Governor, are you really serious about pension and budget reform?
Arnold Schwarzenegger is on the side of fiscal sanity by demanding that the legislature repeal too-generous pension benefits it enacted in 1999 as part of a package of pension. He's also right to demand that the state adopt a larger rainy day fund. He's taken a hard line on both, refusing to agree to a budget until he gets these reforms.
That's why it's utterly maddening -- and counter-productive -- for him to seek to borrow $2 billion from CalPERS, the big state pension fund, as part of his budget solution.
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Yes, technically, these are two unrelated policies. But pursued together, they send a mixed message. If Schwarzenegger is so serious about putting pensions on a sustainable base and about making the budget process more rational that he's willing to hold up the budget for the rest of the year, then why use an expensive borrowing manuever that involves the pension fund?
It's enough to make a reasonable person wonder about the governor's credibility. The only way to resolve those questions is for the governor to do a mea culpa on the pension borrowing, and stick to his guns on pensions and budget.