COVERITLIVE.COM

10:08

John Marelius - We knew it was bad. Treasury Secretary Timothy Geithner tells Congress the Obama administration has inherited "the worst fiscal situation in American history." Republicans say Obama's plans will make it worse. And what's year without an election in California. Get ready to vote in barely two months. So on to your questions and comments.

10:09

SignOnLiveChatModerator - John, "the worst fiscal situation in American history"? How much of this is hyperbole and how much is based in reality?

10:10

John Marelius - Well, I have no personal recollection of the Great Depression, but I don't imagine soup lines were a whole lot of fun. There's no question the current situation is bad. But I think the Obama camp is systematically trying to lower expectations so that any signs of improvement will make him look good.

10:12

SignOnLiveChatModerator -

John, Obama has been promising a lot since his inauguration, including creating or saving millions of jobs and keeping millions in their homes. Can he deliver on these promises, and if not, what risk does he run come 2010 and especially in 2012?

10:15

John Marelius - There's a point where the Bush recession becomes the Obama recession. Nobody knows where that point is, but Obama desparately wants to avoid that. Historically, a new president's party loses seats in Congress in the next election. He can probably only avoid that if people perceive the economy to be improving by 2010. By 2012, if Americans perceive that a recovery is under way, Obama should be in good shape for re-election, unless there's some foreign policy crisis.

10:17

SignOnLiveChatModerator - President Obama has been promising to reach across the aisle and build bipartisan support for his initiatives. How successful has he been?

10:17

SignOnLiveChatModerator - (John wrote a story on this topic last week. To read the story, visit http://www3.signonsandiego.com/stories/2009/feb/22/1n22bipart00123-bipartisan-path-rough-governor-pre/ )

10:19

John Marelius - He probably gets points for trying, but he has little to show for his efforts at bipartisanship. He only got three Republican votes in the Senate for his stimulus package -- probably the three most liberal Republicans in the Senate -- and no Republican votes in the House. Democrats and Republicans have such different ideas about what should be done and how it should be done and represent such different constituencies, that there's a limit to how much bipartisanship is possible. Still, I think Obama gets a certain amount of credit for making overtures to Republicans, even if he doesn't get much in the way of results.

10:22

SignOnLiveChatModerator - John, let's turn to the state budget. How successful was Gov. Arnold Schwarzenegger in his attempts to come to a bipartisan solution to the budget crisis?

10:23

John Marelius - He was about as successful as Obama has been. In fact, the dynamics were almost identical. Schwarzenegger got all of the Democrats to vote for his budget and only three Republicans in each house of the Legislature -- the bare minimum to get to the required two-thirds vote to pass a budget.

10:25

SignOnLiveChatModerator - According to today's Field Poll Schwarzenegger's popularity is low, just as it was in 2005 when he was also pushing a number of ballot initiatives. As you know, they all lost. This feels like deja vu. Are this year's initiatives in danger of suffering the similar fate?

10:26

John Marelius - It's deja vu all over again, but only up to a point. The dynamics are quite different this year than they were in 2005. For starters,

10:29

John Marelius - I didn't mean to post that quite so soon. The dynamics in 2005 were differnet. Schwarzenegger's agenda then was highly partisan and there was a united front of Democrats and labor unions that mobilized against it from the start. Process reforms are a hard sell to begin with, because it's hard to get voters excited about them. If they become partisan, it becomes an impossible sell because you lose half of your potential supporters. Schwarzenegger has learned from that mistake and assembled a bipartisan coalition to promote the six budget-related propositions on the May 19 special election ballot. And it's unclear at this point how strong the opposition wil be. But it will be nothing like he faced in 2005.

10:31

SignOnLiveChatModerator - Which proposition is the most controversial?

10:35

John Marelius - By far, Proposition 1A is the most controversial. It would create a state spending cap and require money to be set aside in an emergency reserve fund in the event of economic downturns. Schwarzenegger and Democratic leaders in the Legislature sought to neutralize opposition, especially from public employees unions, by extending temporary increases in income, sales and motor vehicle taxes in the budget agreement for two years. Some taxpayer groups claim the spending cap is a sham, but business groups are pretty much on board.

10:38

[Comment From KC]
At what point do you think the governor starts being painted as a lame duck, and will that affect his ability to influence the May election?

10:40

John Marelius - Schwarzenegger has a mixed track record when it comes to promoting ballot propositions. When he's popular he wins; when he's not popular he loses. Still, he has the biggest megaphone in the state and that counts for a lot, especially if there's not much organized opposition. I think where his lame duck status will come into play is as we get closer to the 2010 elections for governor. He's never had much success campaigning for candidates anyway and in 2006 stopped trying.

10:40

SignOnLiveChatModerator - According to the Field Poll, Proposition 1C currently is not backed by a majority. It still remains to be seen which initiatives will and will not pass. What happens if the voters don't approve these propositions?

10:42

SignOnLiveChatModerator - For those who don't know, Prop. 1C is called the Lottery Modernization Act, it allows the state to borrow against future lottery proceeds to help balance the budget.

10:42

John Marelius - The estimate is that if they all fail, it will blow about a $6 billion hole in the budget. Given the declining economy, it would probably be larger than that. Proposition 1C, which is "lottery modernization," is a huge leap of faith anyway because it assumes the lottery can somehow generate more revenue.

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