For Immediate Release

Governor Schwarznegger addressed California this morning with his final State of the State speech. He spoke on the need for pension reform and an increase in higher education spending. The Governor also called for an increase in federal funding for California while criticizing the current provisions in the Senate health reform bill.

New America Foundation experts released the following statements:

Joe Mathews, Irvine Senior Fellow and Co-Author of the forthcoming book, California Crackup: How Reform Broke the Golden State and How We Can Fix It:

Gov. Schwarzenegger's final state of the state speech sounded like a funny, frank valedictory. But once you got past the Pig and the Pony metaphor, the address was a tough-minded declaration of war. The enemy? The federal government. He made plain that he's gunning for federal money to help the state -- a smart strategy for several reasons:

1. He's right. We're a donor state and the feds should be helping us.
2. Getting more money from the feds is one of the few policies that can unite Californians across party lines,
3. and it's a fight that he, as a Republican who has been supportive of President Obama's policies on health care and climate change, is uniquely positioned to win.

The real news -- the national news -- in the speech was Schwarzenegger's threat to oppose the health care legislation -- legislation that he's previously supported -- unless California gets more from the feds, including a Medicaid deal like the one Nebraska cut. If Schwarzenegger can use the precariousness of the health bill to create leverage for more federal aid to California, he will have done his state a huge service.

Mark Paul, Senior Scholar and Deputy Director, California Program, and Co-Author of the forthcoming book, California Crackup: How Reform Broke the Golden State and How We Can Fix It:

Schwarzenegger speech is more "Annie" economics: "We'll pay for it, Tomorrow, Bet your bottom dollar That tomorrow There'll be sun!" The state has a long-term structural budget deficit and $200 billion of overhanging obligations-deficit debt, bonds, retirement promises-that flow from unwise tax cuts and unwise pension increases, some of them approved by Schwarzenegger himself. He rightly challenges the legislature to fix the pension system. But he proposes more borrowing without a way to fund it and refuses to level with Californians about the necessity of restoring the lost revenue. California needs the federal help he seeks to deal with the portion of the budget crisis that comes from the global recession. But California also needs to fix the part of the budget crisis that flows from his own failure of leadership. Reversing his destructive practice of favoring prisons over higher education is a good start for Schwarzenegger. Now, as his last act, he needs to ask Californians to pay for the common goods citizens clearly want and California's future requires.

Lisa Margonelli, Director, Energy Policy Initiative:

I love the Governor's vision of the greentech, farmertech California and his willingness to put money into it. I wish we'd stop funding green growth with tax credits, though, because they reward higher income Californians more than those in the middle. Instead, we need to start offering middle class Californians some of the green pie: Zero interest loans to redo their homes and appliances to reduce their utility bills by 30 percent would be a great incentive for today's home buyers. This would instantly stimulate green construction jobs, reduce middle class homeowner's utility bills, reduce congestion in our energy infrastructure, reduce carbon emissions, AND homeowners could pay back the loans eventually so it wouldn't hit our already strapped state budget. Investing directly in efficiency makes those greenbacks a lot greener than a mere tax credit.

Olivia Calderon, Legislative Director, California Asset Building Program:

Creating more jobs in California is critical to our economic recovery, but ensuring that those jobs result in a more secure future for working Californians is even more important. When millions of working families, the backbone of our economy, are putting in hours and hours of work day after day, and retiring with nothing to show for it - no retirement savings plan, no pension, no personal rainy day fund, our state's economy will never fully recover. Governor Schwarzenegger is perfectly positioned to lay the foundation to build a stronger California economy by creating real opportunities and incentives for Californians to save for short-term and long-term goals.

Micah Weinberg, Senior Research Fellow, California Program:

Governor Schwarzenegger called federal reform 'health care to nowhere,' but he should tell that directly to the thousands of Californians who haven't been able to get insurance due to pre-existing conditions. This round of reform will provide them a bridge to higher quality medical care. It will also help ensure that the hospitals on which we all depend do not go bankrupt from providing care to those who cannot afford it. And it will support our community clinics that play a vital role in keeping our growing workforce healthy and productive.

For media requests, please contact Elizabeth Wu at (510) 295-9859 or wu@newamerica.net.