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Newsom’s ‘bold’ plans on drug costs, labor, and homelessness backfire

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He’s got two years left in his governorship, and all of his recent political positions and acts point to him eyeing a 2028 presidential run. But a closer look at his track record shows a charismatic but deeply flawed leader who has a history of overpromising and underdelivering. 

Gov. Gavin Newsom (D-CA) stands at a press conference at Raleigh Studios unveiling a vast expansion of California’s Film and Television Credit Program on Oct. 27, 2024, in Los Angeles. (Mario Tama/Getty Images)

“When you’re a handsome, articulate governor of California, a lot of people around you say you should run for president,” John Pitney Jr., professor of government at Claremont McKenna College in Claremont, California, told the Washington Examiner. “He’s one of those guys that are on people’s short list for president because they don’t think about it too much. When you’re familiar with his record, he doesn’t look like that great of a candidate. And unfortunately for Newsom, he’s going to have to answer for conditions in the state.”

Pitney, who was deputy director of research at the Republican National Committee 34 years ago, said Newsom’s got to start making good promises he’s made or else their failures will haunt him should he make a White House run. 

“Would-be presidents have only small windows of opportunity and he will be just two years out of his governorship in 2028,” Pitney said. “Another four years and he’ll just be a trivia question.” 

GOP megadonor Hal Lambert also called out Newsom, claiming his shortcomings are hurting Californians. 

“Newsom is the face of big government incompetence,” Lambert told the Washington Examiner. “He makes promises without any experience or understanding of how different industries operate and doesn’t really care. It’s only to sound good in front of a teleprompter and ultimately to win an election. The communities and taxpayers are left to pick up the pieces.” 

Others, like Darry Sragow, a longtime California Democratic political strategist, are more forgiving. 

Sragow said that Newsom’s initiatives are well intended and “more aspirational” in nature but admitted that repeatedly missing goals wasn’t a good look for the outgoing governor and could be construed as weakness by political adversaries.  

NEWSOM SAYS TRANSGENDER ATHLETES IN WOMEN’S SPORTS IS ‘DEEPLY UNFAIR’ IN SPLIT FROM DEMOCRATS

The Washington Examiner has taken a look at three promises Newsom has failed to deliver on. They include reducing homelessness, which has gotten worse under his watch; a first-in-the-nation fast-food council that was supposed to set work rules for an industry that boasts more than half a million workers in California but ended up slashing jobs; and a commitment that the state would manufacture its own low-cost insulin in an effort to prevent big pharma from jacking up prices on the life-saving drug. 

California Senate Minority Leader Brian Jones, a Republican, told the Washington Examiner almost everything Newsom touches underperforms.

“His fast-food council led to higher prices and job losses, and despite billions spent, homelessness has only worsened,” Jones said. “He made a big media splash during COVID by promising $30 insulin, yet years later, there’s no delivery, and now he’s dodging questions. As he eyes the White House, Americans see through his charade. Voters deserve accountability, not empty promises — especially from someone seeking the highest office in the country.”

$30 insulin promise evaporates

Newsom’s first executive order back in 2019 called for the state to lower prescription drug costs, which led to the creation of CalRx.

CalRx, which was established by the state legislature in 2020 and supported by Newsom, is supposed to develop, produce, and sell generic drugs at low prices to Californians. If it worked as intended, it would effectively disrupt the drug market industry, which has been dominated by large pharmaceutical companies. CalRx would not only increase affordability to lifesaving drugs but also accessibility. 

Two years ago, Newsom announced that CalRx would make its own biosimilar insulin, which he said would be available in 2024 for more than 3.5 million Californians living with diabetes. It’s nowhere close to happening. 

Earlier this month, Elizabeth Landsburg, access and information director at the state Department of Health Care, told state lawmakers at a hearing that they are still waiting to begin clinical trials. After the clinical trials, the state can apply for Food and Drug Administration approval, which could take more than a year. There was no timetable for when they could start nor when the state’s insulin would be for sale. 

“I wish I could sit here today and say we have a date certain,” Lansberg said. 

The American Diabetes Association said the delay is hurting diabetics who need low-cost options. 

“We are more than a year behind schedule with no end in sight,” Christine Fallabel, regional director for government affairs for the association, said during the Senate oversight hearing on the initiative. 

She added that Californians could be waiting until 2030 to get their hands on the drug. 

What’s worse is that in 2023 Newsom vetoed a bill that would have stopped insurance companies from charging more than $35 for a 30-day supply of insulin. 

“With CalRx, we are getting at the underlying cost, which is the true sustainable solution to high-cost pharmaceuticals,” Newsom wrote, explaining why he vetoed the bill. “With copay caps, however, the long-term costs are still passed down to consumers through higher premiums from health plans.”

THE CASE AGAINST GAVIN NEWSOM

State Sen. Scott Wiener, a Democrat from San Francisco who sponsored the bill Newsom vetoed, called the governor’s actions “a major setback that will keep tens of thousands of diabetic Californians trapped in the terrible choice between buying insulin and buying food.” 

Wiener has resurrected his bill this session though it’s unclear if Newsom will again use his veto power. 

California has a $50 million contract with the nonprofit pharmaceutical company Civica Rx to manufacture the state’s insulin under CalRx. The state would sell a 10-milliliter vial of insulin for $30. 

Sragow, the beneficiary of a cap on insulin prices through Medicare ($35), told the Washington Examiner that even though CalRx does not have its insulin on the market, the intended effect, to lower prices, has already taken place. Other pharmaceutical companies have lowered their prices in anticipation of competition, he said. 

“You could argue that the governor might be well served to temper his language when he talks about setting these goals but I think the fact is that he knows perfectly well, as does anybody who works in the political world, that you don’t just flip a switch and make things work automatically,” he said. “Rarely does a governor have that kind of power. It takes time, but my experience has been that oftentimes he sets his sights high and things happen over time.” 

Fast-food council slow to make moves

Newsom signed a law two years ago that raised the minimum wage for fast-food workers to $20, the highest in the nation, and created a nine-member fast-food council made up of workers, union representatives, and business owners. 

“Today’s action gives hard-working fast-food workers a stronger voice and seat at the table to set fair wages and critical health and safety standards across the country,” Newsom said in a statement. 

The council met last March, but since then, little has been done to help the state’s 500,000 fast-food workers. In fact, the council spends most of its time deciding on what to talk about during its next council meeting. 

The council had two marathon meetings in January and February in which they heard hours of grievances from workers and their allies as well as restaurant owners about another raise.

The group will dedicate its next meeting, which has yet to be scheduled, to discuss the matter again.   

Nick Hardeman, a Democrat from Sacramento who had previously served as chief of staff to state Senate President Pro Tempore Emeritus Toni Atkins, is the food council’s chairman. Newsom appointed him to be the sole “public” member of the council who is neither affiliated with the food industry nor labor. 

Hardeman seems to think things are going well and likened the pace as starting a new department from scratch.

“Putting together the groundwork so that we would be able to move toward substantive conversations on policy took a lot of time,” Hardeman told CalMatters. “It is hard to come to decisions. And there’s a lot of people who are coming from two completely different sets of life experiences when we’re talking about issues, and you see that play out in every single meeting.”

Unfortunately, one of the unintended consequences of a wage hike has been a slash in jobs. Between September 2023 and June 2024, 6,166 fast-food jobs in the state were eliminated, according to the Employment Policies Institute, which released its report in December. 

Edgeworth Economics took a look at the whole year since the law was signed (between September 2023-2024) and found there had been at least 9,600 job losses. 

“The $20 minimum wage harms California’s least experienced workers by causing them to be more expensive, but no more productive, for limited-service restaurants that have traditionally hired young and inexperienced workers,” Stephen G. Bronars, an economist with Edgeworth Economics, said. “Limited-service restaurants will replace employees with kiosks as businesses adapt to the higher minimum wage.”

Betting big on housing and homelessness

Photo taken near homeless encampment in Oakland, California, on March 7, 2024. (Barnini Chakraborty/Washington Examiner)

Visitors and residents alike can see California has a homelessness problem. In fact, it keeps getting worse. 

Since becoming governor, Newsom has spent more than $24 billion on homelessness only to see it increase. There are now 30,000 more homeless people in California (181,000 total) under his watch than before he became governor. 

“Homelessness is a huge problem,” Pitney told the Washington Examiner. “We are simply not building housing that is commensurate with demand.” 

When Newsom ran for governor in 2017, he pledged a wave of homebuilding to bridge the gap between the growing population and the housing crisis. 

“As Governor, I will lead the effort to develop the 3.5 million new housing units we need by 2025 because our solutions must be as bold as the problem is big,” Newsom wrote on Medium.

It was a bold goal – and one that was totally out of reach. Meeting his goal would have meant building an average of 500,000 homes a year in a state that has only hit the 300,000 mark twice in 50 years. 

Newsom also talked a big game when it came to curbing homelessness but when called out on his lack of progress has been quick to shift blame to cities and towns, dragging them for not getting more done.

Last year, the state’s auditor, Grant Parks, slammed Newsom’s Interagency Council on Homelessness for failing to track how billions of taxpayer funds were spent on various programs and faulted the council for failing to identify which programs were effective. 

Homeless experts say it’s almost impossible for Newsom, at the state level, to make a dent in the problem but that hasn’t stopped the governor from trying to get a win wherever he can.

“It’s a local problem,” Sragow, who was asked to put together a series of focus groups in Los Angeles back in 2019 to probe attitudes about homelessness, said. “[Newsom] can help with funding so that local governments have more resources to put into addressing homelessness and set statewide standards and put pursestrings around that money so that local governments who want that money need to address certain policies.

“But when he talks in broad terms, about fixing homelessness, I’m sure he wishes he had that ability but he just doesn’t.”



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