Governor Arnold Schwarzenegger delivers his November 2006
victory speech at the Beverly Hilton in this NWN video.
As November slides to December and Governor Arnold Schwarzenegger’s very expansive agendas on water and, especially, health care reform, remain yet unrealized, some eyes turn to incrementalism. Which brings up the man Schwarzenegger replaced in the dramatic 2003 California recall, former Governor Gray Davis.
Davis, and he says so himself, prided himself on “incrementalism.” Yet he is a fan of Schwarzenegger, and the two today are friends. “He thinks,” says the Democrat elected twice as governor, once as lieutenant governor, and twice as state controller after serving four years in the Assembly and nearly seven years as then Governor Jerry Brown’s chief of staff, “really big.” In contrast, says the native New Yorker who nonetheless dreamed of being governor of California, “I thought in smaller steps. I didn’t want to scare people.”
Schwarzenegger doesn’t mind “scaring people.” He thinks of it as inspiring them. But he’s pushed all year long for a universal health care plan based on a market system, which would require every Californian to buy health insurance which is not price regulated. Implicit contradictions have, not surprisingly, led to a somewhat Rube Goldberg-like construct which has remained tantalizingly close to fruition yet out of reach for months now. Notwithstanding Schwarzenegger’s many pronouncements to the contrary.
Schwarzenegger was advised by, as the saying goes, some people months ago to push hard for a huge result then settle for something historic yet manageable. Like health care for all children in California, and an end to denial of health care coverage for people with pre-existing conditions. The latter is something that Assembly Republican Leader Mike Villines has said repeatedly that he could get behind.
Schwarzenegger has chosen not to do that, and the Christmas shopping season is now upon us.
Former Governor Gray Davis wryly discusses Schwarzenegger, the recall, California’s chronic economic and budget woes, and Jerry Brown in this NWN video.
None of which is to say that the former action superstar has not had major successes. On infrastructure, workers compensation reform, renewable energy, climate change, crisis management, and so on.
One area where he has had less success — and this is something very familiar to Davis, since it was one of a few things which cost him his governorship — is the state’s budget.
Both Schwarzenegger and Davis were confronted by two fairly intractable elements when they assumed their governorships. An ultra-government faction in state politics, and an anti-government faction.
Davis saw this very clearly when he won his landslide election as governor in 1998. He told me not long after that he recognized the pent-up demand among Democratic constituency groups, notably public employee unions, for massive new government spending programs that had built up in the 16 years following the last Democratic administration under Jerry Brown. And that he would choose largely to resist these demands. Because he could not be sure that the burgeoning dot-com boom of that time would continue.
Indeed, Davis, who was flown about the state on Gulfstream jets chartered by organized labor during his devastation of right-wing Republican Dan Lungren, was immediately confronted with a lengthy labor wish list after he became governor. Which he mostly blew off. Then. But he later acceded to a number of programs, both spending sought by the ultra-government faction and tax cuts sought by the anti-government faction.
Later, when Davis had become vulnerable following the electric power crisis of 2000 and 2001, he was confronted by still more demands even as the state sunk into a deepening fiscal crisis. The Latino Legislative Caucus declared that it would produce an alternative budget.
I asked him what he thought of the notion. He replied that he thought little of it, since it would never happen. And indeed it did not. Just as the unhappy far right of today takes fiscal pot shots but offers no solutions, the unhappy far left of that time failed to put up as promised.
What turned out to be Davis’s final budget, in 2003, called for a balance of major cuts and tax increases. But what transpired was what he mostly expected, what then Senate leader John Burton called a “get out of town budget.”
The Democrats balked at cuts. The Republicans balked at taxes. And what had become a truly massive crisis rolled on.
Enter Arnold Schwarzenegger. The action superstar, fresh off the launch of the global megahit Terminator 3, took care not to take an anti-tax pledge, though he provided many anti-tax atmospherics. He told me that he did not like taxes but did not want to fence himself in.
And indeed he did not. As he discussed his first budget, Schwarzenegger left open the possibility of a temporary tax increase. Which led to no little consternation amongst the anti-government faction that was loudest in Republican ranks, including some among what turned out ultimately to be a notably failed crew of staffers and advisors.
When Schwarzenegger came in, he had an historic opportunity to confront the two dysfunctional extremes of California politics. The ultra-government faction, which sees a governmental solution even to problems which do not actually exist. (Think smoking on the beach.) And the anti-government faction, which in the words of the godfather to the current faction narrowly running the state Republican Party, Grover Norquist, wants to drown government in a bathtub.
The dynamics of the recall impelled Schwarzenegger to cut the unpopular car tax and then seek a way to make constitutional the massive deficit borrowing already approved by Davis and a bipartisan majority of the Legislature. He did both.
But having done those politically necessary things, he could then have moved forward with a temporary tax increase — to make up for the car tax cut, without which there would be little structural deficit problem today — and the California Perfomance Review (CPR), which sought long-term efficiencies throughout government.
Instead, he ultimately decided against both. And I will write about this at greater length in the future.
When I wrote in 2004 that the California Performance Review was behind schedule, Schwarzenegger protested. He told me: “I am going to blow up the boxes (of government, as he’d promised in his State of the State address). And you may be in one of those boxes!”
But he did in fact back away, with the CPR program a victim of an internal fight. All of it between Republicans, as it happens. And the great conservative Republicans, such as Tom McClintock and the like, had little if anything to say about it.
All of which makes Davis, who has a highly informed and rather sardonic view of California government, rather amused.
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38 Comments
Jonas Blane:I love that Schwarzenegger video. It feels like I’m there.
Nov 28, 2007 - 6:14 am Jonas Blane:I love that Schwarzenegger video. It feels like I’m there.
Nov 28, 2007 - 6:14 am Jonas Blane:Gray Davis is very funny and smart, too bad he got screwed up.
Nov 28, 2007 - 6:25 am Ann:Watching Gray Davis I almost like him. lol
Nov 28, 2007 - 6:49 am Capitol Boy:Gray Davis probably has the best analysis of California politcs going. All due respect to our proprietor here.
Nov 28, 2007 - 7:00 am Bill Bradley:Duly noted. He is an excellent analyst, and of course knows far more about government and politics than virtually anyone else in California.
Nov 28, 2007 - 7:34 am Bill Bradley:Duly noted. He is an excellent analyst, and of course knows far more about government and politics than virtually anyone else in California.
Nov 28, 2007 - 7:34 am Bill Bradley:Almost? Most kind.
Nov 28, 2007 - 7:34 am Bill Bradley:>Ann :
Watching Gray Davis I almost like him. lol
Nov 28, 2007 06:49 AM
It is too bad.He started off very well.
>Jonas Blane :
Nov 28, 2007 - 7:35 am Bill Bradley:Gray Davis is very funny and smart, too bad he got screwed up.
Nov 28, 2007 06:25 AM
Being within 10 feet of the subject will do that.
>Jonas Blane :
Nov 28, 2007 - 7:36 am Sam Loomis:I love that Schwarzenegger video. It feels like I’m there.
Nov 28, 2007 06:14 AM
Those were fun times. Davis tripled the car tax and authorized licenses for illegals just months before his recall election.
Bill Clinton lost re-election as Arkansas governor after he hiked up the truck tax too.
Hillary got burned for claiming NY-GOV Eliot Spitzer’s licenses for illegals plan was a good idea, even though she doesn’t support it.
I like the pattern. Don’t mess with our cars.
Nov 28, 2007 - 8:08 am Sam Loomis:Those were fun times. Davis tripled the car tax and authorized licenses for illegals just months before his recall election.
Bill Clinton lost re-election as Arkansas governor after he hiked up the truck tax too.
Hillary got burned for claiming NY-GOV Eliot Spitzer’s licenses for illegals plan was a good idea, even though she doesn’t support it.
I like the pattern. Don’t mess with our cars.
Nov 28, 2007 - 8:08 am Hap Hazard:“with the CPR program a victim of an internal fight. All of it between Republicans” = “a notably failed crew of staffers”, whose were nonetheless ‘talented’ in conspiratorial inaction unless the Business Roundtable or the Cal Chamber were at the controls of the marionette strings
Nov 28, 2007 - 8:30 am Paul Burton:Couldn’t the failures to pass a budget that really supports the needs of Californians - like providing health care for children, funding transportation improvements, or funding a non-profit health insurance system - have something to do with the ’success’ of cutting the vehicle license fees? More than one legislator has pointed out that the budget is a shell game, shifting money from one fund to another, that could be corrected by re-instituting higher car taxes.
Arnold’s great ’success’ in workers’ compensation reform includes cutting compensation for permanently disabled workers so much that many have lost homes paying exorbitant medical costs. John Burton accused Arnold of breaking his promise that injured workers wouldn’t be further hurt by the phony reforms. The only success here is that Arnold’s friends in the insurance industry are laughing all the way to the bank.
Nov 28, 2007 - 9:49 am richard locicero:Davis screwed himself by allowing everyone to see the wheels turning instead of hiding them like a good magician, er, politician. But he is right of course. And the reason? Well I’d say three reasons:
1. Gerrymandered seats that makes the legislature “Safe” and allows the crazies, particularly on the GOP side, the dominant force.
2. Term limits - three terms or 6 years is ridiculous. It takes two terms to learn where the bathrooms are. There’s a new book by Bill Boyarsky about Jess Unruh. We’ll never see his like or that of Pat Brown again and look what was accomplished then!
3. That 2/3 vote requirement. With the conditions above forget any budget being in place. Guess we’ll have to wait for Wall St. to step in an knock heads.
Compounding the above is a media that, by and large ignores what goes on in Sacramento. Its completely vanished from the electronic media. Might get in the way of a car chase or a missing blond.
So what happens? Nothing! We’re heading for as NYC type implosion.
Nov 28, 2007 - 9:53 am Bill Bradley:Actually, once California gets through the next year or two, it’s in pretty good shape.
Nov 28, 2007 - 9:55 am Bill Bradley:Paul, do you read what I write before you comment on it?
>Paul Burton :
Nov 28, 2007 - 9:56 am Bill Bradley:Couldn’t the failures to pass a budget that really supports the needs of Californians - like providing health care for children, funding transportation improvements, or funding a non-profit health insurance system - have something to do with the ’success’ of cutting the vehicle license fees? More than one legislator has pointed out that the budget is a shell game, shifting money from one fund to another, that could be corrected by re-instituting higher car taxes.
Paul, do you read what I write before you comment on it?
>Paul Burton :
Nov 28, 2007 - 9:56 am John Thomas Flynn:Couldn’t the failures to pass a budget that really supports the needs of Californians - like providing health care for children, funding transportation improvements, or funding a non-profit health insurance system - have something to do with the ’success’ of cutting the vehicle license fees? More than one legislator has pointed out that the budget is a shell game, shifting money from one fund to another, that could be corrected by re-instituting higher car taxes.
BB: Actually, once California gets through the next year or two, it’s in pretty good shape.>
That was the gist of a recent Weintraub article, but that conclusion based on LAO analysis as I recall ignored the 800 pound gorilla - unfunded state & local government health & pension costs. The death spiral affecting government services.
Nov 28, 2007 - 10:04 am Bill Bradley:Schwarzenegger’s team in the recall campaign — all Republicans — was excellent and the current crew is quite good.
>Hap Hazard :
Nov 28, 2007 - 10:07 am Bill Bradley:“with the CPR program a victim of an internal fight. All of it between Republicans” = “a notably failed crew of staffers”, whose were nonetheless ‘talented’ in conspiratorial inaction unless the Business Roundtable or the Cal Chamber were at the controls of the marionette strings
Nov 28, 2007 08:30 AM
That issue’s always been there.
>John Thomas Flynn :
Nov 28, 2007 - 10:09 am Bill Bradley:BB: Actually, once California gets through the next year or two, it’s in pretty good shape.>
That was the gist of a recent Weintraub article, but that conclusion based on LAO analysis as I recall ignored the 800 pound gorilla - unfunded state & local government health & pension costs. The death spiral affecting government services.
Nov 28, 2007 10:04 AM
When you listen to the video, you’ll learn that Davis cut the car tax before the state got into budget trouble.
Which is one of the reasons why it got in budget trouble.
>Sam Loomis :
Nov 28, 2007 - 10:12 am John Thomas Flynn:Those were fun times. Davis tripled the car tax and authorized licenses for illegals just months before his recall election.
Bill Clinton lost re-election as Arkansas governor after he hiked up the truck tax too.
Hillary got burned for claiming NY-GOV Eliot Spitzer’s licenses for illegals plan was a good idea, even though she doesn’t support it.
I like the pattern. Don’t mess with our cars.
Nov 28, 2007 08:08 AM
Bill Bradley :
That issue’s always been there.>
Always been there- yes. But not “booked”, i.e., accounted for according to govt accounting principles until 1/1/2008
Nov 28, 2007 - 10:38 am John Thomas Flynn:Bill Bradley :
That issue’s always been there.>
Always been there- yes. But not “booked”, i.e., accounted for according to govt accounting principles until 1/1/2008
Nov 28, 2007 - 10:38 am richard locicero:Bill what about the compounding effects of bonds used to finance current operations? That’s what got NYC in trouble. And given the meltdown in real estate here with record property delcines I don’t see us coming out so good in the near term - i.e the next few years.
Nov 28, 2007 - 10:58 am Bill Bradley:That’s something that was done to tide over the HUGE, i.e., much bigger deficit in 2003.
Nov 28, 2007 - 12:28 pm Bill Bradley:That’ll be shuffled off.
>John Thomas Flynn :
Nov 28, 2007 - 12:29 pm Jonas Blane:Bill Bradley :
That issue’s always been there.>
Always been there- yes. But not “booked”, i.e., accounted for according to govt accounting principles until 1/1/2008
Nov 28, 2007 10:38 AM
Can Jerry Brown straighten all that out?
Nov 28, 2007 - 1:31 pm Dana:Oh, my. We should at least be clear in re our history. For now let us be clear in re “the car tax” cut.
The Vehicle License Fee (aka “the car tax”) was raised under a formula set in place by Governor Wilson, to reverse a VLF cut done for the anti-tax Reps during a time of plenty to address any future budget shortfall due to diminished revenue.
Here is a link to the 5 cent explanation of the VLF from the DMV website:
http://www.dmv.ca.gov/vr/fees/vlf_fees.htm
Demogogues like McClintock pounded away at the increase and Schwarzenegger joined the chorus during the recall, promising to rescind the increase. AFAIK nobody (not his opponents in the recall, Governor Davis or the media) called Schwarzenegger on the implications of this stance. Predicatbly immediately after the election local governments started caterwauling about the impact on local services if the VLF was cut. That’s right–VLF was mostly funding local government. Schwarzenegger promised to hold local governments harmless–basically to backfill the reduced revenue with monies from the state general fund. Which blew a hole in the budget, as Bill sagely notes this impact of “the car tax cut, without which there would be little structural deficit problem today”.
Just a small slice of why our budget situation is a mess, and bound to get worse.
Nov 28, 2007 - 2:04 pm Dana:Oh, my. We should at least be clear in re our history. For now let us be clear in re “the car tax” cut.
The Vehicle License Fee (aka “the car tax”) was raised under a formula set in place by Governor Wilson, to reverse a VLF cut done for the anti-tax Reps during a time of plenty to address any future budget shortfall due to diminished revenue.
Here is a link to the 5 cent explanation of the VLF from the DMV website:
http://www.dmv.ca.gov/vr/fees/vlf_fees.htm
Demogogues like McClintock pounded away at the increase and Schwarzenegger joined the chorus during the recall, promising to rescind the increase. AFAIK nobody (not his opponents in the recall, Governor Davis or the media) called Schwarzenegger on the implications of this stance. Predicatbly immediately after the election local governments started caterwauling about the impact on local services if the VLF was cut. That’s right–VLF was mostly funding local government. Schwarzenegger promised to hold local governments harmless–basically to backfill the reduced revenue with monies from the state general fund. Which blew a hole in the budget, as Bill sagely notes this impact of “the car tax cut, without which there would be little structural deficit problem today”.
Just a small slice of why our budget situation is a mess, and bound to get worse.
Nov 28, 2007 - 2:04 pm Bill Bradley:Thanks, Dana, for the specific history.
Nov 28, 2007 - 2:44 pm Dana:And in return my thanks, Bill, to you for having a site where intelligent discussion is possible.
My top 2 recall mysteries:
How was Issa convinced to not run. (Not that I think he would have done all that well, but it is obvious he spent those millions meaning to run himself–only to abruptly not file, declaring it had always been “about the principle”–yeah, right!)
Why no one exposed the implications of Schwarzenegger’s VLF cut stance until after the election. During the recall I was surprised no one put him on the defensive with questions about where the funds for local services would come to replace the lost revenue, etc.
Term limits change w/o redistricting reform is doomed (for one thing, Schwarzenegger’s support of the first is key to passage and he always made clear w/o the second he’d stay on the sidelines, and is doing just that while the poll numbers for the Nunez/Perata measure slip).
Nov 28, 2007 - 3:27 pm Ann:Raising the car tax is one of the main reasons Gray Davis got recalled!
Nov 28, 2007 - 4:51 pm richard locicero:We’ll see Bill but I don’t share you optimism about the state fiances.
Nov 28, 2007 - 7:08 pm richard locicero:We’ll see Bill but I don’t share you optimism about the state fiances.
Nov 28, 2007 - 7:08 pm Bill Bradley:The Legislative Analyst Office, which has the scary current forecast, says things will be a lot better with the state budget in a year or two.
Nov 28, 2007 - 8:24 pm Bill Bradley:1. I’ll write at some point in the future about why Darrell Issa dropped out of the 2003 California recall race for governor.
2. I think you’ve forgotten what happened with the politics of the car tax. It wasn’t Schwarzenegger’s stance, it was something that drove the recall from the get-go. That’s why Davis delayed raising the car tax for months, and tried to make it appear a ministerial decision that was not his. To no avail.
The voters insisted on the car tax cut. Which, incidentally, was Tom McClintock’s proposal.
The press covered the fiscal implications, the voters didn’t care.
That’s why I said that the hole could have been covered with a different sort of temporary tax increase.
>Dana :
Nov 28, 2007 - 8:28 pm Bill Bradley:And in return my thanks, Bill, to you for having a site where intelligent discussion is possible.
My top 2 recall mysteries:
How was Issa convinced to not run. (Not that I think he would have done all that well, but it is obvious he spent those millions meaning to run himself–only to abruptly not file, declaring it had always been “about the principle”–yeah, right!)
Why no one exposed the implications of Schwarzenegger’s VLF cut stance until after the election. During the recall I was surprised no one put him on the defensive with questions about where the funds for local services would come to replace the lost revenue, etc.
Term limits change w/o redistricting reform is doomed (for one thing, Schwarzenegger’s support of the first is key to passage and he always made clear w/o the second he’d stay on the sidelines, and is doing just that while the poll numbers for the Nunez/Perata measure slip).
Nov 28, 2007 03:27 PM
Incidentally, NWN passed 45,000 comments sometime in the past week.
Dec 3, 2007 - 10:23 am