The economy is nose-diving. Unemployment rages. A yawning budget hole looms. In these gloomy times, statehouse Republicans see a chance to spur California renewal by refighting a few past defeats.

GOP lawmakers have tugged old battles over workplace rules and the environment into the historic winter budget talks now underway in the Capitol. From the position of the majority Democrats, who need at least a few Republican votes to pass a spending plan, it pays to listen.

Back on the table are some of the most hard-fought policy issues of recent years, won by Democrats and Republican Gov. Arnold Schwarzenegger: labor rules on overtime pay and work breaks, plans to clean up the dirtiest diesel construction equipment and California’s curbs on greenhouse gases.

Although such policies are not directly connected to the state budget, Republican lawmakers say they are germane to the economic downturn that has depleted tax revenue and helped open California’s gaping budget deficit. Delaying or rolling them back, GOP lawmakers argue, will spark a recovery, create jobs and refill state coffers.


“If we can do things that can help the economy, that should be part of the discussion,” said Assemblyman Roger Niello (R-Fair Oaks). “We need to get shovels in the ground and paychecks in pockets.”

The state’s requirement that budgets be approved by two-thirds of the Legislature gives the minority Republicans leverage. But political experts say the stakes are unusually high in the current budget talks, which are taking place half a year early because of the precipitous decline in tax receipts.

Republican leaders are grudgingly coming around to the Democrats’ position -- and the governor’s -- that taxes need to be raised. In exchange, they will need to score some victories on issues from the GOP playbook.

“The quid pro quo in this,” said Barbara O’Connor, a Sacramento State University political communications professor, “is the Republicans need some things they can sell to their constituency.”


Among the labor rules GOP negotiators are attempting to change are break and lunch-hour requirements, which they say can prove nettlesome for restaurant owners trying to staff tables during a lunch or dinner rush. In addition, they are looking to curtail overtime requirements for the eight-hour workday to give businesses more flexibility in scheduling.

“One man’s provisions to protect labor can be another man’s imposition on business,” said Niello, vice chairman of the Assembly budget committee.

Republicans are also looking to delay or change diesel regulations for big construction equipment, which currently call for an 85% reduction in pollution by 2020.

Construction industry officials say the new rules can be delayed because California’s fiscal doldrums have caused a 20% decline in construction activity and a 41% drop in diesel fuel consumption. As a result of that downturn, they say, the state is already meeting or exceeding the environmental mandates.


Other GOP proposals on the table include exempting several road projects from the state’s environmental review process, setting up an ad hoc committee of governor-appointed agency chiefs with veto power over environmental requirements hindering some of the state’s more contentious projects and easing regulations meant to reduce air hazards caused by pesticide use.

The Republican push has labor leaders and environmentalists crying foul.

Art Pulaski, executive secretary-treasurer of the California Labor Federation AFL-CIO, accused the Republicans of engaging in “blackmail of the budget process” by tussling anew over labor rules that in some cases date back a century.

Labor leaders are countering with threats of payback. At a news conference late in the week, Pulaski and others vowed to mount election challenges or even fund recall attempts against lawmakers who vote to weaken workplace rules.


“They’re trying to take us backward,” said Ann Notthoff of the Natural Resources Defense Council. “They’re trying to revive the worn-out debate of economy versus environment. It’s the losing side trying to undo the outcome of policy fights that have already been settled.”

“We feel a stronger sense of crisis around this budget than any in years,” said Notthoff. “Everything is in jeopardy.”

O’Connor said all sides in the talks “are going to have to give up stuff they don’t want to give up.” Meanwhile, she said, the general public is finding it hard to understand why Republicans and Democrats can’t sit down, hash it out and “come up with the best bad solution.”

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eric.bailey@latimes.com

Times staff writer Patrick McGreevy contributed to this report.