“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,
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.
Eunice and Sarge, who had watched it on TV, joined Maria and me for breakfast at the hotel the next morning. Eunice had really gotten a kick out of my inclusiveness theme. “The way you made it sound,
Back in California, my political opponents tried to portray me as a bully in part because of my popularity. But I went to great lengths to charm the legislators during that first year and encourage them to work with me. I’d call their mothers on their birthdays. I’d invite them to schmooze in my smoking tent in the atrium outside my office. The tent was the size of a cozy living room, furnished with comfortable rattan chairs, a glass-topped conference table with a beautiful humidor, lamps, and an Astroturf floor. Photographs hung along the walls, suspended by wires from the metal framework. I’d set up the tent so that I would have a place to smoke my stogies (since smoking is forbidden in California’s public buildings), but people nicknamed it my deal-making tent.
I paid special attention to leaders like John Burton, the president pro tempore of the state senate, and Herb Wesson, the assembly speaker. John was a crusty San Francisco Democrat who had actually boycotted my inauguration. He wore round wire-rim glasses and had a bushy white moustache. The first time we met, he was barely willing to shake hands. So I sent flowers. Once we got to know each other a bit, it turned out that we had things in common. He knew a little German because he’d been stationed in Europe in the army. (He was fascinated by the great nineteenth-century Austrian diplomat Metternich.) Often we disagreed, especially in the beginning. But eventually we found that our views were similar on major social issues like health insurance and foster care, and we got to a place where we could say, “Forget the big fighting in public; let’s find things we can work on.” We became effective collaborators and even friends; he’d drop by the tent sometimes just to bring me apple strudel and
Herb Wesson, the assembly speaker, was an easygoing five-foot-five guy from LA who would tease me about whether I was actually six foot two, like my bio says. I teased him back by calling him my Danny De-Vito and sending him a pillow so he could sit taller in a chair. I didn’t get to know him as well as I got to know John, because he was nearing his term limit. His successor, a smart ex-union leader named Fabian Nunez, also from LA, would in time become one of my closest allies among the Democrats.
I also formed a solid relationship with the new minority leader of the assembly, Kevin McCarthy. He was a high-energy thirty-nine-year-old from Bakersfield whose district included Antelope Valley, where my supersonic airport would have been. Kevin got his start as an entrepreneur who opened his first business, a sandwich shop, at age nineteen to help pay for college, and we clicked as fellow businessmen. He’s now the majority whip of the US House of Representatives.
Turning on the charm with the lawmakers helped get my reform ideas into the legislative debate and produced some agreements that were an important start. But after trying a bunch of different maneuvers, I found that what gave me by far the greatest leverage was the ballot-initiative process. Because of my big approval ratings, I could threaten to go directly to the voters and thus pressure the legislature to do things they wouldn’t do otherwise.
That was how we ended the abuse of workers’ comp. I’d made it one of the top issues in my campaign, because it was poisoning our economy and driving businesses out of state. As in every state, employers in California
