In his latest efforts to close the staggering $26.3 billion deficit, Schwarzenegger is demanding ever-deeper cuts that Democrats say will shred the social safety net. He is even entertaining what some Democrats regard as a "nuclear option" in California politics - the suspension of Prop. 98, the landmark initiative voters passed in 1988 to ensure that 40 percent of the general fund goes to public schools and community colleges.
With the state's bond rating collapsing and banks refusing to cash state IOUs after Friday, furious critics - including Democrats and labor unions - say the California Republican is engaged in an outrageous attempt to restructure government.
"I feel that all of the things that he was not able to accomplish in 2005 - he's trying to use this budget process to do that. I really think our sole focus should be on (the current) deficit," Assembly Speaker Karen Bass, D-Baldwin Vista (Los Angeles County), said after refusing to show up at a budget negotiating session with the governor Monday.
Teachers plan ad campaign
This week, the California Teachers Association union, a powerful and well-funded force in state politics, is expected to start a statewide ad campaign to fire back at Schwarzenegger.
But the governor, who has felt the wrath of the state's powerful unions before - including the CTA, which put millions into defeating his 2005 reform measures - this time appears unmoved.
He's emboldened, insiders say, by internal polling showing his approval rating has risen as much as seven points in the last month, an indication voters are behind him - as are members of his own party.
"The labor folks are on the defense to a much greater degree than I've seen, pushing for tax increases when the people oppose them ... and their ad campaign is about pressuring Democrats to go along," said state Republican Party Chairman Ron Nehring. "We're united behind the governor 100 percent."
Schwarzenegger's recent resolve may be a product of his short political timetable: He cannot run again because of term limits, but he is keenly concerned about his legacy - and eager to put reform measures like an open primary and a rainy day fund before voters.
"What's different this time is that there's not another election in front of him," said GOP strategist Rob Stutzman, Schwarzenegger's communications director during the 2003 recall campaign. "The governor has the luxury of now being able to engage where he thinks the voters are and on what he thinks needs to be done."
Others say immediate concerns are driving the agenda.
Balancing the budget
"The line in the sand for Arnold Schwarzenegger is balancing the budget ... the job has got to be done," said his longtime adviser and former communications director, Adam Mendelsohn.
"Gov. Schwarzenegger is not focused on what special interests are putting up what ads," he said. "The governor believes, at the end of the day, whether it's Republicans or the CTA or SEIU (Service Employees International Union), they all want to do the best for California. But he has his position on how to solve this problem."
In a recent interview with The Chronicle, Schwarzenegger acknowledged his keen awareness of polling when he noted that making government more efficient would be a critical component in winning back the trust of voters who soundly rejected his budget-related ballot measures in the May 19 special election.
"They voted against the (measures) ... why there are low approval ratings is because people felt that not everything that needs to be done here in these buildings is done," he said, adding that voters were essentially saying, " 'You've got to show me first you've scrubbed the whole thing - make government more efficient. Then come to us.' "
Schwarzenegger said that without such structural changes in state government, he believes he wouldn't be able to think about asking voters again to approve broader reforms.
"You've got to fix things and you've got to show them (voters) that we have done good work for them to want to be a good partner again," he said.
Economy hurts
Barbara O'Connor, a professor of political communication at Cal State Sacramento, and a member of a teachers' union for 35 years, says this week's wrestling match between the governor and legislators underscores how Schwarzenegger's hand has at last been forced by an uncontrollable adversary - the economy.
"He doesn't have a choice," she said of the firestorm over his suggestion last week that Prop. 98 be suspended. "If your goal is long-term reform of the system ... you have to look at it."
O'Connor said teachers union members are "livid" - and feel betrayed - over the calls for cuts, especially after the union went out on a limb to support the governor's May ballot measure, Prop. 1A, which would have limited spending and increased the rainy day fund, but which went down to defeat.
But the emergence of Schwarzenegger as strongman isn't such a surprise ending, she said.
"The economy has gotten worse," she said, "and all bets are off."
This article appeared on page A - 1 of the San Francisco Chronicle
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