California’s Winter of Discontent

It comes as no surprise that a recent Gallup poll showed that Americans now believe that the biggest problem in the country are its politicians (29 percent), not the pandemic (22 percent). While tens of millions are frustratingly looking for a COVID-19 vaccine, the Biden Administration is busy fighting climate change.  While Congress is prepping for an impeachment trial for an out-of-work president, millions of Americans can’t go back to their jobs and students can’t get into their classrooms.

All this against a blizzard of dollars blowing randomly all over the country. So far, the federal government has appropriated $3.6 trillion in COVID-19 relief, and not all of it has been spent.  If you add in the Pelosi/Schumer plan to spend an additional $1.9 trillion, the total becomes $5.5 trillion.  This is more than the entire amount the federal government spent for all of fiscal year 2019, including defense, Medicare, Medicaid, Social Security, and politicians’ favorite pork programs.

California will get a whopping share of the federal COVID relief funds.  In the $900 billion package approved in December, the state is expected to receive about $50 billionCalMatters reported that the breakdown could look like this:

  • $20 billion in unemployment assistance
  • $17 billion in direct stimulus checks of $600 each to lower-income Californians
  • $2 billion in rental assistance
  • $1.3 billion for COVID-19 testing, tracing and vaccines
  • $8.5 billion for schools, community colleges and universities
  • $1 billion for childcare
  • $2 billion for transportation.

If Speaker Pelosi and Senator Schumer get their way, California could expect tens of billions more, despite a whopping $15 billion budget surplus and preliminary income tax revenue estimates for December and January at $10 billion above the Newsom administration’s projections in its January budget.

A billion here, a billion there, soon you’re talking real money. But for California’s progressive politicians, it’s still all play money.  How else can you explain the cavalier attitude of the bureaucracy in squandering $11 billion of employment benefits to scam artist (by the way, nobody still knows the real amount  — state officials think it could be as high as $19 billion), or Governor Newsom’s proposed Golden State Stimulus, which would provide $600 for illegal immigrants who could not access the $600 from the federal government?

Despite the state being flush with cash, many Californians are at the breaking point. The state shed another 52,000 jobs in December, public school students continue to languish at home, and small business owners are shuttering their businesses. As for the silver bullet that would get the state back on its feet — COVID-19 vaccinations – the vaccination rates in the state are among the lowest in the nation. More than a year into the pandemic, California is in its winter of discontent, and there’s no golden sun on the horizon.

Rowena Itchon is senior vice president of the Pacific Research Institute.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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