SACRAMENTO — Not only is the Republican Party at risk of branding itself as the "Party of No," it could take the blame for forcing the state off the economic cliff if GOP legislators remain unmoved by the state's fiscal crisis, observers say.

Despite pleas from their caucus leaders who insisted they got the best deal they could, Republican lawmakers on Monday continued to block an agreement on a $41 billion budget solution, which includes $16 billion in spending cuts, $14.4 billion in tax increases, and $11 billion in borrowing.

"Obviously, Republicans have a great aversion to new taxes, but you're elected to take the circumstances you're handed and find solutions to those circumstances," said Patrick Dorinson, a Republican consultant and former spokesman for the state GOP.

"Sometimes you have to bite the bullet and do what's right. If this thing falls apart, what will happen to our bond rating? How do the financial markets respond?"

Legislative leaders remained one vote shy in the Senate of providing the bare minimum support for a required two-thirds approval of a budget. Three GOP votes are needed in each chamber, but the final vote has remained elusive since Saturday night when Sen. David Cox, R-Roseville, backed away from casting what many had assumed would be the decisive vote.


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The Legislature has remained stalled, as another Republican thought willing to cast the decisive vote, Sen. Abel Maldonado, R-Santa Maria, balked at supporting the tax increases — though he had expressed a willingness to do so a month ago if his leaders could negotiate a spending cap. They did, and also got a huge, permanent tax windfall for businesses — up to $1.5 billion a year; concessions on environmental standards and labor laws; tax credits for small businesses that add jobs; and a $10,000 tax credit for new homebuyers.

Maldonado presented a list of demands that Democrats will likely reject outright: He wants legislation allowing an open primary, and wants legislators to take up his bills to revoke pay and per diem for themselves during budget standoffs, and to prohibit pay raises for legislators when the state is in the red.

That the impasse has focused on one person upon whom the fate of California's economy apparently rests illustrates a larger question: How can a party in such decline — nationally and statewide — be so emboldened to risk a fiscal crisis simply to assert its partisan dogma?

"Their ideology has taken them to a point where they are no longer capable of compromise," said Larry Gerston, a political science professor at San Jose State. "They're marginalizing themselves. They lost three seats in the Assembly, so you would think that would've been a lesson. Nationally, their party is tattered. Increasingly, people will hold Republicans accountable for holding up the state at political gunpoint."

Still, when given the chance to elevate a new leader willing to renegotiate with the Democrats, the 15-member Senate caucus demurred. Senate Minority Leader Dave Cogdill, R-Fresno, offered to resign but no one stepped up to replace him.

Republican party officials say lawmakers are acting responsibly by holding the line against taxes; they complain not enough tax breaks were considered. In addition to the tax cut for multistate and multinational businesses that do business in California, movie production companies would get a modest tax break.

"If tax cuts are good enough for the entertainment industry, they should be good enough for regular taxpayers," said Mike Spence, the president of the California Republican Assembly, an independent group of GOP activists. "All individuals deserve tax relief. That's where our members are coming from."

Republicans are only reflecting their constituencies, said Joel Fox, president of the Small Business Action Committee. He favors the deal because it includes a spending cap, which would limit the amount of spending in good times and hold a reserve for bad times.

"The general public isn't focusing on the spending cap, or tax cuts to businesses," said Fox, who runs the conservative Fox & Hounds Daily blog. "They just know they'll be paying 12 cents more for a gallon of gas. That's what Republican legislators are paying attention to."

But he said Republicans may have overreached by failing to appreciate the gains their leaders made in negotiations during what he called an "opportunity of crisis."

The bad-guy tag may be short-lived, one analyst said.

The klieg lights glaring on the Republican Party will move on to the next subject when a budget is signed, said Dan Schnur, the director of the Jesse Unruh Institute of Politics at the University of Southern California, and a former spokesman for Gov. Pete Wilson.

"There's going to be a budget, and the moment a budget is signed, the process that kept it from passing becomes a lot less relevant," Schnur said.

Reach Steven Harmon at 916-441-2101 or sharmon@bayareanewsgroup.com.