do the job yourself, live within your means, get rid of the waste and inefficiencies and don't raise our taxes.

He also stated:

This week the legislators came forward with their own proposal. Their budget still has too many of the gimmicks in there and I told them that yesterday at the meetings -- I met with the Democratic leaders yesterday and with the Republican leaders two days ago -- and I let them know that this has too many gimmicks still in there, one-time solutions and pushing the problem off into the future and actually pushing the problem off to the next legislature or to the next governor, which is something we don't want to do.

And rather than turning inward and looking at government very carefully, of what can we do to save money and to provide those programs more efficiently, they looked outward. They looked at all of you and said, “Let's raise the taxes again.” So even though just recently, just four months ago, we had the biggest tax increase in the history of California of $12 billion, now they want to come back to you again and raise your taxes once again.

And so I said to them, I said, “I will not sign a budget that has tax increases in that budget.” (Applause) I find it somewhat outrageous to go and to ask the people for a tax increase but at the same time to refuse a proposal that I put forward, which is to cut the state employees' pay by 5 percent. They refused that and rejected that and voted it down. But to go to you then and ask you for more money, it doesn't make any sense to me.

After reaching the tentative agreement with Senate and Assembly leaders on July 21, Schwarzenegger reportedly stated, “This is a budget that has no tax increases and this is a budget that is cutting spending and it deals with the entire $26 billion deficit.”

In a July 22 editorial supporting the deal because it is “not nearly the nightmare that would have resulted from continued gridlock,” the San Francisco Chronicle wrote that "[t]he refusal of the governor and Republican legislators to consider new taxes all but guaranteed that the solution would require a combination of excruciating cuts, buck passing and a dash of accounting gimmickry." The Chronicle also stated of the Republicans who “remain united against any new taxes”: “It seems that many of them would sooner see their children in second-rate schools and their cars on Third World roads before they would break their anti-tax pledges and put themselves at the mercy of the right-wing talk radio blowhards.” From the editorial:

Gov. Arnold Schwarzenegger and California's legislative leaders achieved the most difficult job imaginable -- bridging a $26.3 billion shortfall -- in the most tortuous way possible. The refusal of the governor and Republican legislators to consider new taxes all but guaranteed that the solution would require a combination of excruciating cuts, buck passing and a dash of accounting gimmickry. And the deal announced Monday night contained all three.

But before we get into the ugly details, let us pause a moment to praise the governor and top legislators for finally mustering the mettle to perform this grim duty before the Golden State plummeted into insolvency. As awful as this deal might be for Californians who work for the state or depend on its help in finding a job, going to college or getting basic health care ... this is not nearly the nightmare that would have resulted from continued gridlock. California has reached the point of issuing IOUs and watching its nation's-worst credit rating sink to near junk-bond status.

Without this deal -- which still must pass both houses of the Legislature -- the state will keep sliding toward insolvency, with each day adding $25 million to the gap between spending and revenue.

So for all the interest groups that want to pick apart this compromise in the name of saving your favorite program, we ask: Where is your solution that would survive the current political reality of Sacramento? The Republicans remain united against any new taxes -- and it would take at least a few of their votes to reach the required two-thirds threshold. It seems that many of them would sooner see their children in second-rate schools and their cars on Third World roads before they would break their anti-tax pledges and put themselves at the mercy of the right-wing talk radio blowhards.

It's a sad commentary on the state of governance in California, but it is a reality the Capitol's voices of responsibility must confront.

From the July 21 edition of NBC's Nightly News with Brian Williams:

BRIAN WILLIAMS (host): California is our biggest state in terms of population, and it long ago ran out of money. They've got nothing to pay the vendors they owe, and now they have struck a deal for more cuts, and these are going to hurt.

They're going to allow offshore drilling for the money it will bring in. The LA Times reports tens of thousands of seniors and children would lose access to health care, prisoners will spend less time in prison, and the governor is going to sell cars, and furniture, and office supplies, and autograph some of it, he says, to raise more money. It's an unbelievable turn of events. Miguel Almaguer is live for us in Los Angeles tonight to start us off.

Miguel, good evening.

ALMAGUER: Good evening, Brian. On Thursday, state legislators are expected to officially pass the budget. It is a compromise, what some characterize as shared pain and sacrifice.

[begin video clip]

ALMAGUER: A done deal -- that's what California's top legislators say about the state budget.

SCHWARZENEGGER: It was like a suspense movie.

ALMAGUER: It played out more like a long drama, complete with midnight negotiations and an ending long overdue.

SCHWARZENEGGER: This is an emergency. We are in a fiscal crisis, we are in an economic crisis, and we did things that needed to be done.

ALMAGUER: Facing a $26 billion budget deficit, California was so broke it began issuing IOUs. There was also worries the state would go insolvent.

SHERRY BEBITCH JEFFE (political analyst): Because if California had gone insolvent, there would have been no money to pay for services, to pay vendors.

ALMAGUER: The plan to pull California out of the red includes cuts across the board: $1.3 billion from health care; more than half a billion from welfare; another 1.2 billion from corrections, which could allow inmates out early.

PROTESTERS: Shame on you! Shame on you!

ALMAGUER: The biggest cuts come from education, affecting students from college to kindergarten. And it's not just the young, but also the old. San Diego's Hope Adult Day Care center will eliminate meals and health care service two days per week.

JESSICA CANONIZADO (Hope Adult Day Care employee): If, you know, we lose those two days and they do end up in a hospital or institution, it could cost the state well over $500 a day per patient.

ALMAGUER: Counties and cities aren't happy, either. San Diego balanced its budget, but the state money it was counting on won't be coming.

JERRY SANDERS (Republican mayor of San Diego): That's very real in terms of police officers in the street, firefighters on the rigs, potholes in the roads.

ALMAGUER: And to generate cash, the expansion of oil drilling near Santa Barbara, a move not seen off the Golden State's scenic coast in 40 years.

[end video clip]

ALMAGUER: And, Brian, while the state may have a budget deal, some local cities and counties say they may sue California to get their earmarked money back.

WILLIAMS: Miguel Almaguer in Los Angeles starting us off tonight. Miguel, thanks.