Taxes Take Center Stage in Gov. Debate

Trailing badly in polls, Democrat Phil Angelides on Saturday used the first and only debate of the governor’s race to question Arnold Schwarzenegger’s integrity and try to yoke him to President Bush and embattled Republicans in Congress.

A jocular Schwarzenegger parried with one-liners and invoked major bipartisan agreements with state lawmakers, portraying Angelides as a big-spending liberal who was eager to hike taxes on those who could least afford it.

The issue of taxes, the governor’s preferred ground, dominated the debate. Schwarzenegger mocked state Treasurer Angelides for proposing tax cuts for middle-income families, saying the idea was inconsistent with his support for a $4-billion car-tax hike under former Gov. Gray Davis. Schwarzenegger reeled off billions of dollars in other tax increases that Angelides has supported over the years, including a tractor levy that would have hit “the poor farmers.”

“You have been so far for every single tax increase since you have been in public office,” Schwarzenegger told Angelides.

At one point, smiling across the stage at his rival, the governor taunted: “I can tell by the joy you see in your eyes when you talk about taxes, you just love to increase taxes.... Look out there right now and just say, ‘I love increasing your taxes.’ ”

Angelides told Schwarzenegger he would not allow him to deceive viewers by repeating “what you’ve done in those $35 million of TV ads attacking me.” Then he invoked a trio of Republican leaders, past and present.

“The fact is, when you speak like this you sound just like Newt Gingrich,” Angelides said. “You sound like Speaker Hastert. You sound like George Bush attacking me on taxes.”

While Angelides repeatedly linked Schwarzenegger with Bush and other prominent Republicans, the governor sought to lump his Democratic opponent with Davis, who was defeated in the 2003 recall exactly three years ago Saturday. The result was perhaps the liveliest exchange of the evening.

“During the most incredible decline of our economy, just a few years ago, you were part of that,” Schwarzenegger said.

“Well, you know, your policies are the Bush policies, and I prefer [former President] Clinton to Bush any day,” Angelides shot back.

“No, no, don’t talk about Bush, because if you want to do that, go to Iowa,” Schwarzenegger said, alluding to the site of the first presidential nominating contest.

“You went to Ohio, governor; I didn’t,” Angelides said, referring to Schwarzenegger’s appearance alongside Bush late in the 2004 campaign. “You stood with President Bush and you helped him get reelected. And we didn’t even get a T-shirt!”

The two then talked past each other for several seconds, the governor suggesting that Angelides was ready “to promise the people everything, and then increase the taxes.”

“No, I’ve been clear, governor,” Angelides retorted, “I’m going to close those corporate tax loopholes.”

“Oh, sure. Of course,” Schwarzenegger said, laughing sarcastically. “Very good. Exactly, yeah.”

At various times Angelides sought to turn the tax issue on his opponent, reminding viewers that college and university fees had risen under Schwarzenegger. The governor, in turn, recalled student protests against similar moves by Davis.

“They marched in Sacramento, right by your office, treasurer,” Schwarzenegger said, squinting his eyes at his opponent. “You were inside that office, and you looked out, and you didn’t join them protesting.... Where were you?”

Angelides has proposed raising taxes by $5 billion a year for corporations and Californians who make more than $250,000 a year. In August, he offset that proposal with a plan for $1.4 billion in tax cuts, mainly for middle-income Californians and small businesses.

But over the years, Angelides has called for a variety of other tax increases that he no longer supports, and Schwarzenegger puts the total cost of them at more than $18 billion a year.

The joint appearance at Sacramento State University offered a crucial opportunity for Angelides to improve his standing in a contest that so far has tilted heavily in the Republican governor’s favor. But with no moment of high drama or surprising revelations, the 55-minute session appeared unlikely to change the central dynamics of the race, now in its final weeks.

The two candidates, wearing similar dark suits, sat facing each other at separate tables, with the moderator, Stan Statham of the California Broadcasters Assn., seated between them.

Showing what he learned in Hollywood, the governor was careful to look directly into the camera as he spoke. Angelides spent much of his time addressing the studio audience, presenting a less flattering profile for the majority of those watching at home on television.

The debate, sponsored by the broadcasters association, was aired live on radio and television stations statewide. But the timing -- a Saturday night, opposite major league baseball playoffs and college football -- limited the size of the audience.

Angelides had hoped to debate Schwarzenegger as many as 10 times, but the governor had nothing to gain by offering his challenger such high-profile exposure on television and declined all other offers. As a result, the debate’s terms were essentially the governor’s. Statham, a former Republican assemblyman, is a registered lobbyist for the broadcasters.

Schwarzenegger, as the front-runner, spent much of the evening avoiding confrontation, allowing many of Angelides’ accusations to go unanswered and breaking the tension with several apparently well-rehearsed quips.

In keeping with his political move to the middle, Schwarzenegger also stressed the bipartisan approach he has taken this year to working with the Democrats, who control the Legislature, on issues such as the infrastructure bonds on the November ballot.

Asked which decision in public office he most regrets, Schwarzenegger cited last year’s disastrous special election, in which voters overwhelming rejected his four initiatives after he went over the heads of lawmakers.

“I pushed too fast,” he said, again sounding the note of contrition he struck in the days after the debacle. “I did not bring all the legislators on board. I did not bring people together enough.

“The people sent a message loud and clear,” he added. “And that message was, ‘Don’t come to us for every little thing. Go to the legislators. You guys work it out.’ And that’s exactly what we’ve done since then.”

Angelides responded that it was not a good idea “to attack working men and women” and cut school money, as he characterized Schwarzenegger’s past efforts. “The one thing I want to say tonight is: Who can you trust next year to do the right thing? For three years, Arnold Schwarzenegger was very consistent. Only in the last 60 days, as he sought to save his own job, has he tried to move to the middle, so to speak.”

At another point, Angelides returned to that theme, saying the election “comes back to who can you really trust?”

Given one chance to question each other directly, Schwarzenegger opted for a gentle approach, asking Angelides about the funniest moment he had experienced during the campaign.

“Every day is just a hoot -- I can’t tell you how much fun,” Angelides joked. More seriously, Angelides expressed joy at the time he has spent with his family.

He then hit back hard, asking Schwarzenegger how he could justify a proposal -- eventually withdrawn -- that could have endangered the benefits of police widows and orphans.

The governor responded with his sharpest rejoinder of the evening: “I did not try to take anything away from any police officer or firefighter.... I will never take away the pension, or the disability or the death benefit from anyone, the firefighters, the police officers or anyone else as far as that goes. So you can stop that hype right there.”

But more often, when things grew tense, Schwarzenegger tried to lighten the mood with a smile and clever aside.

After Angelides assailed his record on protecting the state from terrorism and criticized his treatment of the state’s law enforcement officers, the governor drew a big laugh from the studio crowd -- and a smile from Angelides -- by suggesting, “I feel a little like I’m having Thanksgiving dinner with Uncle Teddy.”

“Thank you so much,” Angelides replied, delighted to be compared to U.S. Sen. Edward M. Kennedy (D-Mass.), the uncle of Schwarzenegger’s wife, Maria Shriver.

michael.finnegan@latimes.com

mark.barabak@latimes.com