Thu, Jul 09, 2009 - Page 9 News List

Schwarzenegger legacy entwined with fiscal crisis

By Juliet Williams  /  AP , SACRAMENTO, CALIFORNIA

California voters gave California Governor Arnold Schwarzenegger a single, blockbuster-sized mission when they sent him to Sacramento six years ago in an unprecedented election: Fix California’s chaotic budget system, once and for all.

Today, California is unable to pay its bills and Schwarzenegger finds himself mired in the worst financial crisis in decades and in a race against the clock to deliver on his promise to “end the crazy deficit spending.”

In less than six months, the Republican governor will enter his final year in office and become a political lame duck, as attention begins to focus on his potential successors. That gives him little time to dig California out of its deep financial hole and enact the lasting budget reforms that he had hoped would shape his legacy.

The country’s most populous state, responsible for 12 percent of the nation’s gross domestic product, is saddled with a US$26.3 billion deficit, has started issuing IOUs for the first time in two decades, is burdened with the lowest credit rating of any state and is seeing unprecedented joblessness and a decline in personal income.

To Cynthia Sterling, president of the Fresno City Council, the fault for California’s financial mess lies squarely with the governor. A moderate Democrat, the type of centrist Schwarzenegger has been courting for years, Sterling shared the stage with the Republican governor in the past to show bipartisan support for his initiatives.

Today, she believes Schwarzenegger has talked a good game but failed to follow up the rhetoric with decisive action.

“He made poor decisions and did not include those of us who were in the know,” she said. “We’re in real financial crisis because of this governor.”

That October night in 2003, when Schwarzenegger rode his global celebrity to victory and he and his wife, Maria Shriver, waved to thousands of admirers amid a blizzard of confetti, seems like an eternity ago.

Schwarzenegger still draws autograph-seekers, to be sure, but only a third of voters approve of his job performance, polls taken this spring showed, before the state’s fiscal crisis had deepened to the point of issuing IOUs.

He seemed surprised last month by the hostility of an audience in Fresno, typically a conservative bastion that has been welcoming to Schwarzenegger throughout his tenure. This week, he was met with boos from state workers protesting his proposed budget cuts as he left a press conference at the state Capitol.

Even his famous gags have fallen flat as the state sinks deeper into financial chaos. He sent the Democratic leader of the state Senate a metal sculpture of bull testicles as a lighthearted way to convey fortitude during the budget negotiations. The lawmaker promptly returned the gift with a terse note saying the cuts Schwarzenegger planned to make to the poor, frail and low-income college students were no joke to him.

“It’s not like Arnold came into this situation looking for a US$25 billion deficit to cut. Nobody does,” Shriver said recently. “People come in because they want to do good and they want to grow a state and transform a state and help it grow.”

That Schwarzenegger finds himself stuck in a financial crisis even worse than the one he inherited is not entirely his fault. He reminds crowds during budget addresses around the state that the worst recession in decades has incinerated wealth everywhere and has hit California especially hard.

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