Is Arnold in trouble?

Californian politics

Apr 14th 2005 LOS ANGELES
From The Economist print edition

Crunch time for California's governor—and also for his dysfunctional state

IS THE weight of politics proving too much for the former Mr Universe? In the past few days, Arnold Schwarzenegger has backed away from his pledge to privatise California's state pension system; abandoned part of his plan to reform the prison system; and been cast by a barrage of television ads from teachers, firemen and nurses as a promise-breaking plutocrat in hock to big business. Meanwhile, the governor's approval ratings have dropped (down to 49% in a new poll of voters from San Jose State University), and his politically astute wife, Maria Shriver, has just confided to her friend Oprah Winfrey—and the 6m or so households tuning in—that she “wants him back home”.

Clearly the boss of America's most populous state is in trouble. The question is how much. The answer will matter well beyond California. Mr Schwarzenegger was a star at last year's Republican convention in New York and campaigned effectively for George Bush in Ohio (home of “The Arnold Classic” for body-builders). Even if a constitutional amendment to let foreign-born Americans be president still looks something of a daydream, his electorally seductive mix of fiscal conservatism and social liberalism makes him a powerful force for moderation in his party.

Perhaps the dreaming lulled everyone, especially the governor, into over-confidence. Back in blustery January, in his state-of-the-state address, Mr Schwarzenegger vowed this would be a year of reform for a state used to living beyond its means. If Sacramento's Democrat-dominated legislature refused to play ball, he would call a special election (November 8th is its presumed date) and ask the voters to approve four constitutional amendments: across-the-board spending cuts would be imposed if the lawmakers and the governor could not agree on a balanced budget; public employees' pensions would be switched from defined benefits to defined contributions; good teachers would be rewarded with extra pay; and the redistricting of political constituencies would be taken out of the hands of the politicians and into those of an independent panel of retired judges.

“Blowing up the boxes” of California's dysfunctional government is not, alas, that easy. Last week, the governor was forced to retreat on pension reform: his proposal is now being redesigned. And his will to push through the other three initiatives has been further questioned by his decision to give in to the prison guards' union and to send parole violators back to prison rather than into drug rehabilitation programmes or home detention.

As Sherry Jeffe, a political scientist at the University of Southern California, points out, “his bending on the pension initiative sends a message to the protesters not to call their protests off.” The teachers duly went on parade this week, with banners denouncing both merit pay and the governor's plan to stop the “auto-pilot” spending increases given to education by Proposition 98. Why does the once sure-footed governor seem so clumsy?

One explanation is that the Sacramento Democrats are no longer “girlie men”, easily intimidated by the Schwarzeneggerian brand of populist politics. Instead, they are gearing up for next year's statewide elections. Phil Angelides, the state treasurer, challenges Mr Schwarzenegger at every opportunity (“The governor's pension-privatisation scheme now sits in its rightful place—the rejection pile of bad ideas.”). Almost as combative is another aspiring governor, the attorney-general, Bill Lockyer. Indeed, it was Mr Lockyer, whose duties include giving ballot initiatives their title and summary, who sabotaged Mr Schwarzenegger's pension project by claiming it would eliminate death and disability benefits for the state's firemen, police and other public employees (something that the Schwarzenegger team disputes). Mr Lockyer may also be able to sink the balanced-budget initiative by frightening parents into thinking it would mean much less cash for schools.

There is, however, a second explanation. The governor—for all his carefully staged “town-hall” meetings, coffee-shop visits and shopping-mall walkabouts—has misjudged his power to shape popular opinion. In particular, Mr Schwarzenegger has paid too much attention to the conservative minority in his left-leaning state: witness not just his backing for the loathed Mr Bush but also his steadfast refusal to raise taxes. His approval rating among Republicans remains high—84% in a Field poll in February, compared with 89% in May last year—but it has slumped among both Democrats (from 48% to 34%) and non-partisans (from 58% to 48%).

The Democrats have also found other holes in Mr Schwarzenegger's armour. It smacks of hypocrisy when the governor denounces his opponents as “special interests” and yet raises millions from business lobbies. And they have begun to use the governor's macho language against him. It was probably not wise for a multimillionaire movie star with a record of groping women to promise to “kick the butts” of nurses campaigning for better nurse-patient ratios.

Mr Schwarzenegger has to decide by June 13th whether to push ahead with the November ballots. The more optimistic Democrats think they will not just bully him out of that; they can also force Mr Schwarzenegger to do a “Jesse Ventura” and not run again next year (Minnesota's wrestler-turned-governor served only one term). Arnold will listen to Maria and go back to Santa Monica, where he can boast about his early triumphs (passing a first stab at budget reform and then workers' compensation reform) and moan about the intractability of Californian politics.

In public at least, Mr Schwarzenegger is hanging tough. He is attempting to turn his pension-plan retreat into some sort of political advance: “I have always said that I am the people's governor, which means that I will listen to the people.” He will refine the language to protect death-and-disability benefits and then, failing a deal in Sacramento, take that initiative to the people later—probably in June 2006.

Room exists for compromise between the governor and the legislature that would allow him to get most of what he wants without going through an expensive special election. Why not, for example, fudge the argument over merit pay for teachers by establishing new guidelines for tenure? Why not agree to independent redistricting—but on the basis of the 2010 census, rather than Arnold's goal of 2006? Why not lessen the doubtful appeal of compulsory across-the-board spending cuts by agreeing to less restrictions in the 2005-06 budget due in June?

There is a precedent for this. Last year, Mr Schwarzenegger got through his workers' compensation reform by threatening to take his scheme to the people; the Democrats caved in in exchange for some last minute concessions. But that was partly because they had just seen the governor force through two budget-balancing initiatives. Everything depends on the credibility of Mr Schwarzenegger's threat—and that turns on two hard-to-measure things.

The first is the appetite of Californians for reform. In a state where government is seen as a distraction, this is hard to bank on. But some sort of reform is clearly necessary. The ongoing budget deficit in the coming year is at least $7 billion and the state's pension obligation is now $2.6 billion compared with just $160m five years ago. As for redistricting, gerrymandering ensured that not one Californian congressional seat changed hands last year.

The second imponderable is the will of the Schwarzeneggers. Following Maria's wobble on “Oprah”, the official word from the governor was that he was too involved in this “year of reform” even to consider whether he might run next year for a second term. The unofficial word is that the governor listens to his wife, but does not necessarily obey her (she did not want her husband to run in 2003 either).

Mr Schwarzenegger is an odd mixture of determination and superficiality. It is hard to write off the scrawny Austrian youth with an unpronounceable name who transformed himself into America's best known hunk. But he still tends to treat politics as an extension of the entertainment industry—staged meetings with the audience, softball questions from Vanity Fair and the rest of it. At some point in the late 1960s—most probably when he faced down student demonstrators—Governor Ronald Reagan stopped being thought of as a former movie actor and started being seen as a politician. Mr Schwarzenegger is reaching a similar point now.

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