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Capitol Weekly
By Anthony York
August 30, 2007
As wide gulfs remain inside the Capitol between Democrats and Republicans over how to fund an expansion in health-care coverage in California, some old rivals in the health-care wars are moving closer together, just in case the health-care fight spills over to the ballot box.
These disparate groups began holding conversations in late 2006, before any of the three major health-care plans from Capitol leaders were unveiled. Late last year, as Gov. Schwarzenegger's chief of staff, Susan Kennedy, was holding meetings with various health-care experts, some old foes over SB 2 quietly opened their own dialogue. In 2004, the California Restaurant Association led the successful effort to repeal SB 2, which would have required employers to provide health insurance to their employees. On the other side of that multimillion-dollar battle was the California Medical Association and organized labor.
Labor and the CMA are both heavily engaged in the ongoing Capitol negotiations, while business groups have rejected both the Democrats' and the governor's proposal as untenable. But the restaurants' proposal may serve as a starting point for negotiations for a possible November 2008 ballot initiative, just in case a deal cannot be hammered out this year.
"We are not ready to give up on current legislative proposals, but are interested in hearing what CRA has to say," said CMA's top lobbyist, Dustin Corcoran. "As a longtime proponent of universal health care, CMA welcomes any serious effort to reform health care and looks forward to further discussions."
But Jot Condie, president of the California Restaurant Association, said his members are "moving forward as if the Legislature has already concluded its business." Condie said, "It appears the Legislature is incapable of producing needed reform, so we decided to look to the initiative process."
The CMA began talking to the restaurant's association last year, as various groups tried to find common ground and a way to fund expanded health-care coverage for California residents. At various points, those discussions also included representatives from Blue Shield, Kaiser and the California Hospital Association.
The California Restaurant Association was among the first groups to come out against the governor's proposal, sponsoring a press event with the Assembly Republican Caucus at a downtown Sacramento restaurant in January.
The CRA is also opposed to AB 8, the health-care proposal by Speaker Fabian Núñez and Senate President Pro Tem Don Perata. But earlier this week, CRA announced a plan calling for a new 1 cent sales tax to help cover the cost of health care. Condie said his group is open to other funding mechanisms in addition to a sales-tax increase. When asked whether his board would consider a payroll tax, as is called for in both the governor's plan and AB 8, Condie said he suspects his board would not support it.
"A payroll tax as proposed in AB 8 will not provide sufficient revenue to finance a new health-care program and will be challenged in court," the statement read. "We need to avoid those setbacks and create a sustainable program that will help, not hurt."
Other business groups followed the CRA's lead. The California Small Business Association announced its support for the plan this week. And a lobbyist for the state Chamber of Commerce, Dominic DiMare, said the sales tax proposal was "intriguing."
Meanwhile, Republicans in the Legislature remain adamantly opposed to a sales-tax increase. "I wouldn't support that," said Assembly Republican Leader Mike Villines, when asked about the proposal.
Condie said Assembly Republicans have been "less than pleased at this unusual position we've taken," noting that his board's vote last week represents a "century-long position against increasing tax burdens for Californians."
While the week has brought a flurry of press conferences, political rallies, Big Five meetings and private phone calls all dealing with the health care issue, it remains unclear what progress, if any, has been made on brokering a legislative compromise.
This was illustrated in a Capitol press conference Wednesday held by California Children Now, a group dedicated to providing health coverage to all of the state's children. At the press conference, advocates all expressed support for a more comprehensive health-care solution. But with Perata and Núñez in attendance, speakers also said that if the Legislature cannot agree on a wide-reaching plan, the state should at least take steps to ensure health coverage for children.
"Covering kids is the first and best starting point for all of us," said Núñez, who reiterated his optimism that a more far-reaching health-care deal can be reached this year. But just in case, Sen. Darrell Steinberg, D-Sacramento, and Assemblyman John Laird, D-Santa Cruz, have bills ready--SB 32 and AB 1 respectively--that would provide health care only to California children.
"Our first priority must be children," said Steinberg.
Minutes later, on the same stage, Gov. Schwarzenegger said the health-care issue was all or nothing. "We're not going to go and do just one thing," said Schwarzenegger. "It takes the same amount of energy as it does to do the whole thing."
Whether this is just a bargaining position or a possible veto threat remains unclear. Perata and Núñez have said repeatedly that they intend on sending AB 8 to the governor in some form. Schwarzenegger has said he would veto the measure in its current form, but that has done little to deter Democratic leaders, who concede the bill will likely go through more rounds of amendments before landing on the governor's desk. Núñez said he will introduce the governor's plan into legislation and bring it up for a vote on the Assembly floor Thursday.
Núñez said Thursday's vote will illustrate that key tenets of the governor's plan--including a 4 percent fee on hospitals and a 2 percent tax on doctors--have no support in the Legislature.
When asked about Núñez's proposed legislative drill, a mildly irked Schwarzenegger said, "I'm sure the speaker has a plan. I'm not going to second-guess him."
Meanwhile, Núñez rejected the concept of a sales tax to pay for health care. He called the CRA announcement a "noble gesture," but dismissed the sales tax as "regressive," said the proposal was "a way to pass the buck" for employers not to provide health care to their workers.
But for all their differences, advocates remained optimistic that something could be worked out--at least between the governor and Democratic leaders. "AB 8 and the governor's plan are a lot more similar than they are different," said Anthony Wright, executive director for the consumer advocacy group Health Access California. "If you do the bullet points of the major elements and concepts of the plans, many of them are similar if not the same."
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