CALIFORNIA COMMENTARY : Wilson Has the Upper Hand : Governor has two more years to shape public debate, rally conservatives and tame Democrats.

The rumors of Pete Wilson’s political demise are not only exaggerated but ridiculously premature.

Last week’s election returns produced a spate of articles declaring the embattled Republican governor the big loser, an 0-for-4 hitter who saw the Senator he appointed, the President whose campaign he chaired, the welfare reform initiative he drafted and the legislative gains he predicted all go down to defeat.

But over the next two years, Wilson will have a lot more working in his favor.

Even in the face of a hostile Legislature, the governor has demonstrated the ability to shape the public debate. His welfare reform initiative produced substantial concessions by legislative leaders on the merits. He got the Legislature to establish the new Cabinet-level CAL-EPA. His laser-like focus on workers’ compensation reform (along with pressure from small business) is likely to produce the first real progress in decades. And the report of the Wilson-created Ueberroth commission on business climate issues created the political necessity of a response, a report from Assembly Democrats committing to improving the jobs climate.

It is easy to underestimate the leverage a governor has as a result of his veto power. Wilson is capable of insisting on support for his key proposals from those who expect his signature on their bills. Most members of the Legislature have agendas of their own, and they want legislative accomplishments. Faced with term limits, many will want to work with the Administration in their few remaining years.

And contrary to popular impression, Assembly Speaker Willie Brown takes greater pride in being the statesman--the arbiter among competing factions on important issues--than the partisan fighter provoking deadlock. (He performs both roles masterfully.)

In Wilson’s first two years, the budget has dominated his attention and the outcome has left almost no constituency happy. The looming deficit in next year’s budget presents both the governor and the Legislature with even more painful dilemmas. But Wilson has the upper hand: he took his hit on taxes in 1991, and he knows from last week’s voting that the public is in no mood for more. His “no new taxes” budget will have to be brutal to be balanced, but Legislature Democrats will have to find cuts in other programs--or propose tax increases.

Within the Republican Party, the blame game won’t work. As the dust settles, most people will realize that the recession-driven election outcome was hardly Wilson’s fault. In fact, but for his truly superhuman efforts, it might have been more of a disaster for legislative Republicans. Wilson’s initiative, Proposition 165, drained more money from Democratic sources than from the business community, and he spearheaded fundraising for legislative races.

My prediction is that most of the conservative Republicans in the Assembly will unite behind Wilson because their fates (and perhaps GOP chances of regaining the White House in 1996) depend a lot on his success. Finally, if we needed a reminder of how quickly things change in politics, it occurred this year--when George Bush, Ross Perot and Bill Clinton alternately took decisive national leads in the polls.

In that light, consider the following scenario: California’s economy recovers in 1994, with the sales tax dropping at the end of 1993 as scheduled. The legislative Republicans unify. The legislative Democrats hold out for new or extended taxes, which Wilson stops, and then enact a reasonable package of pro-jobs legislation to be responsive to the voters, for which Wilson shares credit. And Californians begin to appreciate the Perotian toughness the governor has demonstrated in facing up to the grim long-term gap between tax revenues and the demands of programs. If most of this occurs, Wilson could be in amazingly good shape by 1994.