Cost of California health-care push questioned

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Arnold Schwarzenegger (courtesy Reuters) SAN FRANCISCO (Reuters) - With California facing a $5.5-billion budget gap, Gov. Arnold Schwarzenegger may have to pare his goal of providing health-care coverage to the nearly 7 million uninsured in the state, analysts said on Monday.

The Republican governor crushed his Democratic challenger in an easy re-election victory this month, and aims to use the political momentum to push a plan that on its face should excite California's Democrat-led legislature.

But observers of the state's political scene wonder where money for the plan, which aides are writing, would come from.

"The math doesn't add up," said Larry Gerston, a political scientist at San Jose State University. "I don't understand the means at the moment."

The politics of the issue are much easier to grasp as Schwarzenegger and California's legislature are no longer at each other's throats.

After a bruising 2004 that left Schwarzenegger humbled, this year the Hollywood icon and Democrats teamed up to rally public support for public works bond measures, a partnership some see leading to a bipartisan effort on health policy.

Without providing details, Schwarzenegger said on Sunday on NBC's "Meet the Press" that he wants to reduce health-care costs and extend health coverage to 6.7 million uninsured Californians.

Schwarzenegger spokeswoman Margita Thompson said on Monday the governor's aides are reaching out to groups with a stake in the issues for ideas on how to reach those two goals. But Schwarzenegger will not retreat from his vow against tax increases as he pursues his health-care agenda, she added.

"The governor is an optimistic person who believes that if everyone works together to achieve a goal, it is achievable," Thompson said.

How to achieve that has perplexed many, including some experts Schwarzenegger's office has called on.

They note California faces a $5.5 billion budget shortfall in its coming fiscal year, that credit rating agencies continue to press for the state to close its persistent budget gaps and that Schwarzenegger has ruled out raising taxes to close those shortfalls or to aggressively expand state spending.

On the political front, Schwarzenegger faces a Democrat-led legislature that has sought aggressive health-care goals, including universal coverage favored by powerful union allies. Schwarzenegger has vetoed bills pushing state-run health-care and has routinely sided with California's business interests. 

"It's going to be a very difficult road for the governor on this issue," said Michael Shaw of the National Federation of Independent Business, a small business advocacy group urging the governor's aides to exclude employer mandates from their planning.

Shaw said he expects personal responsibility to play a role in the governor's health-care plan, given Schwarzenegger's record as a body-building champion and his preference for incentives-based public policy over mandates.

© Reuters 2006.