Buy Now, Pay Later

Gov. Schwarzenegger has a lot more in common with Bush and the Republicans in Congress than most realize. They both have the same approach to finances: cut taxes, keep spending. Or as Dan Walters describes it today: "all gain, no pain."

His first act as governor was to reinstate a popular, multibillion-dollar reduction in taxes on cars, even though the state was already running huge budget deficits. A few months later, he backtracked even more by unilaterally rescinding billions of dollars in spending cuts that he had initially proposed, while refinancing the state's short-term debt with long-term bonds.

Schwarzenegger evidently has no real intention of bringing the state's income and outgo into balance with either spending reductions or new taxes and is content to let the immense deficits mount for the rest of his governorship -- while continuing to talk a good game about fiscal responsibility.

Rather, he's allowed spending to soar and floated new schemes for spending money -- borrowed money -- on highways, reservoirs, prisons and other infrastructure, pushing the eventual costs onto a budget that already has a huge structural deficit and on future governors, voters and taxpayers, while continuing to boast about not raising taxes. He rejected new gas taxes or other revenues from motorists for transportation and sidestepped water charges to pay for the reservoirs he wants to build.

I would not exactly say that spending has soared, more that he has reduced revenue streams and refused to find a way to make that up. Plus, he has relied very heavily on borrowing. That leaves us with a basic math question: what happens when you spend more than you take in? And how do you exactly find ways to pay for new programs when you are unwilling to raise taxes? Arnold's answers are usually borrow and find gimmicks like selling off the lottery.

So, while the Democrats in Congress have insisted on a pay-as-you-go plan for the national budget, California continues to teeter on the edge of financial ruin. We continue to be on an unsustainable path with a structural deficit and grand plans for new programs. Arnold had promised to come in and do the hard work, but he is much more interested in headlines than securing California's finances. It just is not sexy enough for him and requires too much detail.

He is leaving the mess for others to clean up.