The governor’s offices are called the Horseshoe, as they occupy three sides of an open-air atrium on the ground floor of the capitol. The legislators’ offices are on the five floors above. Protocol called for the governor to stay put and for lawmakers who wanted to see him to make the trip downstairs. That wasn’t my way. I often left my office and took the elevator to the upper floors to call on the legislators myself. Being in movies actually provided a great opening: a lawmaker might not know what to make of me as governor, but his staff would want to take pictures with me and would ask for autographs to bring home to their kids. If a lawmaker felt intimidated that I really might be the Terminator—it’s funny how literally people take these movie roles—I wanted him to think of me more as the open-minded Julius in Twins .
I’d promised the voters that I would deliver results fast. Within an hour of being sworn in, I canceled the tripling of the vehicle registration fee and, soon after, with the help of the legislators upstairs, got rid of the law allowing drivers’ licenses for illegal immigrants. “Now, that’s what you call action,” I told the cameras. Within two weeks of taking office, I put before the legislature the financial-rescue package on which I’d based my campaign—including a refinancing of California’s debt, a sweeping budget reform, and a reform of the workers’ compensation system that was driving employers out of the state. We were pushing for a “hard spending cap” as the anchor of my budget reform proposal. That was where the Democrats drew the line, and soon we were headed for war. When talks with the Democrats broke off, I got lots of advice from across the political spectrum, most of it contradictory.
The Republican veterans of Pete Wilson’s administration who were on my team urged me to take a hard line: put all my reforms on the ballot for the voters to consider next year. Republican legislators were gleefully putting on war paint and suggested we let the state government run out of money and shut down until the Democrats caved. I was feeling pretty bullish myself. But at a dinner that week (ironically, in celebration of bipartisanship), I put the idea to George Shultz and to Leon Panetta, the beloved California statesman who had served Republicans and Democrats and had most recently been Bill Clinton’s White House chief of staff. They raised their eyebrows.
“Is that the way you start your term, with a showdown?” George asked. “Your guys are right that you have momentum with the voters and you’ll probably win. But it will be a long, bloody fight, and what will happen in the meantime? There will be chaos, and everyone will get depressed that nothing has changed in Sacramento. California will suffer because businesses won’t have confidence to invest or create more jobs.”
Panetta agreed, saying, “It’s more important to cut a deal. Even if you only postpone the budget problems, it’s a way to show the public that you can work with both parties and make progress. You can come back later on for a fuller reform of the budget.”
I took that advice to heart. After assuming office and winning some immediate big victories using the momentum of my election, it was important to show the people that Sacramento can work together to solve California’s fiscal problems. So I went back to the capital, called the legislative leaders from both parties, and said, “Let’s sit down and try one more time.”
My fellow Republicans acted like they’d been punched in the stomach. “You have them on the ropes, go in for the kill! ” they said. This was my first real taste of the new Republican ideology that any compromise is a sign of weakness. The Democrats were relieved to avoid a huge fight, but some interpreted my willingness to negotiate as a sign that I’d rather back down from a fight than risk my popularity with voters. That made negotiations more difficult. After so many years of ugly, pointless fighting in Sacramento, both sides had lost touch with the art of negotiation. In fact, the legislative districts were drawn to elect the most partisan, uncompromising members of each party; legislators who were bred to fight, like roosters bred for cockfighting.
After many days of negotiations, we agreed on a compromise in which I got a balanced budget amendment, a ban on using bond debt to pay for operating expenses, and a weak version of my rainy-day fund. The legislators got their economic recovery money. The proposal was on the ballot in the March election and passed with two-to-one support from the voters. We completed major workers’ compensation reform just a few weeks later. That showed leadership and got us off to a great start. Refinancing the debt lifted California’s credit rating dramatically and saved the state over $20 billion in bond interest over ten years. And when the business community saw that I was able to deal with both parties, some of the gloom on the economy started to lift.
My relationship with lawmakers was now complicated, however. Part of that complication was due to the huge mismatch in popularity between me and them. As I proved that I could get things done, my public approval rating shot up into the seventies while the legislature’s was down in the twenties. I was being lionized as the “Governator,” not only in California but also in the national and international media. In a presidential election year, journalists speculated about me as a future contender, although that would require a change in the Constitution that nobody really expected. My numbers stayed high all year, right through the November 2004 election, when California’s voters backed me on every ballot initiative on which I took a position. The most dramatic of these were measures to stop “shakedown” lawsuits against businesses and the landmark stem cell initiative, in which we put up $3 billion for groundbreaking scientific research after the Bush administration restricted federal funds. We also shot down two initiatives that would have increased the already outrageous privileges of the Indian gaming tribes.
I was making such a splash that Republican leaders asked me to help in the push to get President Bush reelected. They invited me to give the prime-time keynote address at the Republican National Convention. Never mind that I was much more of a centrist on most issues than the Bush administration, which had shifted more and more to the right. They knew I could attract attention.
So on the night of August 31, I stood at the podium at Madison Square Garden—my first time in the spotlight there since my victory as Mr. Olympia thirty years before. Except that back then, it had been in front of four thousand fans in the Felt Forum. Tonight it was fifteen thousand cheering delegates in the main arena, in prime time on national TV. Maria, who in years past would have been an NBC correspondent covering the convention, sat with the kids next to the elder George Bush. Every time the cameras looked for his reaction, she was captured smiling in the shot. I was touched by what a team player she was that night.
My heart was pounding, but the cheering crowd reminded me of winning Mr. Olympia, which had a calming effect. As I began to speak and heard them respond, I felt like it was no different than posing. I had them in the palm of my hand.
I’d prepped for this appearance more intensively than any in my life. The speech had been revised and revised, and I’d practiced it dozens of times, doing my reps. It was a pinnacle of my life.
“To think that a once scrawny boy from Austria could grow up to become governor of the state of California and then stand here in Madison Square Garden and speak on behalf of the president of the United States—that is an immigrant’s dream,” I told the crowd.
My favorite part of the speech was an incantation on “how you know if you are Republican.” If you believe that government should be accountable to the people, if you believe that a person should be treated as an individual, if you believe that our educational system should be held accountable for the progress of our children—those were some of my criteria. I wrapped up with an appeal to return George W. Bush to the White House for another term and led the convention chanting, “Four more years! Four more years.” The speech brought wild applause.
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