California nonsense dies

In handing Gov. Arnold Schwarzenegger his biggest legislative setback, members of a Senate panel expressed concerns Monday that his plan to cover most Californians without health insurance was inadequately funded and would worsen the state budget crisis.

But the legislation negotiated by the Republican governor and Assembly Speaker Fabian Nunez, D-Los Angeles, was unable to surmount several political hurdles beyond the annual tab, now estimated at $14.9 billion. A proposed tobacco tax drew high-powered opposition. The fact that raising taxes takes a two-thirds vote in the Legislature made finding financing a complicated exercise. Republicans never supported the measure. Democrats weren't on the same page. "It's really a misnomer to term this as a bipartisan effort," Sen. President Pro Tem Don Perata, D-Oakland, said after the Senate Health Committee voted to block the bill, AB X1 1.

Because the plan to provide coverage for 3.7 million of the 5.1 million permanently uninsured Californians was backed by the governor and Nunez, proponents tried to emphasize its bipartisan support. During a yearlong campaign for his No. 1 priority, however, Schwarzenegger was unable to persuade even one Republican lawmaker to join him.

Meanwhile, the Democrats on the Senate Health Committee who voted for AB 8, another bill to expand health care that Schwarzenegger vetoed last year, were unable to hold together after Nunez pushed AB X1 1 through the Assembly. Only one member of the 11-member panel - Sen. Mark Ridley-Thomas, D-Los Angeles - voted for it. Seven members voted no, including Sen. Dave Cox, R-Fair Oaks, and three abstained, including Sen. Darrell Steinberg, D-Sacramento.

Democrats who voted against the bill cited a report released last week by the Legislative Analyst's Office that concluded the plan could be underfunded by billions of dollars. They also expressed concern it would add to the state's projected $14.5 billion deficit. "You can say you're going to cover 800,000 more children, but if there's no money, you're not going to do that and it's cruel to raise such expectations," Sen. Sheila Kuehl, the panel's chairwoman, told reporters.

Schwarzenegger and Nunez maintained the plan would raise enough money to pay for itself. Their plan called for mandatory employer and employee contributions, a fee on hospitals, an additional $1.75 tax on a pack of cigarettes and leveraging the money to increase matching federal funds. Democratic opponents said the provision requiring most workers to contribute to the cost of their coverage would be unaffordable for some families. Republicans, meanwhile, warned that requiring most employers to contribute to their workers' coverage would force many small businesses to close.

In a statement, Schwarzenegger vowed not "to give up trying to fix (the state's) broken health care system." "If it were easy, California would have gotten universal coverage 60 years ago - that's when Governor Earl Warren's reform plan fell short by a single vote," the governor said.

Anthony Wright, executive director of Health Access, a statewide health care consumer advocacy coalition, noted the only significant new funding in AB X1 1 that was not in AB 8 was the proposed tobacco tax. Although some panel members said the bill did not have enough ways to raise revenue, "it seems it had one too many that raised additional opposition from the tobacco industry to kill it," Wright said.

The tobacco industry spent millions of dollars in 2006 to defeat a $2.60-a-pack tax increase for health care. There is no direct evidence the industry played a role in Monday's vote, but Nunez previously charged that tobacco had targeted some Democrats in the Assembly with unflattering mailers.

Betsy Imholz, special projects director for Consumers Union, the nonprofit publisher of Consumer Reports, said it's "really easy to kill health care reform because it's complicated." "So many interests were involved that when they began to fight among each other, it was easy for the plan to fall apart," Imholtz said. "We're disappointed to see it go down."

In a brief statement to the Senate committee, Nunez urged the panel to propose its own solution for California's health care crisis. "I would challenge the members of the Senate to come up with a plan that's doable, that can withstand the same type of scrutiny that (AB X1 1) was put through in this committee," the speaker said.

Perata, who advised members of the Senate panel "to vote their conscience," said the mounting budget deficit made it difficult to sell the bill to constituents. "There are going to be layoffs in this state," Perata told reporters. "There are going to be layoffs in school districts." The legislation, he noted, would have required a simple majority to clear the Legislature. Voters would have had to approve the financing. But it takes a two-thirds majority to increase taxes in the Legislature, which Perata said would be needed if there were a shortfall. A two-thirds vote requirement, he noted, already makes it difficult for the Legislature to pass a state budget on time.

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Australia: A corrupt government health boss with a bad memory

There seems to be an epidemic of bad memories among West Australian officials and politicians

THE return of WA Inc was felt with full force yesterday when Australia's highest-paid public servant was forced to resign following a damning corruption report linking him to former premier Brian Burke. The West Australian Government is now bracing itself for nine reports, to be released in the next three months, by the Corruption and Crime Commission, all involving Mr Burke's lobbying activities.

The CCC yesterday recommended that the Director of Public Prosecutions consider legal action against Neale Fong, the state's $565,272-a-year director-general of health. Dr Fong resigned shortly after the report was made public, saying he was embarrassed that he had not recalled 33 emails between himself and Mr Burke, but that they had been "totally innocuous". Dr Fong had told the CCC under oath that there was no personal or professional business relationship between himself and Mr Burke and that he had no recollection of any of the 33 emails.

The CCC recommended that consideration be given for Dr Fong to be prosecuted "arising from his representation of his relationship with former premier, Mr Brian Burke". The CCC claimed Dr Fong had engaged in three cases of misconduct, the most serious being that he disclosed to Mr Burke that the CCC was investigating a fellow senior officer in the department.

Corruption authorities have recorded and listened to about 13,000 phone conversations of Mr Burke related to several major lobbying deals. The calls were intercepted for 18 months from the beginning of 2006. Mr Burke himself was unaware all his phone calls and computer traffic was being monitored until he called before the CCC last year to give evidence under oath....

Yesterday's report stated that Dr Fong engaged in serious misconduct by disclosing a restricted matter to Mr Burke, namely that the commission was investigating a senior Department of Health official, Michael Moodie. The health chief was also reported to have engaged in misconduct by telling his minister, Jim McGinty, that he had no recollection of any emails between himself and Mr Burke and that he had no personal relationship with Mr Burke. The commission found evidence to the contrary. The report also found Dr Fong engaged in misconduct by failing to report the disclosure to him by Mr Burke of what the former premier claimed to be confidential cabinet information.

Commissioner Len Roberts-Smith QC said it was inconceivable that Dr Fong had not, could not and did not recall that there were any emails between himself and Mr Burke. A statement by the CCC said: "Although the investigation concerned the facts of Dr Fong's relationship with Mr Burke, there was no allegation against Mr Burke, his conduct was not the subject of the inquiry and the commission expresses no opinion about it in this report."

Dr Fong said: "I am embarrassed that I did not recall the emails from Mr Burke. However, I receive approximately 2000 emails and send 650 emails per month. I receive thousands of text messages, telephone calls and messages and pieces of correspondence every month."

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