Time to Take On Schwarzenegger?

This year’s state budget talks provide the first real test for what may become the most important relationship in California politics, that between Gov. Arnold Schwarzenegger and first-year Assembly Speaker Fabian Nunez.

The governor gained early political momentum after he reduced vehicle license fees, muscled the Legislature into repealing a law that would have given driver’s licenses to undocumented immigrants, won passage of a $15-billion deficit-reduction bond and negotiated a legislative deal to reform the workers’ compensation system. When it looked as though Schwarzenegger and state lawmakers would meet the often-missed deadline for a budget, the governor was hailed by many observers as an unstoppable political force.

The speaker was understandably reluctant to challenge Schwarzenegger. Nunez (D-Los Angeles) followed the governor’s lead, taking tax increases off the table as a possible solution to the state’s multibillion-dollar deficit. He played to the middle, calling for the restoration of proposed cuts in higher education funding instead of focusing on Schwarzenegger’s cuts in health and welfare programs.

Poll after poll showed the governor’s approval rating reaching record levels. Schwarzenegger’s swing through the state earlier this year to gather signatures to place a workers’ compensation reform package on the ballot had pushed Democrats to pass a legislative compromise, and many lawmakers remained careful not to pique the governor’s ire on budget matters.

But a strange thing happened when budget talks began dragging and Schwarzenegger shifted into campaign mode to get his way. Democrats didn’t seem to care. Increasingly inside the Capitol, there is a sense that when Schwarzenegger goes to a mall in Chico or a Mexican restaurant in Dixon to talk politics, the people flock to see the Terminator, not the governor. There is a corresponding belief among Democrats that the governor’s personal popularity doesn’t automatically translate into support for his policy proposals.

Meanwhile, Schwarzenegger developed a minor credibility problem in Sacramento, which can be disastrous for a politician. Mistrust helped sink Gray Davis’ governorship prematurely, and if there was a lesson for the new governor during the opening days of July, it was that a handshake deal in Sacramento actually means something.

The trouble began when Schwarzenegger signed off on a deal that would cut revenue to cities and counties for the next two years in exchange for constitutional protection against future reductions. Problem was that the governor promised legislators’ support for the initiative without having consulted them first. When he reportedly reneged on parts of the deal in subsequent talks with Democrats, Schwarzenegger was roundly criticized by local officials. In response, the governor made a public appearance over the Fourth of July weekend, lashing out at Democrats. He appeared to be flailing and, for the first time, seemed politically vulnerable.

Soon after, the governor’s budget plan and negotiating style encountered media criticism. Political columnists and cartoonists compared Schwarzenegger to his predecessor: Like Davis, he was unwilling or unable to make tough budget decisions and was untrustworthy.

Enter Nunez. After Schwarzenegger derided lawmakers as “children,” the speaker questioned the governor’s integrity, accusing him of “flip-flopping” on the local-government deal. The remark clearly angered Schwarzenegger. When the governor hit the road again to lash Democrats, Nunez dismissed it as a “dog and pony show.”

Nunez’s criticisms were far more biting than any anti-Schwarzenegger sentiment uttered by Senate President Pro Tem John Burton (D-San Francisco), largely because the governor and legislative leaders have become chums. Their close political relationship, one not seen in the Capitol in recent memory, will end this year when Burton is termed-out.

Burton is certainly not reluctant to take a shot at the governor, but when he criticizes Schwarzenegger it usually takes the form of a wisecrack. For example, Burton dismissed Schwarzenegger’s campaign-style appearance last week as “part of the governor’s gestalt. He likes the crowd and he likes to go out, and that is fine with me.”

Nunez’s more combative style in part stems from his background. Before coming to the Legislature, he was the political director of the Los Angeles County Federation of Labor. Burton is a veteran of both Sacramento and Washington whose first stint in the Legislature was under Gov. Ronald Reagan.

Nunez’s combativeness is also a reflection of his caucus. Assembly Democrats are, as a group, more liberal than their Senate counterparts and seem more eager to take Schwarzenegger on.

But the harsher tactics also carry risks for Nunez. Schwarzenegger is famously competitive. When his poll numbers sagged during the recall election, he did not hesitate to aggressively go after Lt. Gov. Cruz Bustamante, his chief rival, and Indian tribes, Bustamante’s biggest contributors, to further his political cause.

Schwarzenegger could inflict serious political damage on Nunez. Although the governor has vowed to stay out of highly contested Assembly races this fall, he could change his mind. Although his ability to move votes in legislative races is untested, Schwarzenegger’s fundraising prowess is well documented. If Schwarzenegger actively campaigns for Assembly Republicans this fall, Nunez could find himself leading fewer Democrats in the Assembly next year. Schwarzenegger, more than any other person in the Capitol, poses the greatest potential threat to Nunez’s speakership.

Odds are that this time next year, Schwarzenegger and Nunez will be where they are now, hashing out details of another painful budget plan. If current events are a reliable indicator, their relationship will be as contentious as that between former Gov. Pete Wilson and former legislative leaders Willie Brown and Bill Lockyer. Their battles epitomized the “summer slam fest” that Schwarzenegger vowed to end during his gubernatorial campaign.

As the budget stalemate dragged into its third week, Schwarzenegger appeared ready to take on Nunez and his fellow Democrats. Shortly after Nunez called a press conference criticizing the governor for failing to deliver Republican votes for a budget deal, Schwarzenegger called a press conference of his own. “Anyone who pushes me around, I will push back,” he said, “including the Democrats.”