President’s Speech Draws Mixed Reactions in O.C.

Orange County, where a major source of Republican power flows from the corporate offices of a recession-wracked development community, had a lot at stake in President Bush’s State of the Union speech Tuesday night.

And almost with the county’s home builders in mind, Bush aimed some of the most far-reaching proposals in his speech at their industry. “Real estate has led our country out of almost all the tough times we’ve ever had,” the President said.

It was welcome news.

“I was very pleased that the President came forward with a lot of things we’ve been talking about--(relaxing) banking regulations, welfare reform, (reducing) capital gains tax, and credit for first-time home buyers,” said Kathryn Thompson, a Newport Beach developer and one of Bush’s biggest contributors, who caused an uproar last month when she co-hosted a breakfast for Democratic presidential candidate Bill Clinton.

“I think our wake-up call got through to him,” she said. “If it helps my business, it helps other businesses.”

On the other side of the political aisle, Howard Adler, Orange County Democratic party chairman, also is a developer and he agreed that Bush’s proposals will be good for the nation’s builders. But Adler said he was concerned about those on the other end of the economic scale.

“He is trying to help people like me who don’t need the help as much as people who are losing their jobs, or are losing their homes, or their businesses,” Adler said.

Elsewhere, from Orange County’s corporate headquarters to its political strategy rooms and Capitol Hill offices, the President’s speech was praised for its specifics and tone but also criticized as being insufficient or, particularly, for being too late.

Gil Ferguson, a conservative state assemblyman from Newport Beach who has criticized Bush in the past, said Tuesday’s speech was on target and well-delivered. The question, he said, is whether it will help.

“I thought this was the best speech since he accepted the nomination,” Ferguson said. “But all of a sudden, he’s saying, ‘Fire! Fire! Fire!’ Well, the fire has been burning for 18 months. He has to save his presidency and to do that he has to save America--that’s what he has finally understood.”

Even some supporters who want to see the President succeed were skeptical about whether the speech will represent the political launching pad that he needed.

“The question is not whether the speech was good, because of course it was,” said Rep. Christopher Cox (R-Newport Beach). “Rather, (the question is) how successfully the Administration will stand toe to toe with the Congress to make it happen.”

At the Nixon Library in Yorba Linda, more than 300 people packed into a “town-hall style” forum where some of the nation’s top political strategists, college faculty and elected officials--all from Orange County--discussed the speech.

The speech had been billed as the political equivalent of the Super Bowl for Bush. But, said Stuart Spencer, the top strategist for former President Ronald Reagan’s White House campaigns: “I disagree--it wasn’t a political Super Bowl.

“It was an important step, though,” he said. “When we were advising (Reagan) on a State of the Union message, our hopes were always getting out of it without getting hurt. I think George Bush did that tonight, and as a Republican, I feel good about his speech. . . .

Kenneth Khachigian of San Clemente, a former speech writer to Presidents Richard Nixon and Reagan, agreed.

“He (Bush) aimed a cruise missile at the heart of the Capitol dome,” Khachigian said.

Khachigian had this advice for Bush: “Set the Congress up for a confrontation this spring, and perhaps in the fall. I can tell you that virtually all presidential elections are won by combativeness. . . . You have to demonize the enemy.”

In Washington, Cox’s four Republican colleagues in the Orange County delegation were also all in agreement that Bush said the right things Tuesday.

The President’s most ardent supporter was Rep. Robert K. Dornan (R-Garden Grove), who just returned from three days of campaigning for Bush in New Hampshire, which hosts the first-in-the-nation presidential primary on Feb. 18.

“I think (Bush) really sold it,” Dornan said. “As a conservative, I was worried; a lot of conservatives were. But I think conservatives are going to be happy with this. The fight is on.”

The turn-on in the speech for conservatives was Bush’s call to roll back the size of federal government and to strip away anti-growth regulations. They also rallied to the President’s plan to slash taxes on capital gains, restore tax incentives for real estate and other investments, and increase the tax deductions for dependent children.

Rep. Dana Rohrabacher (R-Long Beach) called the speech a “turning point.”

“His speech was filled with substance which is totally parallel to what the conservatives have been asking for,” said Rohrabacher, a frequent critic of Bush who represents northwest Orange County. “There were enormous expectations leading up to this speech and the President met the challenge. . . . He was not seeking amicable relations with Congress. He was laying down a challenge.”

The most cautious endorsement of the President’s message came from Rep. William E. Dannemeyer (R-Fullerton), the only Orange County congressman who has not formally endorsed the President’s bid for reelection. Bush is supporting Dannemeyer’s rival, Sen. John Seymour (R-Calif.), in the fight for the Republican nomination for the U.S. Senate seat vacated last year when Pete Wilson became governor of California.

“I thought it contained some very good things,” Dannemeyer said of the address, highlighting the President’s call for a 90-day moratorium on new federal regulations that could impede economic growth.

Those who criticized the President’s speech came from all corners of the county--industries, universities, Democrats and Republicans.

With the economic devastation already evident in Orange County--like the Irvine Co.’s termination of 60 employees last week--skepticism about Bush’s ability to turn things around had already cost him some support, even among Republicans.

Before the speech, Costa Mesa Republican political consultant Scott Hart said, “Everybody is asking me what time the speech is on (television) and I tell them, ‘Six months too late.’ ”

Roger W. Johnson, the chairman of Western Digital in Irvine and a Republican, said there was only one point in the President’s speech he could “totally support.”

“The best thing he said was, ‘The American people are smarter than all of us in this room,’ ” said Johnson, who co-hosted the renegade GOP breakfast for Democrat Clinton last month.

“My first reaction is that it was a litany of well-crafted political statements aimed at making everybody feel good,” he said. “I didn’t see much leadership there.”

In Irvine, Pat Podlich is another Republican who has fled her party to support Clinton.

“I guess I’m kind of mad at (Bush) because he came on (during the 1988 campaign) like he was going to do something about drugs, and like he was going to be the education president,” she said. “Tonight he said the same thing, but I don’t think there’s been any improvement since he campaigned for those things.”

At the same time some Orange County political and business leaders said the President’s speech was chock full of ideas and specifics, others, like the dean of UC Irvine’s Graduate School of Management, said it was “broad and very vague.”

“I wasn’t super impressed,” said Dean Dennis J. Aigner. “. . . I noticed that his speech was full of gimmicks.”

Aigner predicted that Bush’s proposal to give families a $500 tax deduction per dependent child would not amount to much. “It’s a political gimmick. . . . It’s not a real economic improvement for the overall economy,” he said.

J. Ben Crowell, chief executive of Eldorado Bancorp in Tustin, also said that while the speech called for a moratorium on new anti-growth regulations, he did not address major regulatory problems facing many small businesses or suggest simplifying tax laws for small business owners.

“I can see a battle brewing between Congress and the White House over what they’re willing to do to get this country’s economy growing again,” said Crowell, a Republican. “I’m concerned that they (won’t) get anything much done if they start bickering.”

One of the President’s proposals was a $5,000 tax credit for first-time home buyers. Manuel J. Pena, president of the Minority Business Council of Orange County, said he believes that many minorities would take advantage of it.

Like others, however, Pena, owner of a Santa Ana insurance agency, said Bush’s proposal is too little, too late. “If he’s really concerned about the working-class community, he should have requested from Congress the same items a year ago,” he said.

Times staff writers Robert W. Stewart, Gebe Martinez, Kristina Lindgren, Cristina Lee and Susan Christian contributed to this story.