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Entering His Second Term, Schwarzenegger Will Face Tough Issues
By Laura Kurtzman, Associated Press Writer - January 8, 2007

SACRAMENTO (AP) _ Gov. Arnold Schwarzenegger is beginning his new term determined to spend the political capital he earned with his decisive re-election.

But the issues he has chosen to address--health care and prisons--are so intractable he may go through his earnings quickly.

Last year's productive legislative session drove up Schwarzenegger's popularity, as he signed Democratic bills to lower the price of prescription drugs, raise the minimum wage and cut the greenhouse gas emissions that lead to global warming.

But those issues were nothing compared to the complex and chronic questions he will face this year. Instead of two sides, they seem to have 50.

And while the global warming deal allowed Schwarzenegger to claim the mantle of being first, people have been trying to fix prisons and control the cost of health care for years.

California's prisons have become so overcrowded the federal courts are threatening to take them over, potentially forcing the state to spend billions of dollars. Democrats want shorter sentences for lesser offenders, a politically perilous idea. Schwarzenegger has formed a commission to study it.

Health care is even more difficult. It affects nearly everyone in the state, and any serious effort to control costs or expand coverage means confronting a welter of powerful interest groups: doctors, hospitals, insurers, unions and businesses.

But the governor, who will lay out his health reform ideas on Monday, likes big ideas. And he has been promising big things on health care, such as covering all the state's 6.5 million uninsured people. What he does not say is that doing it will require a great deal of money, which the state does not have.

Whatever solution Schwarzenegger hits on, if it is palatable to the Democrat-controlled Legislature, it is likely to prove even more provocative to the Republican minority than what the governor did last year.

The same goes for the governor's business allies.

The soaring cost of health insurance is closer to their bottom lines. And firms that cannot afford to insure their employees are likely to put up a much bigger fight against doing it than they did over the still unknown costs of reducing greenhouse gas emissions.

Three years ago, a business coalition led by retailers and the restaurant industry overturned a union-backed law to require employers to offer health insurance or pay into a state pool.

Schwarzenegger helped them to do it. But they won by less than a percentage point, and both Democratic legislative leaders are bringing the idea back in slightly different forms.

Schwarzenegger, too, seems to have taken a sudden liking to the idea, despite bashing his rival in the governor's race, Democrat Phil Angelides, for taxing businesses to provide health care.

Kim Belshe, Schwarzenegger's secretary for health and human services, speaks vaguely about "shared responsibility," which people in the capital take to mean some sort of business mandate, along with a requirement that individuals carry health insurance.

But that will anger the unions, who already have proved adept at defeating the governor's ideas and driving down his approval ratings.

Republican legislators, who have grown more outspoken since Schwarzenegger's re-election, flatly reject the idea that businesses be forced to offer health insurance.

"When he talks mandates, that's a line in the sand," said Assembly Republican leader Mike Villines, R-Clovis.

But it may be the only way for Schwarzenegger to muster a health reform measure that does not require significant contributions from the public treasury, which is still strained. This year, the state faces a structural budget deficit of $5.5 billion.

As long as his proposal does not cost the state money or raise taxes, it can pass on a majority vote. He can get that from Democrats, who already are characterizing 2007 as another year in which their ideas will prevail.

They revel in noting that the governor's biggest headaches are likely to come from his own party.

"The Democrats are not going to be an obstacle to some of the things the governor wants to get done, because we share a lot of his concerns," said Assembly Speaker Fabian Nunez, D-Los Angeles. "His real problem is going to be the Republicans."

 
 

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