A Dose of Reality for Schwarzenegger

Times Staff Writers

SACRAMENTO -- Gov. Arnold Schwarzenegger's ambitious legislative agenda bumped into political reality on Wednesday as Senate Democrats thwarted a quick repeal of a law that would give driver's licenses to illegal immigrants and Republicans raised concerns over his proposal to borrow up to $15 billion to address a projected budget gap.

In the Assembly, meanwhile, Schwarzenegger's finance director, Donna Arduin, abruptly walked out of a Budget Committee hearing as Democratic lawmakers began asking tough questions.

In a Tuesday news conference, Schwarzenegger had demanded quick action on his legislative agenda. But lawmakers in both parties on Wednesday flexed their muscles in ways that suggested Schwarzenegger would need patience in the pursuit of his legislative goals.

During the day's brief Senate special session, President Pro Tem John Burton (D-San Francisco) delayed action on the controversial driver's license law by assigning a bill written by Republicans to repeal the measure to the Transportation Committee for debate.

When it passed in September, the legislation received no Republican votes.

State Sen. Rico Oller (R-San Andreas), the repeal bill's author, took the Senate floor to gently prod Burton on the timetable.

But, in contrast with Tuesday's bitter Assembly back-and-forth over Republican attempts to repeal the law, Burton headed off a confrontation and said a hearing on the bill would probably be held early next week.

In interviews later, Senate Republicans accused Burton of delaying a vote on the bill.

"I think he's trying to drag it out," said Sen. Richard Ackerman (R-Irvine). "I think there are enough votes to undo it, but they don't want to have a vote on it."

"We think the issues have been discussed over three years," said Senate Minority Leader Jim Brulte (R-Rancho Cucamonga). "I would have preferred that we took it up ... but Sen. Burton assures me we will take it up in a 'timely manner.' "

Meanwhile, activists introduced Schwarzenegger to the sort of pressure tactics he will face on a number of fronts as he attempts to make good on his promise to "clean house" in Sacramento.

About 100 protesters, including about 50 who had driven all night from Los Angeles, gathered outside the governor's office and demanded a meeting to express their concerns over throwing out the driver's license law. After tense negotiations between the demonstrators and the governor's security detail, a small group was granted a meeting with two Schwarzenegger representatives.

"They listened, but they made no commitments at all," said Father Richard Estrada of Los Angeles, one of the protesters in the meeting.

At the same time that Democrats were at least temporarily denying Schwarzenegger a victory on one of his prominent campaign promises, the governor faced concerns from fellow Republicans over his plan to deal with California's fiscal difficulties without a tax increase.

Some Democrats questioned whether Schwarzenegger would be able to get the votes for the $15 billion in so-called deficit bond borrowing over as many as 20 years.

Schwarzenegger needs 27 Senate votes to achieve the two-thirds majority required for passage. There are 15 Republicans and 25 Democrats.

Schwarzenegger has repeatedly said that, if lawmakers failed to act on his proposals, he would appeal directly to voters though ballot initiatives.

Brulte said he expected the borrowing proposal to pass the Senate eventually. But Sen. Tom McClintock (R-Thousand Oaks) said he would vote against it, and other Republicans interviewed Wednesday echoed concerns already raised by Burton and other Democrats.

Some GOP senators said spending cuts should be the governor's first priority as he attempts to address a projected $14-billion gap between state spending and revenue next year.

"I think it's fiscally irresponsible to use long-term, general obligation bonds to meet state expenses," McClintock said after the Senate session. "That is why, for over 100 years, the state Constitution has prohibited that practice -- to prevent a prodigal generation from running up a huge debt while it parties, then passing the bill on to his children."

He added, "A deficit bond will not have my vote."

McClintock gained a national following among conservatives as a candidate for governor during the recall campaign, which could give his views a wide hearing in upcoming debates over the budget.

Brulte said the key to Schwarzenegger's fiscal recovery plan was a cap on state spending, a central Republican demand.

"If the price I have to pay for a spending cap is a willingness to support a deficit bond, I'm willing to look at that," Brulte said. "But our prime objective is the spending cap."

Oller said he had not taken a position on the proposal, but "in general I don't like the idea of borrowing money for a purpose that isn't specific to a construction project or some particular thing. But this is an extraordinary circumstance. This is going to have to be weighed in my mind."

Sen. Chuck Poochigian (R-Fresno) also expressed misgivings, but said Schwarzenegger had "inherited a massive problem."

"There's no one who's enthusiastic about borrowing," Poochigian said. "The question is, what can we do to solve our problems? I have not yet made a decision on what I'm going to do. A vote on the proposal would be very difficult."

The Senate will begin discussions on Schwarzenegger's fiscal proposals with a budget committee meeting at 11 a.m. today.

During his Tuesday news conference, Burton pledged timely consideration of Schwarzenegger's proposals. He told Senate members during Wednesday's session to scrap any plans for extended Thanksgiving vacations and to be prepared to work until midday or later on the Wednesday before the holiday.

Sen. Bruce McPherson (R-Santa Cruz) said he would probably vote for the deficit bond, but with reservations. "I think it's a preferable way to go, versus huge tax increases," he said. "I don't like either one of them, but it's the better of the two."

Ackerman said he didn't know whether he would vote for the Schwarzenegger proposal and would first like to see the results of an audit of state spending promised by the new governor.

"We'd like to see the total results of the audit and look at all possible cuts before we go anywhere," Ackerman said. "We want to try and minimize the borrowing and the term of the borrowing."

Senate Republicans were poised to deliver a package of cuts to Arduin -- the governor's finance director -- by today, Ackerman said.

In her debut before a key Assembly committee Wednesday, Arduin gave only general testimony about California's budget problems. She walked out abruptly with one member still in the midst of asking her a question.

"You're leaving us?" a surprised Assemblywoman Jackie Goldberg (D-Los Angeles) asked.

Arduin said her deputy was taking over the presentation. A spokesman later explained that she had an appointment with Schwarzenegger, and the Assembly Budget Committee had already kept her waiting for more than an hour as other witnesses testified.

"On the third day of a new administration, this is one governor I would not want to keep waiting," said Department of Finance spokesman H.D. Palmer.

While most Democrats gave Arduin a pass on the breach of protocol, chalking it up to nervousness, fatigue or her cold, the departure was an inauspicious start to a day in which Assembly lawmakers had hoped to gather more details on Schwarzenegger's proposals.

"It made me think she didn't want to be there," Goldberg said of Arduin's exit, which the legislator described as "no big deal...."

"The big deal," Goldberg said, "was her presentation."

"They want us to act quickly, but they aren't giving us any information about what they want us to do," Goldberg said. "I don't mind if they say, 'This is a complicated mess. It's going to take us a while to figure it out. We'll come back to you in January.' ... But don't come in and jam me that it's 'action, action, action, action' and not have anything in writing what you're suggesting to us."

Democrats also pointed out that, if Schwarzenegger made good on his promise not to reduce education spending, closing the budget gap would require cutting every other state program by more than 25%.

Arduin had declined to offer any details about what cuts the administration was considering. She said details would be in the proposal that Schwarzenegger is required to present in January.

The only cut the administration has proposed so far is freezing cost-of-living adjustments for welfare recipients, which would save about $222 million by mid-2005.

Republicans quickly came to the defense of the administration. Outside the hearing, they reminded reporters that Schwarzenegger had been in office only three days.

Assembly Budget Committee Vice Chairman Rick Keene (R-Chico) said it would be unrealistic to expect the administration to have its entire budget proposal ready to go. He said Arduin had had no choice but to present the bond and spending cap ideas first, because those need to be quickly approved to appear on the March ballot.

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Times staff writers Jeffrey L. Rabin and Nancy Vogel contributed to this report.

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