Governor Angered by ‘Chaos’ Over Budget

Gov. Arnold Schwarzenegger, declaring “there’s chaos here,” opened a public and private war Thursday with the California Legislature over failure to pass a state budget now more than two weeks overdue.

The GOP governor issued his most forceful public condemnation of Democratic lawmakers, while privately prodding his own party to be more flexible. Schwarzenegger said he would not be “pushed around” by last-minute demands from lawmakers who have stalled talks on the $103-billion spending plan.

“I will stay here until 2006. I will stay here, and I will fight like a warrior for the people,” he said. “And there is no one that can stop me. If anyone pushes me around, I will push back, including the Democrats and the special interests. Trust me.”

His comments marked the most significant departure since the recall from his desire to bring a new spirit of governing to the Capitol. And it ended the veneer of cooperation that so far has characterized budget negotiations between Democrats and Schwarzenegger.

Democratic leaders vowed to defy the governor, creating political risks for both. In years past, stubborn language from a governor or from legislative leaders has often been unleashed a few days before a deal is announced -- the storm before the calm that forces compromise.

To Capitol observers, Thursday’s developments were no surprise, given the high stakes involved for both parties.

“We’re back to business as usual at the end of the budget year,” said Robert Waste, professor of public policy at Cal State Sacramento. “This stuff is going to happen every summer we are working on the budget, unless you move the Capitol to Guam.”

Despite Schwarzenegger’s significant successes thus far, passage of the budget has been considered his hardest task, because it takes gamesmanship to unite both parties over the Legislature’s most important job.

At a Thursday news conference, Schwarzenegger used language from the recall designed to separate himself from the Legislature, its special-interest supplicants and “this rancor.”

“Nothing in the state gets done, because as soon as you start becoming partisan and as soon as the parties start fighting -- the infighting -- and the special interests get involved, we start not representing the people, but representing the special interests, then there’s chaos here,” the governor said.

Without a quick resolution on the budget, GOP sources said, the governor is ready to unleash a political broadside against Democrats -- a “target list” of vulnerable lawmakers he would work to defeat in the fall election.

That has been many Democrats’ greatest fear, they say privately -- Schwarzenegger showing up in their districts with vengeance on his mind.

“If the Democrats continue to press a partisan course as opposed to a bipartisan solution over the next couple of days, then they are tempting that reaction,” said Rob Stutzman, the governor’s communications director.

Schwarzenegger has been losing patience with Democrats’ unwillingness to budge on two issues important to Republicans: repealing a pro-labor law that makes it easier for workers to sue employers and expanding school contracting laws to allow private firms to bid for services such as busing. The governor included the issues in his January State of the State speech but had said little else about the issues until now.

Republicans have not been immune to the governor’s frustration. He has privately told his own party’s leadership to be prepared to compromise on the issues, two GOP lawmakers said Thursday.

“The lead Republican negotiator is the governor, and when he says the deal is done, it is done,” said one. The Republican leaders, Sen. Dick Ackerman of Irvine and Assemblyman Kevin McCarthy of Bakersfield, however, denied that the governor had told them to fall in line.

Schwarzenegger said he was “absolutely in sync” with Republicans about repealing the “sue your boss” law, which former Gov. Gray Davis signed five days after the recall vote. And the governor said he supported Republican efforts to give schools new privileges to sign outside contracts for bus and cafeteria services -- something staunchly opposed by unions and Democrats.

“Why would we go and give the money so much needed for education in this state to the union drivers rather than keeping it right in the classroom?” Schwarzenegger asked. “I always said in my campaign the children should have the first call on our treasury, not the drivers. They should be able to contract out to the lowest bidder.”

Democrats contend that the two issues have nothing to do with the budget and should be dealt with separately, if at all. The school contracting issue, they said, is simply a way for Republicans to curry favor with bus companies that they want as campaign contributors.

“What’s amazing to me is they’re willing to see the popularity and the strength of their own governor go down the drain to continue the fight for what?” asked Assembly Speaker Fabian Nunez (D-Los Angeles). “Two bills -- ‘sue your boss’ and ‘protect a private bus company.’

The California School Employees Assn. began a radio ad this week suggesting that Republican lawmakers -- not Schwarzenegger -- were attempting to repeal the contracting-out law. The ad encourages people to call the governor’s office and ask him to keep the law.

Democrats plan to hold votes today and next week on their version of the state budget -- a provocation against the governor after more than a month of behind-the-scenes negotiations. That prompted Schwarzenegger to lash out, saying it wasn’t his budget they would be considering.

“What they’re trying to do is ... think they can put wool over my eyes,” he said. “It’s the oldest trick: Divide and conquer. I’m into unite and conquer.”

Democrats probably have insufficient GOP support to approve the budget if they force votes in the full Senate and Assembly. But the maneuvering is designed to persuade the public that the Democrats are moving forward and the GOP is stalling.

“The majority party moves their version of the budget,” said Senate President Pro Tem John Burton (D-San Francisco). “The Republicans don’t like it. But at least when someone says, ‘What the hell are the Democrats doing up there?’ this is what we’re doing.”

Nunez said Democrats had in fact reached agreement with the governor over the budget, particularly a plan to protect the finances of cities and counties from being raided by the state. Schwarzenegger’s problem, the speaker said, is convincing his own party to fall in line with the Democratic compromises.

“We believe, firmly, that each and every issue that deals with the budget has been resolved with the governor,” Nunez said. “Now, has the governor been able to get full buy-in from Republican legislators on those issues? I cannot tell you.”

Stutzman, the governor’s spokesman, said votes in the Legislature without a deal with the governor would be posturing and business as usual -- the kinds of things Schwarzenegger campaigned against.

“That is the Democrats’ version of giving up on finding a solution and wanting to make this a partisan issue,” Stutzman said, “which is really further convincing the governor that the Legislature is ... in need of reform.”

In the past, the governor has said he was “looking forward” to a day when the Legislature was part time. To Democrats, asking voters to make such a change would be the political equivalent of chemical warfare and would alienate Republicans too.

Burton finds the prospect of a part-time Legislature implausible. “He thinks that is some kind of punishment?” he said. “Republicans won’t like that. That doesn’t help him pass the budget. That doesn’t sound like Arnold. It sounds petulant, and he’s not a petulant guy.”

Schwarzenegger made ending bipartisan bickering a highlight of his election, but negotiations over the budget have found the Republican governor spending most of his time cajoling members of his own party and fighting off Democrats.

In the past, such cajoling involved the governor simply presenting an ultimatum to his own party members, something Schwarzenegger has been unwilling to do.

Former Gov. Pete Wilson “met with resisting Republicans and told them they were ... ‘irrelevant,’ ” said Bill Whalen, who has advised both Wilson and Schwarzenegger. “That is not Arnold Schwarzenegger’s style.... But at certain points you have to ... bully and bluster if need be.”

GOP pollster Frank Luntz said that ultimately it was not Schwarzenegger’s way to antagonize lawmakers. “The ‘Terminator’ is a consensus builder and not an intimidator.”

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Times staff writers Peter Nicholas and Jordan Rau contributed to this report.