Gov. Arnold Schwarzenegger called his first budget proposal in 2004 a "workout plan" for state government. He recommended slimming the state payroll by about 300 jobs. He wanted to cap enrollment in health programs for children. He suggested cutting the state's contribution to employee pensions. Schwarzenegger said the state couldn't solve its financial problems without reining in health and social services that were growing far faster than state revenues. Later that year, he commissioned the California Performance Review, which listed dozens of ways state operations could become cheaper and more efficient. But three weeks ago, when he released his $125.6...