It has been an eventful week in Sacramento and Washington but advocates for the poor are mostly pleased with the results. Yes, finally some good news.

First, this week the Senate and Assembly Budget Committees held marathon sessions to close out the proposal made by the Governor in the May Revise. On many human service issues like child care and CalWORKs elimination, there were overflow crowds of opponents lining up to speak against the Governor's proposals. Groups like Parent Voices, LIFETIME and California Partnership were very effective at mobilizing families and providers to the hearings. The testimony was so powerful and the arguments put forth by the Administration so weak that even the Republicans could not bring themselves to vote to eliminate child care or CalWORKs.

Here is a complete list of the major actions done by both chambers:

• Rejected the Elimination of CalWORKs
• Rejected the 15.7% CalWORKs Grant Cut
• Rejected the Elimination of the Recent Non-Citizen Entry program
• Rejected Elimination of CDE child care programs
• Rejected Elimination of the Cash Assistance Program for Immigrants
• Rejected Elimination of the California Food Assistance Program
• Rejected cutting $15 from SSI grants for Individuals
• Eliminated the wasteful Statewide Fingerimaging System for CalWORKs and Food Stamps

Though these actions are important victories for low income families, the process is not yet complete. Both houses will now begin a two house conference committee to resolve differences between the budget committees. Because both houses took identical actions on the above list, they will not be "in conference." But that does not mean that these proposals can not be brought back into the conference committee for consdieration later when the conference committee is producing a final product. Additionally the Governor may demand that some of the rejected items be placed in the budget in order for him to agree to sign the budget.

Bold Revenue Proposals by Each House

The key to keeping the defeated proposals out of the budget is to ensure that there is adequate increased revenue to balance the budget without the need for the cuts. This week both the Senate and the Assembly produced revenue plans that would do exactly that. The Senate proposed a $4.9 billion package that includes repealing corporate tax giveaways from last year's budget, increasing alcohol taxes and slightly increasing the Vehicle License Fee.

The Assembly plan would generate nearly $8.7 billion in new revenue by "securitizing" the Beverage Container Fund and then paying off the secured note with revenue from the beverage fund and a newly imposed oil severance tax. The Assembly plan, however, does a number of "flips" of existing funding and revenue streams so that the entire proposal is "revenue neutral" and therefore able to be passed with a majority vote. The Assembly also proposes to repeal the same $2.1 billion in corporate tax giveaways as the Senate plan. Please find attached a piece produced the Assembly Speaker's office that explains how the plan would work.

House Approves TANF ECF Extension

The week was capped off with some mixed news from Washington D.C. For months California and other states have attempting to extend provisions in the federal stimulus bill from last year that provide more than $3 billion in solutions to the state budget. One program is the TANF Emergency Contingency Fund which is reimbursing states for increased welfare costs due to the recession. The other program is an increase in the federal matching formula for the Medicaid program called FMAP.

For months both programs have been in and out of various bills attempting to create jobs and stimulate the economy. With increased public scrutiny on the national deficit, some lawmakers have been reluctant to vote for more stimulus funding unless it is paid for with new revenue or cuts to existing programs. This week Congress needed to vote to extend UI and COBRA benefits for millions of Americans. Both TANF and FMAP were in the initial package but TANF was paid for while FMAP was not. But some liberal members objected because the bill contained extensions of corporate loopholes and others protested because they wanted a $23 billion state education fund attached. Conservatives and Blue Dog Democrats raised concerns about the size of the package and the failure to pay for some of the new spending.

Finally the House decided to scale back the size and the cost of the package by removing COBRA and FMAP. But TANF ECF was left in the package and the bill passed off the House floor and is now over to the Senate for a vote soon to avoid workers losing their unemployment.

For advocates for the CalWORKs program it was bittersweet because extending TANF ECF has been seen as crucial to protecting the CalWORKs program from deep cuts to grants and ending the highly successful subsidized jobs program. Passing TANF ECF would make California eligible for up to $1.1 billion in reimbursements. But not having FMAP pass leaves a $2.2 billion gap unless Congress acts soon to extend FMAP. While national health reform prevents states from reducing eligibility, states can impose co-pays and reduce services.