Was the Austrian Oak Cut Down To Size?


Gov. Arnold Schwarzenegger won't leave office for another five months, and I've already got breakup remorse.

Time and again, Reason has criticized the Gubernator. Time and again, I have criticized the Gubernator. But as he closes out his time in office with yet another budget cage match against the Democrats and their union backers, I feel honor-bound to present the case for Gov. Schwarzenegger. Here are some details I collected while working on an upcoming print column:

While government grew under Arnold, it didn't grow quite as fast as usual. According to the state controller's office, the total number of state employees under the discretion of the governor (i.e., not including legislative aids, University of California system employees, prison guards, etc.) is 237,654 right now, up from 222,866 in 2004, the first full year of Schwarzenegger's administration. That's about a 6 percent increase over six years.

Similarly, general fund spending, which was $71 billion in 2003, was is now around $86 billion — a relatively modest 21 percent increase over seven years. Considering net population growth that's still around 400,000 people a year, you might even make the case that general fund spending is about where it was when he took office. In keeping spending down, the governor has been a major beneficiary of the recession, which allowed him to make actual reductions in 2008 ($11.4 billion), 2009 ($31 billion) and probably 2010 (a projected $12.4 billion).

"If I were making the limited-government case for the governor, I'd probably brag about the spending," says Joe Mathews, author of California Crack-Up. "I just don't think that's a case he wants to make. I don't think there was some grand plan in the way he kept spending increases down. As a governor he's got a better record than Jeb Bush or Sarah Palin, but he doesn't want to talk about that."

In politics, the discretionary stuff is always the easy part, but Schwarzenegger also tried—and spectacularly failed—to challenge the power of public sector unions and roll back the crushing entitlements they have locked in. His 2005 slate of ballot initiatives—which I found underwhelming at the time—nevertheless threw a lot of light on the outsized political power of government employees.

On this and other battles with the unions, Schwarzenegger generally got his ass handed to him. But as Conan would say, all that matters is that two stood against many. David Crane, Schwarzenegger's advisor for "Jobs & Economic Growth," has made serious efforts to push back against the power of public employees—or at least give future Republicans and Democrats the opening to stand up.

"Once you get the voice to say no, it becomes easier the second time," says Marcia Fritz, president of the California Foundation for Fiscal Responsibility. "He's giving the Democrats the chance to say no to the unions."

Fritz sees good things coming in Schwarzenegger's likely veto of Assembly Bill 1987—the anti-pension-spiking bill that has now become a pro-pension spiking bill—and in the governor's refusal to strike a deal on this year's budget unless it includes permanent changes to public sector pension structures.

"What happens in California is going to emanate throughout the country," says Fritz, who has been a pension hawk for many years and is optimistic that the depth of the crisis creates room for change. "We've got the worst combination of everything. It's not like Illinois where they mismanaged and overspent. We tried to manage and we still can't make it."

I will have more on all this in the upcoming print column. For now,  while I can no longer say I'm a Schwarzenegger admirer, I'm still a fan. I have endured plenty of meetings with governors, generals, CEOs, senators and the current president of the United States, and by far the most engaging of them all—the only one of whom I can say "I'd still buy a ticket to see this guy"—was Arnold Schwarzenegger. In retrospect it's stunning how little his charisma helped in his fights against the state's political Integral. But I wish him luck in his last battle with the unions. It's the right fight against the right enemy, and it may yet turn out to be happening at the right time.

And finally, the ramping up of the Jerry Brown-Meg Whitman campaign makes one thing clear: No matter how bad Schwarzenegger was, his successor will be worse.