Schwarzenegger's Lost Year 

The Austrian Oak is beaten by a bureaucracy he swore he'd change

Wednesday, Dec 24 2008

FOR ALL THE A-LIST DEMOCRATS and Hollywood big shots who packed the 3,332-seat Kodak Theatre early this year to witness presidential candidates Hillary Clinton and Barack Obama in their final pre-California-primary debate, only one received a long and loud ovation. That was former Gov. Gray Davis, spotted taking a balcony seat just before the debate, and for an instant upstaging the main event.

It seemed absurd at the time, that the first California governor ever recalled from office — one whose downfall didn’t even come through a respectable scandal or catastrophe, but through simple poor budgeting and lack of charisma — should fire up California Democrats. Upon his recall and replacement by Arnold Schwarzenegger in November 2003, Davis would seem to have been transformed, without hope of remission, into a symbol of failure, a healthful warning for future politicians about the limits of power in Golden State governance.

Were his fellow Democrats just feeling sorry for him when they gave him that long, lusty cheer? Were they indulging in some easy leave-no-Democrat-behind solidarity with their former leader? Or did they know something the rest of us didn’t?

click to enlarge KYLE T. WEBSTER
  • Kyle T. Webster

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That the Schwarzenegger administration has become Davis II is not an especially witty or original observation. Some critics have been saying it since shortly after Schwarzenegger took office.

Yet as 2008 ends, with just about two years (barring another recall) left in Schwarzenegger’s second term, California looks very much the way it did at the end of 2003 — only more so. The $38 billion budget deficit that prompted Davis’ recall has met its match in a state shortfall that is now by some estimates on track to top $40 billion. Gray Davis danced in the sunshine of the late dotcom boom, only to find state spending irreparably bloated once the economy tanked; Schwarzenegger allowed the budget to balloon throughout this decade’s real estate bubble and has no way to pay for it now that the bubble has burst.

Schwarzenegger and the Democrats had worked out an unusual legal maneuver that, without the normal Republican support required to raise taxes, would cost Californians more than $9 billion in extra income taxes, steep gas surcharges and fees. But the governor slammed the deal after Democrats refused to soften state labor and environmental rules which would provide an economic jolt to employers and builders. On Monday, standing near the 405 freeway in L.A., Schwarzenegger pointed to a project halted by the crisis and said that if the Democrats bend, he will boost taxes, which he called “revenues.”

Davis’ grasp on his own party’s side of the California Legislature weakened throughout his last years; Schwarzenegger’s never-strong relations with his fellow Republicans have degenerated into open conflict. As the stalemate wore on and his own party resisted imposing new taxes on Californians, the governor warned Republicans to put aside “ideological differences and negotiate and solve this problem” or “we’re heading toward a financial Armageddon.” Senate Minority Leader Dave Cogdill, R-Fresno, shot back that the governor is “bullying the Legislature.”

The scramble to close the revenue gap brought back even the idea of tripling the car tax — a move that proved suicidal for Davis but that Schwarzenegger (who would prefer a flat $12 increase in annual car fees) told the Los Angeles Times in November may be “a good idea” in “new circumstances.”

Schwarzenegger may try to point to the disastrous nationwide economy, in which 40 or so other states are experiencing budget strains, but he has a problem there. In an apples-to-apples comparison, California’s deficit as a percentage of its spending is one of the worst in the country, according to the Center on Budget and Policy Priorities.

Embarrassingly, Texas, the state most comparable to California in size, in its badly tanking economy and culturally challenging demographics, has zero deficit.

Californians might resent comparison to the Lone Star State. Gov. Rick Perry is a Republican who did not let his budget reel out of control by spending riches from the housing boom, while Arnold acted as if it would last forever, approving budgets that increased overall government spending by 40 percent — in just four years. Perry and a handful of governors resisted temptation, squirreled away fat reserves ­­­— did, in fact, exactly what Schwarzenegger promised to do.

Does all of this mean that Schwarzenegger really is just like Davis? The answer from former staffers, observers and California politicians — even the journalists who once covered his exciting first couple of years going after “waste, fraud and abuse” — is a definite maybe.

The real drama of the Schwarzenegger administration has been the spectacle of a big man dubbed the Austrian Oak during his weightlifting years now being cut down to size — a charismatic, visionary figure brought to stasis by a culture of laughably unimpressive politicians. California has a history of big-tent Republican governors ­— including Hiram Johnson, Earl Warren and Ronald Reagan — who left large footprints. If anybody appeared likely to restore some GOP razzle-dazzle to Sacramento after the frigid terms of George Deukmejian and Pete Wilson, it was Arnold Schwarzenegger.

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