Twenty months ago, then-Lt. Gov. Gavin Newsom sealed the endorsement of the powerful California Nurses Association in the governor’s race with an impassioned promise to bring single-payer health care to the Golden State.

“There’s no reason to wait around on universal health care and single-payer in California. It’s time to move [Senate Bill] 562. It’s time to get it out of committee,” Newsom told a nurses union conference in September 2017. “If we can’t get it done next year, you have my firm and absolute commitment as your next governor that I will lead the effort to get it done. We will have universal health care in the state of California.”

But now, as Newsom undertakes a “California for All” tour of the state’s largest cities, that ambitious rhetoric has long since given way to more modest proposals – and to attempts to dampen expectations. Instead of the governor reviving Senate Bill 562 – a 2017 measure passed by the Senate that would have committed the state to creating a single-payer system – he now says that’s not feasible without the assistance of the federal government.

Newsom has asked the Trump administration to give California a waiver from federal laws allowing the state to set up its own unique health care system – and for a sum equivalent to the amount the federal government now spends on health care for state residents. Senate Bill 562 died in the Assembly over expectations it would cost about $400 billion a year – double the state’s budget.

Governor risks backlash from fellow Democrats

The May Revise of the 2019-20 state budget that Newsom unveiled last week includes several proposals to expand availability of health care partly subsidized by the state government, in particular raising the income threshold of eligibility up to $73,000 a year. Individuals who make $48,000 a year or more are not eligible for federal subsidies under the Affordable Care Act. But he stopped short of extending Medicaid coverage to unauthorized individuals in California, citing its $3.4 billion cost. And he made no concrete proposals on advancing single-payer beyond previously announced plans to use the newly created state Council on Health Care Delivery Systems to examine how the state could transition to such a system.

The potential for a backlash from Newsom’s own party is clear. Politico reported in March than Newsom believed strongly that leadership on single-payer should be led by “the horseshoe,” an insider’s term for the governor’s unusually shaped office. But having a commission look at the state’s possible courses of action isn’t the dramatic move that fans of Democratic presidential candidates like Sen. Bernie Sanders and Sen. Elizabeth Warren want. A Quinnipiac University poll released in February showed 61 percent of state Democrats back a government-run single-payer system in California.

The California Nurses Association has expressed disappointment with the lack of progress. In February, CNA lobbyist Stephanie Roberson told the Sacramento Bee that it was “baffling” that no state lawmaker had introduced a measure like Senate Bill 562 and said her union strongly believed that incremental improvements in health care access were not enough.

“We can’t, as leaders, just protect what we have because we fundamentally believe that health care is [a] human right,” Roberson said.

Lt. Gov. Gavin Newsom appears comfortable with borrowing from Bernie Sanders’ playbook and embracing single-payer health care in his bid to succeed Gov. Jerry Brown in the June open primary and the November general election.

That’s a key takeaway of campaign watchers from the past month of the California gubernatorial campaign. Perhaps the signature moment: Newsom taunting “defeatist Democrats” in a San Diego debate last week – a clear shot at his main Democratic rivals, former Los Angeles Mayor Antonio Villaraigosa and state Treasurer John Chiang, who both support expanded state health care but are leery of single-payer’s potential cost.

The emergence of the former San Francisco mayor as an outspoken advocate of single-payer amounts to a triumph for the California Nurses Association, the leading champions of Senate Bill 562 – which commits the state to providing health care for all residents without providing key details on how that would be achieved. Despite the lack of details, the bill – known as the Healthy California Act and co-sponsored by Sens. Ricardo Lara, D-Bell Garden, and Toni Atkins, D-San Diego – passed the Senate on a 23-14 vote last June.

But Assembly Speaker Anthony Rendon, D-Paramount, incensed the nurses union later in June when he shelved the bill, declaring it “woefully incomplete.” Rendon cited its failure to identify how it would pay the estimated $400 billion that SB562 would cost per year – more than triple the state’s general fund budget. He also faulted the measure for violating spending limits in the state Constitution and for not making the case on how California would get many needed federal waivers to proceed.

In January, Rendon repeated his criticisms, saying there had been no progress in making SB562 into a serious legislative proposal.

But with polls showing national Democrats consider single-payer health care a high priority, Newsom is eager to take advantage of their enthusiasm. Yet while it may help him in the short term in the run-up to the June primary, it is unclear whether backing SB562 will be popular with the broad electorate in the long term.

A May 2017 poll by the Public Policy Institute of California found that 65 percent of adults surveyed support single-payer health care – but that the number plunged to 43 percent when those being surveyed were told substantial new taxes would be needed. A follow-up PPIC poll in September found just 32 percent of likely state voters backed single-payer.

Rendon recall bid fails without collecting a single signature

Another sign that single-payer support may have its limits has been the collapse of an effort to recall Rendon that was launched last summer after he blocked the advance of SB562. The bid received national attention after an Associated Press story depicted it as one more sign of how divided California Democrats had become.

But the recall campaign unceremoniously ended in early February, with organizers saying they were now focused on defeating Rendon’s bid for re-election – not on recalling him. To force a recall vote, 23,000 petition signatures would have to be gathered. According to the Los Angeles Times, the most recent official report on the recall campaign filed with the state showed no signatures had been gathered.

Public and private polls for months have generally shown Newsom to be leading Villaraigosa, with Chiang, former Superintendent of Public Instruction Delaine Eastin (a Democrat) and Republican candidates Travis Allen, a Huntington Beach assemblyman, and Rancho Santa Fe businessman John Cox substantially behind them. But the last poll by PPIC, released Feb. 7, showed a statistical dead heat, with Newsom getting 23 percent and Villaraigosa 21 percent – within the poll’s margin of error.

The November

Progressive Democrats in both the state Assembly and Senate are eager to broadly expand public services. Brown, however, has spent his second go-around as governor emphasizing the dubiousness of adding permanent new spending programs when state revenue is so volatile because of its dependence on income and capital gains taxes paid by the very wealthy.

The governor warns that even a moderate recession could lead to a loss of $55 billion in revenue over three years. Given that revenue plunged $30 billion in one year at the start of the Great Recession, the memories of the budget carnage under Gov. Arnold Schwarzenegger are fresh, especially the huge cuts in K-12 education spending.

But the California Nurses Association and its legislative allies are signalling they’re ready for another full-on push for a single-payer health care system. Assembly Speaker Anthony Rendon, D-Lakewood, continues to ask proponents how such a system could be funded, given that its estimated annual cost of $400 billion is more than triple the state’s current general fund budget of $125 billion. He effectively killed Senate Bill 562, the CNA-backed single-payer measure, last session, perturbed that advocates refused to offer clear explanations of how it would be funded.

Universal free preschool, health care for undocumented sought

The next most costly initiative on the table is a long-discussed proposal to provide universal free preschool to 4-year-olds. Many Democrats share former Assembly Speaker Darrell Steinberg’s view that it should be first on the list of any new state programs. Steinberg’s 2014 proposal would have cost an estimated $2.5 billion a year. More recently, the Common Sense nonprofit advocacy group has been lobbying for a more ambitious program than Steinberg’s with a price-tag of at least $5 billion a year.

Assembly Budget Committee Chairman Phil Ting, D-San Francisco – the lawmaker who so far has issued the most comprehensive proposed budget – wants to spend $4.3 billion of the $7.5 billion in additional revenue expected by the LAO, with the remainder going to the state’s rainy-day fund.

Ting’s most notable proposal is to provide Medi-Cal health care to undocumented immigrants up to age 19, at an annual cost of about $1 billion after smaller initial outlays. He also wants to increase college scholarships, restore cost-of-living increases for state benefits going to the aged, blind and disabled, and increase access to child care. Ting’s plan also calls for an expansion of preschool, but with a plan that’s less far-reaching than Steinberg’s proposal.

Under the California Constitution, the governor must present a budget for the fiscal year starting July 1 by Jan. 10. In May, after the state Department of Finance updates its revenue and expenditure forecasts, the governor’s office issues a revised budget.

Brown made few concessions during the last budget cycle. In May, he ignored the then-loud push for a dramatic expansion of state health care, but he did agree to increase salaries for child care providers and to continue funding a joint state-counties program meant to ease access to health services for seniors and low-income families.

The California progressive movement’s summer of discontent continues, with anger still on display over the abrupt withdrawal of a single-payer health care bill and over the May election of a party insider as California Democratic chairman.

This week, the Associated Press reported that progressives remain interested in pursuing a recall campaign against Assembly Speaker Anthony Rendon, D-Paramount, (pictured) for his decision to kill Senate Bill 562, the Healthy California Act. Los Angeles activist Steve Elzie is a lead organizer.

The California Nurses Association last month paid for two mailers to be sent to constituents in Rendon’s Los Angeles County district blasting him for “holding health care hostage” and “protecting politicians, not people’s health care.” The mailers urged constituents to complain to Rendon’s offices over the decision, but did not advocate a recall.

That decision may reflect that CNA President RoseAnn DeMoro – who initially led the criticism of Rendon – has realized how difficult it would be to ultimately remove him from office.

Obtaining the 20,000-plus signatures needed to trigger a recall election might not be much of a problem, given that single-payer champion Bernie Sanders got 44 percent and 48 percent of the vote in the June 2016 Democratic presidential primary in California’s 38th and 47th Congressional Districts, respectively. The districts cover much of Rendon’s 63rd Assembly District district which includes parts or all of Commerce, Bell, Lynwood, Paramount and Lakewood.

But Rendon has gotten at least 69 percent of the vote in his three Assembly bids. He also has more than $1.2 million in his campaign war chest and has the support of other influential unions, meaning ready access to more donations and help campaigning.

Rendon killed SB562 because he said it failed to adequately identify how it would pay its $400 billion in annual costs to provide health care to every Californian.

‘Berniecrat’ still won’t accept loss in party chair vote

The other flap pitting the party establishment against “Berniecrats” also flared this week when Bay Area political organizer Kimberly Ellis launched a new salvo over her narrow loss for state party chairman to Eric Bauman, a nurse who has long been a fixture in Los Angeles County Democratic politics and was deputy to the last state chair, former Congressman John Burton.

At May’s state Democratic convention in Sacramento, Bauman held off a late surge from the lesser-known Ellis to win 51 percent to 49 percent. Ellis immediately challenged what she said were election irregularities, leading to a July recount in which 47 of about 3,000 ballots were thrown out but Bauman’s margin of victory was unchanged.

Ellis and her fellow Sanders’ supporters, however, still don’t accept the results.

On Tuesday, she called on the California Democratic Party to accept binding arbitration to determine who really won the May election. She hinted it was the only way the party could head off a lawsuit that she suggested last month was forthcoming if she were unhappy with how party officials handled her appeal, which continues this month with a hearing of the Democratic Party credentialing committee.

California Democratic Party spokesman Mike Roth said the party would stick to its rules, which don’t provide for arbitration.

“Ms. Ellis is now deep in her own end zone and throwing a desperate Hail Mary pass in hopes of changing the outcome of an election that she lost fair and square,” Roth said.

But Ellis’ “Vote for Kimberly” website remains unchanged and continues to feature sharp – if indirect – criticisms of Bauman for allegedly close ties to corporate interests.

SACRAMENTO – Assembly Speaker Anthony Rendon, D-Paramount, an avowed supporter of single-payer health care, nevertheless announced last week that he was pulling the plug on a Senate-passed measure that would create such a system in California.

Rendon, who is holding the bill in committee, was only the proximate cause of AB562’s death. Its fate was sealed after a Senate floor analysis last month pinned its likely cost at $400 billion – more than three times the state’s entire general-fund budget.

“It didn’t make any sense,” Rendon recently told the Sacramento Bee. “It just didn’t seem like public policy as much as it seemed a statement of principles. I hope the Senate takes this chance to take the bill more seriously than they did before.”

According to its bill language, the Healthy California Act would “provide comprehensive universal single-payer health care coverage and a health care cost control system for the benefit of all residents of the state.” The measure would have tossed out California’s myriad systems of private, insurance-backed and government-funded health care and replaced it with a single, government-managed system run by a newly created state agency.

Such a massive change would demand volumes of detailed legislative language, yet the bill itself was remarkably brief and lacking in specifics. It even failed to include any explanation for how it would receive the necessary waivers from the federal government.

The Appropriations Committee analysis concluded the bill would lead to “increased utilization of health care services,” given that all residents would be free to “see any willing provider, to receive any service deemed medically appropriate by a licensed provider, and the lack of cost sharing, in combination, would make it difficult for the program to make use of utilization management tools such as drug formularies, prior authorization requirements, or other utilization management tools.” So all financial bets were off, given an expected – and probably massive – hike in demand.

To fund the $400 billion program, the Appropriations Committee concluded the state would have to raise about $200 billion in new tax revenues. That would mean a new 15 percent payroll tax, with no cap on the wages subject to the tax. Shifting any of those costs from taxpayers to enrollees would be impossible under provisions that prohibit “members from Healthy California from being required to pay any premium” or “from being required to pay any co-payment, co-insurance, deductible and any other form of cost-sharing for all covered benefits.” 

State officials often argue about programs that spend millions of dollars, but had a surprisingly short debate about one that would cost hundreds of billions of dollars. One reason that might be is that Gov. Jerry Brown already had expressed deep skepticism about the measure. “This is called ‘the unknown by means of the more unknown,’” he told reporters in March. It was unlikely he would have signed it, especially given his concern about creating new spending programs. Critics argue that the governor’s public views gave Democrats a free pass to vote for it and assuage their political base while knowing it was unlikely to become law. Rendon’s comments to the Bee certainly give ammunition to those who saw the bill as a half-baked “statement” bill.

Support and opposition fell along predictable and partisan lines. Liberal interest groups, unions and Democratic politicians typically supported the bill, while conservative groups, taxpayer organizations and Republicans opposed it. Some groups expressed views similar to Rendon’s – supporting the single-payer concept but expressing concern about specifics.

The latter, cautious point of view won the day. After all, the bill raised more questions than it answered. It’s unclear how the new system would work or how the new government agency would operate. There are questions about the effects a 15 percent payroll tax would on the economy and jobs creation and about the magnet effect if California created an unlimited, valuable new benefit available to anyone who simply lives in the state. There are questions about federal waivers and how the California system would intersect with federal programs. And that’s just for starters.

Instead of trying to answer those questions thoroughly, the bill’s backers did as Rendon suggested – introduced a measure that stated some principles and goals, but didn’t really explain how the state government might fund them. Given the debate the health care issue sparked at the latest state Democratic Party convention and on the floor of the Legislature, it’s clear that the single-payer issue will be around or a while, regardless of the fate of this particular bill.

Steven Greenhut is Western region director for the R Street Institute. Write to him at sgreenhut@rstreet.org.

Will progressive lawmakers challenge Gov. Jerry Brown over his decision to dash their big dreams for the 2017-18 fiscal year? Or will they acquiesce as they mostly have in recent months of May after Brown released revised budgets without money for new or expanded government programs?

Despite the pleas of Assembly Speaker Anthony Rendon, D-Paramount, and Senate President Kevin de Leon, D-Los Angeles, that he take a break from his usual frugality, the governor’s revised 2017-18 $124 billion general fund budget released last week is far more concerned about helping public schools and beefing up the state’s rainy-day fund than any new liberal cause.

With a month until the June 15 deadline to adopt a state budget, that means Democratic lawmakers – especially those from liberal districts in the Bay Area and Los Angeles County – have a big decision to make: Do they accept a wipeout? Or do they put pressure on Brown by sending him bills popular with Trump-agitated grass-roots Democrats and making him veto them?

This is the dynamic created by the fact that Democratic legislative leaders entered the current session in January with ambitious hopes for bold new programs making college much cheaper, expanding state affordable housing efforts and providing health care for all.

Ambitious legislation not taken seriously

The governor doesn’t even think the ideas are worth discussing.

Brown’s budget rejects the basics of Assembly Bill 1356, by Assemblywoman Susan Talamantes Eggman, D-Stockton, which would have added a 1 percent surtax on California families earning $1 million or more to cover the cost of fees and tuition for in-state students at the University of California, California State University and the California Community College system. The governor also dismissed without comment Assembly Democrats’ push to help cover basic living expenses for 350,000-plus UC and CSU students from families which make less than $150,000 a year.

Brown’s budget makes no mention of SB562, a bill by Sens. Ricardo Lara, D-Bell Gardens, and Toni Atkins, D-San Diego, that would create a government-run single-payer health care system. It’s won some early committee victories, despite not having a fiscal analysis that explains how or who will pay for the program.

And a push supported by dozens of Democratic lawmakers to impose a fee on real-estate transactions to provide a steady stream of hundreds of millions of dollars in annual funding for subsidized affordable housing projects was flatly rejected by Brown as inadequate to addressing California’s housing crisis.

At a Thursday press conference, the governor said, “I don’t think we should throw money at the housing problem if we don’t adopt real changes that make housing production more efficient and less costly. We’ve got to do that first.”

For nearly two years, the governor has pushed for laws reforming the California Environmental Quality Act to give builders fewer obstacles to constructing new housing units. But legislative Democrats have heeded their union, trial lawyer and environmental allies who say CEQA shouldn’t be weakened.

Brown and top Democratic lawmakers pulled off a big win last month on an issue they agreed on: the urgent need to improve California’s decaying infrastructure, both for quality-of-life reasons and to help the economy by reducing the drag on the economy caused by bad, clogged roads. They pushed through gas tax hikes to pay for a 10-year, $52 billion infrastructure improvement and repair initiative.

But Brown’s pragmatism about government spending has been the calling card of his second stint as governor. Given his high approval ratings, the governor seems unlikely to believe he needs to make concessions if Democratic lawmakers send him spending bills he doesn’t like.