Governor Appears to Be Going Gray

A solid majority of California voters booted Gov. Gray Davis because they were fed up with Sacramento politics as usual. His replacement, Arnold Schwarzenegger, talked in his swearing-in address of “changing the entire political climate of our state.” But so far, it seems the more things change, the more they stay the same.

Voters believed that Davis was in thrall to special interests because he was always raising money from them. That perception helped determine his fate in the recall election. Decrying Davis’ “pay to play” approach to policy, Schwarzenegger promised to shun special-interest campaign contributions. “I don’t need to take money from anyone,” he said when he announced his candidacy. “I have plenty of money myself.”

Schwarzenegger also proposed to ban “all fundraising by the Legislature and the governor from the day I propose a budget until I sign a budget certified by the state controller to be in balance.”

During the campaign, however, Schwarzenegger racked up more than $12 million in contributions, many from special interests. Since his victory in the October election, he has raised about $2 million more, principally from real estate developers, auto dealers, technology interests and donors with business in the Capitol. According to Bob Stern, president of the Center for Governmental Studies, “[Schwarzenegger] ran on a platform saying he was going to be different from Gray Davis, and here he’s doing some of the same things Davis did [in] fundraising.” Even as Schwarzenegger and the Legislature were wrestling with California’s budget predicament, the new governor had several fundraisers scheduled.

Candidate Schwarzenegger criticized Sacramento for borrowing billions of dollars to balance the budget. Republicans excoriated Davis and Democratic lawmakers for approving nearly $11 billion in deficit bonds without a vote of the people. After his election, Schwarzenegger said, “I think the people should make that decision, the bond issue and all that.... I think we need to do it the right way, the legal way.”

Yet, when the Legislature initially balked at putting the new governor’s $15-billion bond proposal on the March 2 ballot, Schwarzenegger quietly embraced the plan that he criticized as a fallback position.

In the glow of his victory, Schwarzenegger also promised to reach out to the Democratic majorities in the Assembly and Senate. He told reporters, “There is much that we can do here [in Sacramento] if we don’t take a negative approach and say, “Oh, [those] ones are the villains, and they are the good ones.”

Davis failed miserably when it came to wooing lawmakers. Remember the former governor’s ill-considered pronouncement, early in his first term, that “it is the job of the Legislature to implement my vision”? Such arrogance helped stymie Davis’ policy goals.

Now, Schwarzenegger appears ready to take Davis’ attitude one step further. After Schwarzenegger’s first budget defeat, his communications director, Rob Stutzman, said, “The governor does not need to beg the legislators who created this problem for anything.”

Earlier, Schwarzenegger had complained on talk radio about legislative opposition to his budget proposals. He’d promised “severe casualties” in next year’s elections if lawmakers didn’t come around to his way of thinking. But knocked by Republicans, Democrats and some in the media for deserting his pledge to forgo the nasty partisanship that had paralyzed the Capitol, Schwarzenegger backed off his tough rhetoric and invited legislators, regardless of party, to join him at rallies in their districts to mobilize public support for his budget plan. He’s also mounted a charm offensive aimed at lawmakers of both parties, as he plays the dual roles of “good cop” and “bad cop.” In getting his deficit-reduction bond issue and spending cap through the Legislature, Schwarzenegger, despite some rough edges, proved more adept than Davis at negotiating with opposition-party legislators.

If Schwarzenegger the bad cop carries through with his threat to circumvent the Legislature and take his agenda directly to the people, on such issues as workers’ compensation, through the initiative process, who would fund the big-ticket campaigns to pass the measures? Economic and social interests have long chipped in to help friendly politicians navigate the initiative process. The governor’s remarks to members of the California Chamber of Commerce on the day he was sworn in indicated that things aren’t likely to change. “I will be coming back to you,” he announced, “and say: Open up your wallets again” to help pay for initiative campaigns.

It’s highly ironic that the governor is toying with suspending one initiative as he’s flirting with launching up to a half-dozen new ones to deal with the budget crisis. Proposition 98 was passed in 1988 to protect education funding, and Schwarzenegger pledged that money for schools would be cut “over my dead body” during his campaign. But just as Davis did in his last two years, Schwarzenegger is looking at the possibility of delaying school payments mandated by Proposition 98, with a promise of repayment later.

After one month in office, Schwarzenegger faces the same seemingly intractable problems that defeated Davis. Money is still the “mother’s milk of politics.” Partisan conflict, safe legislative districts, closed primaries and term limits make governance nearly impossible. As did Davis, Schwarzenegger must negotiate with the opposition party while keeping his own troops in line. The compromise deal to put the bond and spending cap on the ballot won’t solve the budget’s structural imbalance.

In dealing with that, Schwarzenegger’s choices will echo Davis’. He can raise taxes and alienate Republicans, cut programs and anger Democrats and/or use borrowing to paper over current shortfalls and defer the economic and political pain. (And borrowing just got more expensive after Moody’s downgraded California debt to the lowest level in the state’s history.)

So, the governor’s name has changed, but the arithmetic hasn’t. And that will bear heavily on Schwarzenegger’s ability to rescue California.

There is one important difference between Davis and Schwarzenegger -- personal style. Davis was perceived as cold, aloof, arrogant; he was unable or unwilling to connect with voters or legislators. Although Schwarzenegger has shown flashes of arrogance worthy of an oversized ego, he possesses the communication skills necessary to galvanize public support.

The new governor, observed former state Treasurer Matt Fong, “has a public persona that gives him power that very few people have.” That counts for something to an electorate hungering for strong leadership -- something Californians saw as sorely lacking in Davis.

But is that enough to bring California back? If it isn’t, what does Schwarzenegger do then?