Schwarzenegger Sworn In, Rescinds Car Tax Increase

Arnold Alois Schwarzenegger took the oath as California’s 38th governor on Monday, vowing to upend the political culture and humble the special interests through decisive action that would amount to the “Miracle of Sacramento.”

The audience of 7,500 invited guests, including thousands standing and watching on big-screen televisions, interrupted Schwarzenegger for applause 24 times during the course of his 12-minute inaugural speech, with the loudest ovation coming when he renewed his promise to roll back the state’s car tax.

Shortly after the 45-minute ceremony on the west steps of the Capitol, the new governor delivered on that promise, issuing Executive Order 1, which repealed the $4-billion increase that had been approved by the man he replaced -- Gray Davis. It was the first of a series of rapid-fire actions meant to draw a clear contrast with a Davis administration renowned for its caution.

Schwarzenegger issued proclamations to convene a trio of special sessions of the Legislature aimed at overturning a new law that allows illegal immigrants to obtain driver’s licenses, cutting workers’ compensation costs and capping state spending. In the sessions, which will begin today, Schwarzenegger hopes that lawmakers will place two measures on the March ballot -- a constitutional amendment that would cap state spending and a bond issue to pay off the deficit accumulated during the last years of the Davis administration.

Schwarzenegger also issued an order suspending 85 packages of regulations still pending from the Davis administration, and called for a review of Davis’ handling of all regulations.

“Makeup, please,” Schwarzenegger said while signing the repeal of the car tax hike in the governor’s Ronald Reagan Conference Room. “Just joking. Very important to know, a friend of mine asked me before I left Los Angeles; he said, ‘Are you going to miss the action in the movies?’ I said, ‘No, I am going to have enough action up in Sacramento.’ Well this is action, not just dialogue, this is action.”

Schwarzenegger took the oath of office at 11:20 a.m., his left hand on a Bible published in 1911 and held by his wife, Maria Shriver. Inaugural officials had incorrectly described the Bible as an 1811 edition that belonged to Schwarzenegger’s family. It actually was an edition that the new governor had purchased shortly after immigrating to the United States.

Shoulders square, he looked steadily at California Chief Justice Ronald M. George as he recited the words that completed the transfer of power from Davis, who was forced from office in a recall campaign that attracted national attention.

After taking the oath, Schwarzenegger quickly walked to his right and shook hands with Davis, who was standing on a section of the stage reserved for Republican and Democratic legislative leaders and former governors Jerry Brown, George Deukmejian and Pete Wilson. California’s only other living former governor, Ronald Reagan, has Alzheimer’s disease and no longer makes public appearances.

The new governor then walked to a podium framed by flags and the California seal, where he delivered a speech in which he cast himself as an avenging populist intent on restoring government to an alienated electorate and protecting “the dream that is California.”

“This election was not about replacing one man; it was not replacing one party,” Schwarzenegger said, looking out over the audience and a multitiered media riser that accommodated hundreds of journalists from all over the world. “It was about changing the entire political climate of our state. Everywhere I went during my campaign, I could feel the public hunger for our elected officials to work together, to work openly and to work for the greater good. The election was the people’s veto for politics as usual.... My administration is not about politics. It is about saving California.”

Delivering the address in the familiar baritone that is a favorite of impressionists, Schwarzenegger struck an inclusive tone. He invoked Reagan, a GOP giant, but also likened himself to Democrat John F. Kennedy -- his wife’s uncle: “In the words of President Kennedy, ‘I am an idealist without illusions.’ ”

Wearing a gray Prada suit, Schwarzenegger, 56, interleaved bits of personal biography with a sober diagnosis of California’s troubles.

“The state of California is in crisis,” he said, reeling off a series of grim descriptions of the state’s condition, some of which his opponents have called inaccurate. “As I’ve said many times, we spent ourselves into the largest budget deficit in the nation. We have the worst credit rating in the nation. We have the highest workers’ compensation costs in the nation. Next year we will have the highest unemployment insurance costs in the nation. And we have the worst business climate in the nation.”

Finding a parallel in his days as a prize-winning bodybuilder sweating over free weights, he said: “What we face may look insurmountable. But I learned something from all those years of training and competing. I learned something from all those years or lifting and training hard when I didn’t think I could lift another ounce of weight. What I learned is that we are always stronger than we know. California is like that too. We are stronger than we know. There’s a massive weight we must lift off our state. Alone, I cannot lift it. But together, we can.”

He said he would commit himself to narrowing the state’s multibillion-dollar budget gap and reviving a weak economy.

“I will not rest until our fiscal house is in order,” he said. “I will not rest until California is a competitive job-creating machine.”

Joining Schwarzenegger on stage were his family: his wife; mother-in-law, Eunice Kennedy Shriver; father-in-law, Sargent Shriver; and his four children -- Katherine, 13; Christina, 12; Patrick, 10; and Christopher, 6. Walking through the Capitol corridors with his family en route to the ceremony, the governor-to-be held hands with Christopher. He told his son to smile.

Later in the afternoon, however, Schwarzenegger struck a more partisan tone as he thanked campaign donors at a California Chamber of Commerce luncheon for 2,000 supporters, held at the Sacramento convention center.

“If you thought the campaign was tough, and that we were in the trenches and we were fighting then, there is much more to come,” Schwarzenegger said. His opponents “are not going to roll over, I can tell you that. We will work together with them; we will be at the table negotiating and all this stuff, but it’s not going to be easy. We’re going to be back in the trenches again, we will be rolling up our sleeves, and I will come back to you for help.”

Schwarzenegger made a pitch for campaign money that would help fund the initiatives he anticipates -- from bond issues to workers’ compensation overhauls. “All of those kinds of reforms we want to put on the ballot,” he told the audience, which consisted largely of business people. “And it will take some pushing. It will take TV spots on there, which of course cost millions of dollars. So I will be coming back to you and saying, open your wallets again.”

Among Democrats, reaction to the inaugural address was guarded. Though many Democrats interviewed Monday praised the speech and the optimistic vision that Schwarzenegger sketched, they said they were wary of his opening day moves.

Assemblyman Mark Ridley-Thomas (D-Los Angeles) said: “An address filled with expressions of wanting to work together and metaphors that point to a California filled with opportunity for all. That kind of symbolism can be embraced by Republicans as well as Democrats. But the rubber hits the road when we begin to talk about executive orders and initiatives to repeal legislation.”

Davis, for his part, praised the speech for its “gesture of bipartisanship.” The former governor added that the speech was “short, optimistic and stayed true to his campaign promises.”

In deference to the tight economy, the inaugural was more subdued than previous affairs. No balls or galas were allowed. Still, the governor attended three well-appointed lunches, with menus heavy on cuisine from his native Austria.

Among those in attendance at a lunch with family and friends at the private Sutter Club were several prominent Austrians, from a champion skier to the former president of the Austrian Senate, Schwarzenegger’s longtime friend Alfred Gerstl.

The new governor also dined in the Capitol Rotunda with federal and state elected officials, where Austrian apple strudel was served for dessert. Officials from Assembly Speaker Herb Wesson (D-Culver City) to state Sen. Tom McClintock (R-Thousand Oaks), who challenged Schwarzenegger in the recall election, warmly greeted the governor.

“I said that I believed that was the finest inaugural address of the six that I have attended and congratulated him,” McClintock said after his exchange with Schwarzenegger. McClintock, however, also voiced opposition to the massive bond measure that is likely to be at the center of Schwarzenegger’s approach to the state’s budget problems.

Ted Costa, the anti-tax activist who drew up the original recall petition and has been critical of Schwarzenegger, praised the new governor for “saying the magic words, that he works for the people.”

Costa was born in Sacramento and has lived much of his life here, but said he had never before attended an inaugural. He did not initially receive an invitation to the invitation-only swearing in, but was told over the weekend that he would get tickets. When he came to the swearing-in headquarters to pick them up, they weren’t there.

Frustrated, Costa decided to attend anyway, using tickets provided by the incoming Assembly minority leader, Kevin McCarthy (R-Bakersfield).

“I didn’t want Arnold to feel slighted,” Costa said.

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Times staff writers Nancy Vogel and Gregg Jones contributed to this report.