Wilson Warns of Health, Welfare Cuts : Budget: Governor tells group of moderate Republicans that ‘painful’ round of spending reductions may also hit education. ‘We cannot go on living in a fool’s paradise,’ he says.

Declaring that California cannot go on living “in a fool’s paradise,” Gov. Pete Wilson told fellow Republicans on Saturday that the state faces a new round of painful budget cuts that will hit most harshly in the areas of health and welfare.

Education also may face the budget knife as the recession inflates the state budget deficit, now estimated to be about $3 billion, Wilson said in an address to the California Republican League.

Wilson and the Democrats who control the California Legislature this year negotiated a budget that eliminated a projected $14-billion deficit by raising some taxes and reducing spending. But the deficit keeps growing and now additional taxes are no longer an option, Wilson said.

“This year, we are going to have to do it by cuts and they are going to be painful,” he said. “There are going to be things which I will be doing that you will hate having me do.”

Health, welfare and education account for 85% of state spending and thus must take the brunt of the cuts, the governor said. In a meeting with reporters after his address, Wilson declined to be more specific, but he noted that education was the only area that escaped the fiscal scalpel this year.

In his speech, the governor was optimistic about Republican chances of winning both U.S. Senate seats in the 1992 election and possibly gaining majorities in the Legislature and among California’s U.S. House delegation, which has been expanded to 52 members by post-census reapportionment.

Asked later if he thought the combination of bad economic news and cuts in state services would hurt the GOP at the polls, he said: “I think that it makes it tough for everybody.”

Wilson added that “it is time we were honest. We are spending more than we can afford.”

In his talk to about 300 Republicans who consider themselves moderates and progressives, Wilson said: “We cannot go on living in a fool’s paradise. I am not going to sugarcoat the truth. I’m going to be compelled to give the grim facts.”

Grim as he was, Wilson received an enthusiastic reception at the annual Lincoln Conference of the California Republican League, a volunteer GOP association supporting moderate candidates and issues.

The governor was introduced to standing applause and chants of “Pete, Pete, Pete.”

Afterward, delegates cheered as Assemblyman William J. Filante of Greenbrae referred to Wilson as “a governor with the guts to face reality.”

The scene was a marked contrast to the state Republican convention in Anaheim two months ago, when Wilson was tarred and feathered in effigy by young conservatives. Also in Anaheim, Wilson’s handpicked successor to the U.S. Senate, John Seymour, was jeered by conservatives who stalked from the convention hall when Seymour was introduced to speak.

The California Republican League, virtually moribund during the administrations of Ronald Reagan and George Deukmejian, has enjoyed a resurgence with Wilson’s election as governor and his decision to support GOP moderates for election to the Legislature.

In his speech, Wilson took a thinly veiled swipe at conservative Republicans in the Assembly who refused to support his budget-balancing tax increases, lumping them in with Democrats who balked at deeper program cuts.

“I get a little tired of being trashed by people who couldn’t find it in their hearts to vote for tax increases (and) couldn’t find it in their guts to vote for spending cuts,” he said.

“And I lost my temper once or twice and I said to those of my colleagues: ‘If you can’t vote for cuts and if you can’t vote for tax increases, what in the hell are you doing here? You’re irrelevant.’ ”

Also addressing the conference was Rep. Tom Campbell of Stanford, who is running for the full six-year Senate term being relinquished by Democrat Alan Cranston. Campbell distinguished himself, and fellow Republican League members, from “cause” conservatives on issues of abortion, civil rights, school prayer and the environment.

“We care about the individual,” he said. “We want freedom for individuals.” The audience gave Campbell its most vigorous applause when he added: “I’m pro-choice (on abortion), but I won’t give up the title ‘conservative.’ ”

Conservative television commentator Bruce Herschensohn and Palm Springs Mayor Sonny Bono are Campbell’s major opponents in the June primary.