Capitol Whispers

By Anthony York

What if?

Gov. Schwarzenegger has labeled 2005 the "year of reform." He says so in his speeches. The backdrops when he gives those speeches are dotted with "Year of Reform" logos. But as of this writing, 2005 seems to be the year of confusion and political uncertainty.

No longer is the debate in Sacramento about this year’s budget. It has devolved into a titanic political struggle between interests who support the governor, mostly business groups, and those who oppose him, namely the state’s largest labor unions. But after days of lucrative fundraising, and some bad headlines for the governor, questions about the special election — and whether the governor will actually call a November election — are more prevalent than ever.

Schwarzenegger himself has sent mixed messages about whether or not he is committed to a special election this year. He says he would rather see a compromise worked out in the Legislature on issues like changing the state’s political map-making process, education policy and changing the state’s pension system, even as he takes to the streets to rally support of ballot initiatives dealing with all three issues.

The confusion and uncertainty among the governor’s allies and foes alike is palpable. Just walk through the Capitol, and ask a random sample of people whether they think there is going to be a special election this year. You’re liable to get a majority of shoulder shrugs to go along with about an even number of Ayes and Nays, with Democrats and Republicans split among all three responses.

By flirting with a special election, the governor has set some colossal political forces in motion. First and foremost is the formidable campaign funding apparatus at his disposal. Led by the Citizens to Save California Committee and two committees under the governor’s personal control, Californians for Schwarzenegger and the California Recovery Team, the governor has already earned millions toward a final goal of at least $50 million.

Other contingency groups which may or may not be part of the direct package have also ginned up, including massive fundraising efforts by major drug companies. As our story on Page 1 of this newsletter notes, drug companies have already raised millions in support of three initiatives for the potential special election ballot, and they show no signs of slowing down.

On the other side, the service employees unions, the California Teachers Association and prison guards have ramped up their own fundraising and political operation. Many Democrats feel emboldened by the last week’s headlines. They feel that teachers, nurses and firefighters protesting the governor at every political stop are beginning to score political points, and help diminish the Schwarzenegger mystique.

Sacramento political types, being the impetuous Nervous Nellies that we are, have taken this week’s news as a sign that the governor may not want a special election after all.

It is times like this where a deep breath, and some perspective, become important. Are the governor’s protesters only scoring points among state political junkies inside the Business Loop, or is the real world beginning to take notice as well? Recent polls show that Democrats are beginning to sour on the governor, but he still enjoys the highest popularity rating of any politician in the state.

The governor is nothing if not unpredictable, and that’s what makes this special election drama so intriguing. With tales of back-stabbing, finger-pointing and discord among Democrats and Republicans alike, it begs the question: Is this all part of a masterful political chess game deliberately set into motion by the governor, or has the concept of a special election become a political Frankenstein on the verge of careening out of control?

Imagine for a moment that there is no special election. What if the governor and unions are able to come to agreement on some easy pension reform components — like putting an end to one-year pension spiking, and placing some curbs on disability benefits for people who continue to work? Imagine also they come to a deal on redistricting that puts it off until sometime after 2006, and a deal on education policy is also struck.

In that scenario, the governor would run the risk of alienating many legislative Republicans, something he has shown a willingness to do in the past. But he would also pull the rug out from under the auxiliary interests, like drug companies, fiscal conservatives who want a real limit on state budget spending, and others who want to limit the political influence of labor unions. Could the governor simply put the genie back in the bottle?

Maybe, and maybe not.

On the other side, Democrats see this potential special election as an opportunity to damage the governor before his reelection in 2006. Imagine that he goes ahead with the proposals, and they’re all defeated at the polls. How do you still claim to be the people’s governor if the people have rejected your reform agenda? And what would such a defeat do to the governor’s reelection hopes? If that is the case, do they have an incentive to cut a deal with the governor?

Schwarzenegger is coming under increasing criticism for his record-breaking fundraising. Much of the money he has raised comes from interests who have business before the state Legislature. Many of those interests are pining for this special election, and are ponying up big bucks in hopes that the governor goes ahead.

But what if the governor banked all that cash, and decided not to go ahead with the election after all? He could cut a deal with Democrats, move back to the center by alienating his fellow Republicans, and many of the big business groups that have funded him up until now.

In such a scenario, Schwarzenegger would once again become the bipartisan dealmaker, and be perfectly positioned for 2006, allowing him to show the people of California that, while he took big bucks from big business, he truly is a politician that can’t be bought. Of course, he’d have all their money in the bank, ready to go for 2006. He’s already locked up the state party’s endorsement. Republicans have nowhere else to go.

That scenario is far-fetched, perhaps, and it would anger many of the governor’s closest political allies.

It would also be vintage Schwarzenegger.


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