Tactical Retreat on Pensions Is Definitely the Right Move

Gov. Arnold Schwarzenegger is like a guy who just underwent major surgery to have a cancer removed: He looks pale and weak, but is a whole lot healthier.

Of course, he should never have been smoking that junk in the first place, inhaling all those toxic fumes that induced hallucinations about fighting alongside “the people” and hindered his ability to cogitate real-world politics.

Promoting his pension privatization proposal -- the cancer of his “reform” agenda -- Schwarzenegger wound up fighting against too many people who were better organized, more experienced politically and even more popular than he: teachers, cops and firefighters.

Then add in nurses for an unbeatable alliance of adversaries. The governor boasted in December -- at his own women’s conference, of all places -- that the nurses union was fighting him “because I am always kicking their butts.” Since then, the nurses have been kicking his. Their brawl is over nurse-patient ratios.

And that segues into this aphorism: Sometimes the best move is a tactical retreat.

In the face of certain defeat, Schwarzenegger backed away Friday from his flawed ballot initiative to abolish traditional pensions for all new state, local government and public school employees and offer 401(k)-style plans.

But Democrats and their patron public employee unions should temper their celebrating. That’s because the impact of Schwarzenegger’s retreat on his principal reform agenda -- controlling spending and removing redistricting from the Legislature -- is likely to be a classic case of one step backward, two forward. And maybe a bunch more.

In abandoning pension privatization, the governor walked off with the Democrats’ most potent ammunition against his package of initiatives: the charge that he was eliminating death and disability benefits for public employees, including police and firefighters.

That wasn’t his intention. It was just a screw-up in initiative-drafting. But this is an excellent example of what often happens when “the people” -- usually special interests and their campaign consultants, and sometimes governors -- bypass the Legislature and head directly to the ballot.

The Founding Fathers had a sound idea: Have coequal branches of government serve as a check and balance -- with an elaborate legislative filtering system to catch flaws in law writing, such as wiping out death benefits for widows and orphans of slain police officers.

The system doesn’t always work because it requires effort and frequently courage, by the governor and the Legislature.

Schwarzenegger wandered into the pension minefield with carelessness and bravado.

Being “the reform governor,” he wanted to rein in runaway public pensions. They surely need to be. But rather than thoughtfully develop his own plan, Schwarzenegger glommed onto the overreaching privatization proposal of Assemblyman Keith Richman (R-Northridge) and used it to fill out his State of the State speech Jan. 5.

Richman’s strategy -- and subsequently Schwarzenegger’s -- was to use the pension initiative to lure Democrats and unions into negotiating. The two moderate Republicans would have settled for a hybrid system of traditional pensions and 401(k)s, or even some major tinkering to the present system: less generous benefits with increased employee contributions.

But the lure cast by Richman was so ludicrously unrealistic and flawed that the Democrats merely swam away scoffing.

Schwarzenegger ultimately followed a familiar pattern: negotiating with groups he might ordinarily have derided as “special interests,” but in this case politely called “stakeholders.” They included local government lobbies, law enforcement groups and some unions.

Failing to cut a deal, the governor settled for a commitment to negotiate in the future. He eagerly agreed to chuck the initiative, which was headed for a special election in November.

One way or the other, Schwarzenegger vowed, there’ll be pension reform -- either through compromise or another initiative next year.

“We will also accomplish the goal with our budget reform, the goal of redistricting and the goal of education reform,” he declared. “We are on course.”

Says the governor’s chief political guru, Mike Murphy, referring to the abandoned pension plan: “He’s like the guy who just dropped a 300-pound suitcase and can run faster.”

Not only can Schwarzenegger now escape potshots about being anti-widow and orphan, his retreat frees up $1 million in campaign funds for other initiatives.

The next load likely to be dropped -- and should be -- is his education “reforms.” One would require teachers to be paid strictly on merit rather than seniority. Like the pension scheme, this initiative overreaches and is a lightning rod for teacher opposition. The other idea -- increasing the teaching years needed for tenure -- is hardly worthy of the label “reform.”

Some Schwarzenegger strategists are urging him to focus solely on budget and political reforms, the issues that helped get him elected. “Budget reform is the franchise,” Murphy says.

Uncharacteristically, the governor has been scattered. “A lot of Arnold supporters want to rally around the flag for him, but they can’t find the flagpole,” says Allan Hoffenblum, publisher of the California Target Book, which analyzes political races.

To regain all his political health, Schwarzenegger will need more self-discipline. That means more focus, fewer fun and games on the road and some heavy lifting in the Capitol.

George Skelton writes Monday and Thursday. Reach him at george.skelton@latimes.com.