Here's a funny little exchange between Gov. Schwarzenegger and Sacramento Bee columnist Dan Walters during a budget press conference in a Capitol hallway yesterday.

GOVERNOR:...I think that Democrats and Republicans are working together on this. And the key thing is now to just really make sure they don't come up with one-time solutions, because even if you go and withhold your taxes, it's a one-time solution. Or if you go and move the date of paying your paychecks from June 30th to July 1st, to kick it over to the next fiscal year, that's a one-time solution. It doesn't help you in the out years. And so what we have to think about is, how do we make sure that we get rid of the structural deficit once and for all? I think this is what the people expect us to do, to solve this crisis, to solve these problems. Then our credit rating will be good again, people will want to do business with us, people will get money to us. So all good things will happen if we solve this problem and solve it, solve the entire $24 billion.
WALTERS: Governor, don't you have one-time solutions yourself? You have the accelerated withholding. Isn't that a one-time solution?
GOVERNOR: Absolutely correct. And what we don't want to do is add to those, because we make --
WALTERS: So it's all right if you do it but no all right if they do it?
GOVERNOR: No, not to add onto it. Very good point, Daniel. (Laughter) I mean, we don't want to add onto the problem.

Alaska Gov. Sarah Palin, attempting to recover from various political wounds, is backing a ballot initiative in her state that would require notification of a parent or guardian before a minor may obtain an abortion.

This may prove to be a smart political strategy. What's not smart -- or justified -- are attempts to attack Palin for involving herself in a ballot initiative campaign. Governors all over the country --- both Democrats (Ritter of Colorado and Napolitano of Arizona most recently) and Republicans (Schwarzenegger) -- have led such campaigns, even drafting and sponsoring initiatives themselves. But the left in and out of Alaska has tried to accuse Palin of ethical transgressions for supporting measures. Their argument is that a governor, by involving herself in a campaign, is using the resources of her government office for politics. While I have concerns about governors creating plebiscites, Palin's strategy is hardly out of line, or unusual. And her opponents are allowing her to pose as a champion of free speech by attacking her in this way. It'd be wiser to go after Palin for her views on issues and her less-than-distinguished record as governor.

Governors Arnold Schwarzenegger of California and Christine Gregoire of Washington co-hosted the fifth of President Obama's health care forums in Los Angeles earlier this week.

As the Los Angeles Times wrote, "A wide array of forum participants, including hospital and insurance company executives and the mother of a teenager who died from a preventable hospital-acquired infection, gave voice to the growing desire for change." The director of New America's Health Policy Program, Len Nichols, participated in the discussion, as did representatives from Health CEOs for Health Reform.

The White House live-blogged the event, as did the California Endowment, which helped host the discussion. Video of the event will be available here soon and a partial transcript of the forum is posted here.

I'm scheduled to be interviewed tonight (shortly after 8 p.m.) on Inga Barks' radio show on KMJ 580, the big AM talk radio station in Fresno. Possible topics: the special election, California politics, and the governor. You can listen live by clicking here.

He explains why to George Skelton. The governor is interested in looking at changes to the requirement of a two-thirds vote of the legislature to pass a budget. But he also wants to transform the executive branch, which wasn't on the agenda of many folks attending this week's summit in Sacramento on the idea. Schwarzenegger wants to get rid of the independently elected constitutional officers -- the lieutenant governor, the attorney general, the controller, the treasurer -- who sometimes make it hard for him to administer the government.

As a policy matter, Schwarzenegger has a point. There'd be more accountability if the governor could appoint the people in those roles. As a political matter, Schwarzenegger may have hurt the convention effort by saying that. Opponents of the idea will deride the convention as a power grab by a governor whose approval rating is at 33 percent in a new poll.

Gov. Schwarzenegger largely punted in describing the state of the state. So others have picked up the slack. The Sacramento Bee's Dan Weintraub explains how we're doing. There's a little good news, and some bad. 

Even more interesting is this extraordinary piece by New America's Micah Weinberg. He puts Schwarzenegger's speech in context, comparing it to the rhetoric of  other governors. This is part of an extensively analysis Weinberg did of the words governors across the country use. The results are startling: it's what you say, not what you do.

I conducted an analysis of the rhetoric of 97 governors that compared the language in their speeches to that of national party platforms. It showed that approval ratings were higher, chances of re-election greater and margins of victory larger if governors used partisan language that appealed to the political majority in their states. On the other hand, the actual fiscal policy changes they presided over had no discernable effect on their political fortunes.

So if you're a governor in a Republican state, it is not necessary to actually cut taxes in order to be successful, but you'd better talk about cutting taxes as frequently as you can. And in a Democratic state, you need not succeed in expanding state programs, but you had better say that you're planning on doing so.

In California's blockbuster democracy, it's now commonplace for politicians to establish their own political committee to raise money for and spend money on ballot measures (as opposed to the committees they use for their own election campaigns). This tactic, most aggressively advanced by Gov. Schwarzenegger, makes sense in an era when most issues of significance end up on the ballot.

But some believe that ballot measure committees, which may accept a contribution of any limit, are a way around the legal limits on how much one can give a politician. And several politicians have used the ballot measure funds for political spending that had nothing to do with an initiative or referendum.

On Thursday, the state's Fair Political Practices Commission made a stab at limiting the power of ballot measure committees that are controlled by politicians. Such committees will no have to show that they are devoted to a particular ballot measure. What does this mean? Even more such committees, as politicians open multiple accounts to comply with the regulation. So who's the winner in this scenario? Election lawyers. 

It has become obvious that Gov. Schwarzenegger and legislative leaders of both parties simply won't be able to reach a compromise that comes anywhere close to closing California's rapidly growing budget deficit, now estimated at some $40 billion over two years. The state government is running low on cash. Within weeks, it may have to start paying people in IOUs.

Democrats simply won't agree to enough cuts. Republicans won't agree to tax increases, and they can block that because of the state's requirement for a two-thirds vote. The Democrats' convoluted (if politically smart) attempt to do an end run around two thirds and raise taxes by majority vote isn't going anywhere; even if it's revived and signed into law, it's all but certain to get struck down in the courts or overturned by referendum. The governor you ask? Schwarzenegger has little credibility with lawmakers of either party. When it comes to big deals, he simply can't close.

The holiday surprise in California this year was that Gov. Schwarzenegger didn't wait to the usual date -- often January 9 or 10 -- to release his budget proposal for the 2009-10 fiscal year. Instead, the proposal was released on Dec. 31. And in another departure from protocol, the governor wasn't there to do the releasing. He was at his vacation home in Idaho with his family. Finance director Mike Genest handled the chore.

The release seems to be a way to accomplish two political goals: 1) to show urgency (we're releasing the budget early) while 2) burying the news of a horrible budget proposal that includes big spending cuts, borrowing and tax increases, many of which represent a reversal from previous Schwarzenegger positions. Shaking things up is a good thing, but I'm not sure if this early budget release accomplished much. The proposal itself is unlikely to spark fast action by a dysfunctional legislature. But it's not clear if there's any force in the universe that can force consensus in the California legislature.

At a press conference now concluding in downtown LA, Gov. Schwarzenegger said the federal government should not bail out his state -- at least until the state itself adopts a more fiscally responsible budget. In doing so, he appears to have boxed himself in. With Democrats in the legislature resisting deeper spending cuts and Republicans refusing to raise taxes, a federal bailout was seen as a way to address, at least in the short term, the state's persistent and growing budget shortfall.

Schwarzenegger called the press conference to announce his declaration of a state fiscal emergency. This provision of the constitution, enacted by voters as part of Prop 58 in 2004, gives the legislature 45 days to act to bring the budget back into balance. The provision is not seen as having the teeth necessary to force the legislature to fill the budget shortfall.