California crisis puts poor and elderly at risk

IT HAS now gone well beyond mere political posturing. California, once the US's richest state, is beginning to feel the effects of its worst fiscal crisis since the Great Depression.

Unless this is resolved, the poor and elderly may soon be among the main victims. For the past 48 days, the state has been without a budget. It has been compelled to issue IOUs to its many thousands of employees and other creditors because its Democratic-run legislature cannot agree on a cost-cutting package introduced by its Republican governor.

So far the impact has been limited, although the issue has generated considerable national interest because the idea of the Golden State going broke is considered, at the very least, unusual. But last week a federal appeals court upheld a lower court's ruling that prohibited California from making any further payments - including IOUs - to doctors, hospitals, hospices and nursing homes until it has a budget.

This means that the 4.2 million Californians on Medi-Cal, the state's health programme for the poor, could eventually be denied care. So could the tens of thousands of old and disabled people who have state-funded home help.

If no budget agreement is reached, the crunch is expected at the end of this month, when the small cash reserves held by hospices, nursing homes and other health centres are likely to run out. Some of California's larger hospitals are already making plans to take in patients turned out on to the streets. Still more ominously, reports are beginning to emerge of private doctors turning away Medi-Cal patients because they fear their bills will go unpaid.

The Governor, Pete Wilson, has never made any secret of the fact that he blames the poor for the state's financial problems. He argues that the number of welfare recipients is rising four times faster than the state's steadily growing population, which now stands at some 30 million. Welfare, he says, is the 'prime engine' powering the state's perennial overspending.

In an effort to bridge a dollars 11bn (pounds 5.7bn) deficit, he has drawn up a budget that is generally characterised as draconian. It includes cutting welfare grants by up to 25 per cent, eliminating many medical and dental services, and reducing local government funding. He has also proposed cutting dollars 2bn from education spending, even though California's classrooms are among the US's most underfunded and over-crowded. Teachers in Los Angeles, who have been told their wages will be cut, have threatened to strike when the new school term begins.

Recently, however, there have been signs that the political deadlock could be about to shift. On Friday, Mr Wilson presented a revised plan in which schools would have dollars 700m more, although only by borrowing from future funding. This was expected to go before the legislature late yesterday. There is increasing pressure to reach a compromise, both because of the Medi-Cal ruling and because some banks have been refusing to honour the state's IOUs.

The crisis has contributed to a steep plunge in Mr Wilson's popularity and has fuelled disillusionment with the political process.

News
Netherlands' goalkeeper Tim Krul fails to make a save from Costa Rica's midfielder Celso Borges during a penalty shoot-out in the quarter-final between Netherlands and Costa Rica during the 2014 FIFA World Cup
newsGoalkeepers suffer from 'gambler’s fallacy' during shoot-outs
Arts and Entertainment
Sydney and Melbourne are locked in a row over giant milk crates
artCultural relations between Sydney and Melbourne soured by row over milk crate art instillation
Arts and Entertainment
Adèle Exarchopoulos and Léa Seydoux play teeneage lovers in the French erotic drama 'Blue Is The Warmest Colour' - The survey found four times as many women admitting to same-sex experiences than 20 years ago
arts + entsBlue Is The Warmest Colour, Bojack Horseman and Hobbit on the way
News
people
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebookA unique anthology of reporting and analysis of a crucial period of history
News
Morrissey pictured in 2013
people
News
A scene from the video shows students mock rioting
newsEnd-of-year leaver's YouTube film features playground gun massacre
News
i100
Life and Style
The director of Wall-E Andrew Stanton with Angus MacLane's Lego model
gadgetsDesign made in Pixar animator’s spare time could get retail release
News
peopleGuitarist, who played with Aerosmith, Lou Reed and Alice Cooper among others, was 71
Independent
Travel Shop
the manor
Up to 70% off luxury travel
on city breaks Find out more
santorini
Up to 70% off luxury travel
on chic beach resorts Find out more
sardina foodie
Up to 70% off luxury travel
on country retreats Find out more
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Hydraulic Power Pack Design Engineer

competitive: Progressive Recruitment: I recruit for contract mechanical design...

SQL DBA/ C# Developer - T-SQL, C#.Net

£45000 - £55000 per annum + Benefits: Ashdown Group: Working with an exciting ...

SCO Supervisor Electrical

competitive: Progressive Recruitment: My client based in the Midlands is looki...

Ecommerce Executive

£20000 - £24000 per annum: Ashdown Group: Ecommerce Executive Working with an...

Day In a Page

Dress the Gaza situation up all you like, but the truth hurts

Robert Fisk on Gaza conflict

Dress the situation up all you like, but the truth hurts
Save the tiger: Tiger, tiger burning less brightly as numbers plummet

Tiger, tiger burning less brightly

When William Blake wrote his famous poem there were probably more than 100,000 tigers in the wild. These days they probably number around 3,200
5 News's Andy Bell retraces his grandfather's steps on the First World War battlefields

In grandfather's footsteps

5 News's political editor Andy Bell only knows his grandfather from the compelling diary he kept during WWI. But when he returned to the killing fields where Edwin Vaughan suffered so much, his ancestor came to life
Lifestyle guru Martha Stewart reveals she has flying robot ... to take photos of her farm

Martha Stewart has flying robot

The lifestyle guru used the drone to get a bird's eye view her 153-acre farm in Bedford, New York
Former Labour minister Meg Hillier has demanded 'pootling lanes' for women cyclists

Do women cyclists need 'pootling lanes'?

Simon Usborne (who's more of a hurtler) explains why winning the space race is key to happy riding
A tale of two presidents: George W Bush downs his paintbrush to pen father’s life story

A tale of two presidents

George W Bush downs his paintbrush to pen father’s life story
Restaurateur Mitch Tonks has given the Great Western Pullman dining car a makeover

The dining car makes a comeback

Restaurateur Mitch Tonks has given the Great Western Pullman dining car a makeover
Gallery rage: How are institutions tackling the discomfort of overcrowding this summer?

Gallery rage

How are institutions tackling the discomfort of overcrowding this summer?
Louis van Gaal has £500,000 video surveillance system installed to monitor Manchester United players

Eye on the prize

Louis van Gaal has £500,000 video surveillance system installed to monitor Manchester United players
Women's rugby: Tamara Taylor adds fuel to the ire in quest to land World Cup

Women's rugby

Tamara Taylor adds fuel to the ire in quest to land World Cup
Save the tiger: The day America’s love of backyard tigers led to a horrific bloodbath

The day America’s love of backyard tigers led to a horrific bloodbath

With only six per cent of the US population of these amazing big cats held in zoos, the Zanesville incident in 2011 was inevitable
Samuel Beckett's biographer reveals secrets of the writer's time as a French Resistance spy

How Samuel Beckett became a French Resistance spy

As this year's Samuel Beckett festival opens in Enniskillen, James Knowlson, recalls how the Irish writer risked his life for liberty and narrowly escaped capture by the Gestapo
We will remember them: relatives still honour those who fought in the Great War

We will remember them

Relatives still honour those who fought in the Great War
Star Wars Episode VII is being shot on film - and now Kodak is launching a last-ditch bid to keep celluloid alive

Kodak's last-ditch bid to keep celluloid alive

Director J J Abrams and a few digital refuseniks shoot movies on film. Simon Usborne wonders what the fuss is about
Once stilted and melodramatic, Hollywood is giving acting in video games a makeover

Acting in video games gets a makeover

David Crookes meets two of the genre's most popular voices