When Governor Arnold Schwarzenegger announced his candidacy for re-election last September, it was hardly met with a wave of enthusiasm. First of all, it was a transparent bid to raise money for his flagging special-election slate in November; Republican donors needed assurances he’d bring his movie-star appeal to the party when it counts in 2006. Secondly, it was an unwelcome reminder: The race has begun in yet another election.
Election fatigue? We have democracy fatigue. We keep voting and voting, but the state’s crippling budget crisis doesn’t go away.
Which doesn’t bode very well for anyone running for governor next year. So far, that list includes Schwarzenegger, Democratic state Treasurer Phil Angelides (Sacramento) — who was the first to declare — and Democratic state Controller Steve Westly (Atherton), plus a handful of folks from the tall grass, like the Peace and Freedom Party and the Nihilists. The two Democrats can offer voters new alternatives, sure, but they should also brace for voter anger: Politics in California have come to a partisan impasse, and polls show that Democrats — who control both chambers of the state legislature with handy majorities — share the blame. Only 38 percent of voters may have had a favorable opinion of Schwarzenegger in the Nov. 22 Field Poll, but Angelides stood at 23 percent and Westly at 18 percent.
In fact, since Schwarzenegger swept into politics during the recall election, the circus atmosphere he helped create has never really abated. It hasn’t had a chance. We’ve been in a state of constant campaign crisis ever since. The Governator — who in 2003 beat out 135 other candidates, including pro wrestlers and porn stars, not to mention the then-recently elected second-term Governor Gray Davis — set up his smoking tent in Sacramento, promising to clean house and balance the budget, and was in office two days before he gave up and called a special election. In that one, in March 2004, he hoodwinked conservative Republicans, desperate to support him, into backing an unprecedented $15 billion bailout bond. Then the new governor, who had been elected as a nonpartisan moderate, went on the road stumping for extreme right-winger George W. Bush in yet another divisive, emotionally wringing election that November. And then (tired yet?), last May came the triumph of Antonio Villaraigosa in a mayoral election that galvanized all of Los Angeles. Shortly after that came the second special election called by Schwarzenegger, for which the Actor in Chief was heckled all around the state by fellow actors Warren Beatty, Annette Bening and Rob Reiner. That one cost almost $80 million in public money and — aside from giving new life to the state’s union movement — achieved nothing.
By then, finally, it was clear: The electorate had had enough. The people wanted the governor and the legislature to get back to their real jobs. Which is, interpreted correctly, to give us way more than we can afford, without messing too much with taxes.
The candidates for governor now march into this bog of fatigue and disappointment knowing they have to deliver some bad news: They’re going to have to raise some money. Largely, Campaign 2006 is going to be defined by whichever candidate makes the others admit it.
“I do think the Democrats will be in trouble on the issue of taxes. And that’s where the politics will get interesting,” says Raphael Sonenshein, a political scientist at Cal State Fullerton. “Because the voters very much favor greater spending on education. People love infrastructure, so they’re probably going to think borrowing money for infrastructure is a good idea. But then, at some point, this runs into the question of taxes, and then there’s a little bit of a dare match going on — who’s going to say it first?”
In fact, three things make this coming campaign interesting, despite the state’s severe case of burnout:
* One, after the results of this latest special election, all the candidates will want to be the Guy Who Gives You Things. Democrats would like to see Arnold out front on this, promising a lot but also forced to explain how he would pay for it. Of course, that could backfire; California has a strong governorship, and Schwarzenegger could simply deliver a budget loaded with education and things Dems don’t dare trim, thus forcing them to find the dough.
* Two, evidently Schwarzenegger’s year-long phase as a far-right Republican has abruptly ended. He recently brought on Democratic Party operative Susan P. Kennedy as his new chief of staff — which has outraged the GOP. Only weeks ago, he was happy to take their umpteen millions, but, even before the results were in, he’d already started turning away from the Dark Side. They’ll probably still back him in the election, but maybe there will be some delicious light-saber battles along the way. Pissed-off party activists have launched a website trying to draft Passion of the Christ director Mel Gibson (Melgibsonforgovernor.com) in an attempt to force the governor to recognize the power of Christian conservatives in his base.
* Three, this may turn out to be a refreshingly un-ideological campaign. Which would match the uniquely un-ideological bent of the California polity. Voters have proven they want bipartisan solutions, and Schwarzenegger may find himself in unfamiliar terrain: the land of the wonks. He’s running against two centrist bean-counters — the treasurer and the controller — who are already neck-deep in tax code. If they start explaining just how Schwarzenegger is keeping loopholes open for his corporate friends — and how, exactly, they’d find a bunch of new money — their relative lack of star power may not matter. Instead, Schwarzenegger would have to drop some of his Reagan-esque detachment and brush up on wonkese. The only challenge for the people would be to stay awake long enough to vote.
Right now, Gov. Schwarzenegger’s biggest challenger is Angelides. A longtime digger in the Democratic Party trenches, he came out very early and has practically cornered the market on endorsements. His campaign is co-chaired by U.S. House Minority Leader Nancy Pelosi (D – San Francisco), Sen. Barbara Boxer (D – Marin), Sen. Dianne Feinstein (D – San Francisco), and state Assembly Speaker Fabian Núñez (D – Los Angeles). To date, he’s raised about $15 million for his campaign and has reeled in the nod from more than 300 elected officials.
But the treasurer hardly has the June primary sewn up. Westly, for instance, has a lot more money at his disposal than Angelides — a former eBay exec, the controller earned $214 million in 2004 alone, and has about $12 million in his campaign coffers — though he was an early supporter of Schwarzenegger and will battle charges of flip-flopping. Election Day is still almost a year away, and a wounded Schwarzenegger has the Democratic machinery abuzz with possible candidates, like Leon Panetta, onetime chief of staff for President Bill Clinton, or Rep. Loretta Sanchez of Orange County. Former two-term governor Jerry Brown (D – Oakland) has settled rumors about his candidacy by running for Attorney General, and current A.G. Bill Lockyer is going for treasurer. Insurance Commissioner John Garamendi (D – Walnut Grove) has thrown in for lieutenant governor.
Rob Reiner has announced he will not run, but Oscar-winning Democratic operative Warren Beatty hasn’t declared either way. Comedian Robin Williams’ name has been floated. Some effort had been made to draft San Francisco mayor Gavin Newsom, who has said he categorically refuses to run. So far, Los Angeles Mayor Villaraigosa has also said he won’t run … so far. Other names that have come up are Apple Computer head Steve Jobs and booted governor Davis. One California lion really worth watching is Feinstein, who is backing Angelides but lost a close governor’s race to Pete Wilson in 1990 and has always expressed an interest in the job.
“I am very biased. I think it’s hers for the asking, but I don’t think she’ll ask,” says Kam Kuwata, who’s in the midst of organizing Feinstein’s 2006 Senate campaign. “But I’m not saying the door is 100 percent closed. That’s for her to close, if she wants to close it.”
Any real contenders who are undeclared at this point are presumably waiting to see whether Schwarzenegger can right himself and buoy his plunging popularity. But Angelides, for one, is not waiting.
“I want to do the job of governor, not just the sound bites,” he says, reached by phone during a campaign event. “I got into this race when Schwarzenegger’s poll ratings were as high as his box-office receipts. But that didn’t matter to me. He was harming the future of the state. He was practicing the politics of debt and division and diminished opportunity. He’s a governor who said he would be the people’s governor, but has done the bidding of the lobbyists and the powerful special interests as no other governor in California’s history.”
Angelides has plans for California, utopian plans involving expanded healthcare for the uninsured, increased home ownership, and dramatic environmental cleanup. Many of these ideas are represented by programs he’s already created or backed, and he’s comfortable being defined by what he’s done with the state’s money and with Schwarzenegger’s agenda — often working to thwart the Governator’s attempts to curtail services. For instance, when the governor proposed cutting $680 million from the University of California and California State University systems, and hiking tuition, Angelides toured campuses and battled back, helping to diminish the final impact on students. Still, as he points out repeatedly in our conversation, Schwarzenegger’s tuition hikes discouraged an estimated 25,000 kids from going to college. He likens this to a kind of tax hike on families with college-age children.
In recent days, Schwarzenegger, looks to be fighting back on that front, announcing a new budget plan that would make those tuition hikes unnecessary.
Mostly, however, Angelides likes to point out the clever things he’s done with the state’s massive public-employee pension funds. We can, he says, make a profit and change the world. To that end, he’s plowed a bunch of those billions into renewable energy investment and smart growth, including inner-city infill such as loft buildings being rehabbed in downtown Los Angeles, and new mixed-use residential developments in Hollywood, emphasizing growth along subway lines and transit corridors. As the creator of an innovative real estate development firm prior to his work in government, Angelides and architect Peter Calthorpe built a vast, 3,300-home development south of Sacramento that won notice nationwide in 1990 for getting residents out of their cars and encouraging walking, neighborliness and reliance on mass transit.
He’d like to expand upon this experience, and he’s not afraid to raise taxes to do it. First, though, he’d go after fraud and collections problems, which he and Westly acknowledge has left $6 billion in taxes uncollected. Then, well, there are the richest Californians, who ought to pony up. Schwarzenegger’s failed Proposition 76, he points out, was an attempt to address the money void, but without having to hurt any of his wealthy or corporate supporters.
“He was addressing it in a weak way,” snaps Angelides, who is respected as a tough, behind-the-scenes operator. “Former governors have faced tough times: Ronald Reagan, Pete Wilson have faced bigger budget deficits, by proportion, than Arnold Schwarzenegger faces. What did they do? Even though I didn’t agree with all of their policies, they balanced the budget. They made some cuts in government. Both Ronald Reagan and Pete Wilson asked corporations to pay a little more so we could fund schools. And they asked the wealthiest Californians, who make over $300,000 a year by today’s dollars, to pay a little more. This governor punted. He borrowed billions of dollars, sent the bill to our kids, and then told the voters that he needed more power to do his job.”
That debt, Angelides points out, is piling up. When Schwarzenegger took office, the state was paying on $18 billion in debt. The treasurer noted in his October 2005 Debt Affordability Report that this now stands at $26 billion. Figures from California’s nonpartisan Legislative Analyst’s Office show that the interest alone from the state’s bond debt, from 2004 to 2011, will cost $33.7 million — and then we have to repay the $26 billion.
A man without a party
Well, and so what? Reagan never stopped for one second to consider the record deficits he racked up, and he was considered a Good American. But Reagan, like Bush, never changed his stripes. Schwarzenegger has confused everyone with his abrupt L.A. sweeps across all six lanes of the political spectrum, like a man in search of an answer. Republican political analyst Tony Quinn, writing in the Sacramento Bee just after November’s special election, excoriated the opportunistic Republican and corporate handlers who surround the governor, calling them the “four horsemen of Gov. Arnold Schwarzenegger’s apocalypse,” and adding, “Schwarzenegger’s consultants, not his opponents, destroyed his mystique of nonpartisanship. His fundraisers morphed him into the same kind of money-grubbing politician the voters threw out of office two years ago. He looked like a mafia hood, sneaking into his own fundraisers while legions of sign-waving protesters picketed for the television cameras.”
“He came into office with such a breath of fresh air,” says an obviously impressed Kuwata. “He was going to be somebody who, not only figuratively but literally, had a big tent. And it was one of the most sought-after tickets in all of Sacramento, to be invited into the big tent.” Then, he says, about 15 months ago or so, came an interview with 60 Minutes in which Schwarzenegger talked about running for U.S. president. Then he gave two highly partisan and publicized speeches for Bush in the 2004 elections, one at the 2004 GOP convention where he called the Democrats “girlie-men,” then in Ohio.
“He became more and more partisan,” Kuwata adds. “I think that was the beginning that led to the downfall that took place in November.”
That downfall was all but inexplicable. Suddenly, the pro-choice governor was backing an anti-abortion ballot measure. And rabidly attacking teachers, nurses and firefighters, calling them “special interests.” And shilling for Big Pharma to help defeat a prescription-purchasing plan for California seniors. The guy who was going to “blow up the boxes” was suddenly using a gilded corporate hammer to do it. Mike Murphy, the former presidential campaign strategist for Sen. John McCain (R – Ariz.) — who is also the top strategist for outgoing Massachusetts Governor Mitt Romney and Florida Governor Jeb Bush, both potential 2008 presidential candidates — had Schwarzenegger in an aggressive right-wing posture that defied everything the people knew about the man.
And when that didn’t work, Schwarzenegger took some of analyst Quinn’s advice: He instantly rebuilt his cabinet, starting with a new chief of staff, Susan Kennedy. Former cabinet secretary to Gray Davis, Kennedy is a Democratic insider, a former party executive and an abortion-rights activist. Similarly, first lady Maria Shriver took on former Davis aide Dan Zingale as her new chief of staff. Instantly, all those Republicans who’d thrown money at the special election and thought they’d found a conservative ally felt betrayed, and Schwarzenegger had a full-blown GOP revolt on his hands. Republican Party operatives and grassroots volunteers, especially Christian conservatives, have threatened to abandon Schwarzenegger and his reelection campaign, beginning at next February’s Republican Convention.
Over the past few weeks, little or nothing has been heard from Murphy, except for an appearance at a California Chamber of Commerce meeting in Newport Beach, where he told business leaders it was their fault the special election went badly, saying they’d simply let the unions outspend them. Dan Schnur, a Republican adviser to ex-Gov. Pete Wilson and Sen. John McCain, wrote in the Los Angeles Times on Dec. 6 that Schwarzenegger might be better off running as an Independent.
As of this writing, the governor’s staff and spokespersons at the California Republican Party were still sorting through these changes and disputes, and repeated calls to four of his press spokespersons — including the departing Rob Stutzman — yielded no one able or willing to comment.
If Schwarzenegger can bring up his approval ratings, say, 10 percent in the coming months, he’s back in the race. But many in the Democratic Party, gloating over the special-election debacle, say his ability to intimidate with that movie-star Governator shtick is gone, and probably forever.
“Doesn’t work,” said state party chairman Art Torres. “If the people don’t agree with you, it doesn’t work, and the people resoundingly did not agree with his tactics, his strategy or his message.”
If Arnold manages to climb back into the high 40s, however, Republicans find themselves in a weird spot. He’d still be the guy to beat, but would he still have Republican backing? Would he even want to be a Republican next year? Would anyone?
“The wild card is that next year is going to be an absolutely terrible year for Republicans — they’re all lining up for their prison garb right now,” says Raphael Sonenshein. “But Arnold may succeed at separating himself enough from the national party to not be a victim of that. Given how much he spent the last year building this product identity as a right-winger, for no obvious reason, since he’s not really a right-winger — now you’ve got to go and do more than one or two things to undo that.”
Finding the money
Steve Westly is a Guy Who Gives You Things. He, too, has many beautiful plans for California, including treating Proposition 98 as bare-minimum funding for K-12 education, making California fully compliant with the Kyoto Treaty on global warming, and expanding Healthy Families to cover all uninsured children in the state. In fact, he’s reaching out the farthest as the campaign’s idea man, tapping into dreams he knows are popular with tech-savvy progressives like himself. Those things will take money. But, as the state’s controller — the tax man — he says the first source is to collect on unpaid bills. He’s not going to be the first person to talk about taxes.
“On this key issue of the day, which is ‘How do you bring more money into government?’ ” he notes, “the treasurer’s on record as supporting a number, I think six or seven, of new taxes. I’ve actually shown that you could bring in billions of dollars without raising a nickel in taxes.”
“I don’t say ‘never’ to new taxes, that’s not responsible,” he adds, “but … there’s a middle ground.”
For proof, he points to two highly successful programs he’s managed. One was a voluntary-compliance initiative to get high-end tax evaders to cough up. Launched three years ago, it was expected to bring in $90 million and eventually raked in $1.4 billion as accused cheats, contacted by letter, found it would be cheaper to pay than fight. Similarly, he sent another such amnesty letter to smaller-time meat-and-potatoes Californians, pointing out that discrepancies had been found and letting them pay voluntarily; that one was expected to bring in $250 million but netted $2.4 billion.
Angelides acknowledges that going after tax cheats is the thing to do, but wonders why Westly wasn’t doing more of it.
“The fact is, it was the legislature who took the initiative to pass the tax amnesty program,” Angelides says. “The state could do more. Mr. Westly himself acknowledges that the state is not collecting $6 billion in taxes, and my view is: That’s your job. Go do it. You’re in office to do that, not to talk about it being a problem, but to solve it.”
For his part, Westly is looking forward. As befits a man who made his fortune as a senior vice president at eBay, he’s big on technologizing state government, with programs like Ready Return. During the 2005 tax season, 10,000 people who regularly file simple 540-EZ tax forms were sent their tax papers already filled out, using numbers pulled from their W-2s. All they had to do was sign and send it back. For the 20 percent of people who file the EZ form, this represents a godsend.
And, yes, there was a time when Westly said that taxing the Internet was inevitable. Nowadays, he says he doesn’t think that’s the right thing to do. But he has added a line to the state’s tax return to offer people the opportunity to pay up for stuff they’ve bought online. (Strangely, few people use it.) A perfect demonstration of the deep, almost preternatural appeal of anyone willing to say “No new taxes.”
Given that the talk has already turned to control of the budget this early in the governor’s race, maybe we’ll get lucky. Maybe we’ll get a real discussion of how to develop a sustained, balanced budget. Maybe the reforms of 2004’s Proposition 58 — which requires a balanced budget and creates a state rainy-day fund — will kick in for real, and the state will get off the boom-and-bust roller coaster. Maybe someone brave will start talking about making corporations pay more under 1978’s Proposition 13, which drastically reduced property taxes. Maybe the governor and the legislature will see that they both need to deliver some real, paid-for goodies, not borrow $50 billion for infrastructure improvements, but borrow less and find ways to pay for the rest. At Governor Schwarzenegger’s special-election-night shindig, which felt more like a wake, California Republican Party Chairman Duf Sundheim swore he’d received assurances from Speaker Núñez and Art Torres that the Democrats were on board for some fast work.
“Here is the reality of life in California politics right now,” notes Kuwata. “Our major institutions, if you look at the published public polls — Field Poll, Public Policy Institute of California, L.A. Times — they all show the same kind of trend. The governor is not viewed favorably by a majority of the electorate, and neither is the state legislature. So there is some suspicion right now as to whether or not they can control the budget.”