are required to carry insurance that pays medical expenses and lost wages for workers who are injured on the job. But in California, premiums had doubled to twice the national average. How did that happen? Mainly because the laws had been written so loosely by the Democrats that it was easy for people to abuse the system. I knew a guy who’d hurt his leg skiing one weekend. He waited to go to the doctor until after work on Monday and said, “I hurt my leg working.” When businesses challenged bogus claims like these, the worker always won. I also knew a guy at the gym who was squatting four hundred pounds. He told me, “I’m on workers’ comp leave.”
“What do you mean?” I asked. “You’re squatting more weight than me!”
“I needed to take care of my family,” he said.
Unions, lawyers, and doctors had prevailed on the legislature to relax the rules so much that an employee could play the system and get treatment for just about any ailment—not only work-related injuries—and be fully reimbursed with no cap or even a copay. This amounted to free, unlimited health care and sick leave with pay, all paid for by the private sector. It was a backdoor way for the Democrats to get what they wanted. John Burton once came straight out and told me, “Workers’ comp is our version of universal health care.” Which is another way of saying that the law was written to be abused.
I became something of an expert on the subject because Warren Buffett was in insurance, and he told me long before I ran for governor how screwed up California was. I had allies in the business community draft a ballot initiative that would put an end to this. The initiative was much tougher than parallel legislation that I supported in the legislature—it took more away from workers. But that was the strategy. If workers, attorneys, and doctors feared the initiative, they might be willing to give more ground in a legislative deal.
I sold the initiative hard. Whenever negotiations with the legislature bogged down, I’d leave Sacramento and travel the state to help gather signatures on the initiative in Costco stores.
The public found this very entertaining, and it succeeded. The Democrats and workers’ groups did get scared, and they struck a deal on legislation that would save employers big money on their premiums. The Democrats hated being threatened with an initiative, though, and they dragged out negotiations, offering a few more reforms each time I showed them a new stack of signatures we’d collected. We reached the agreement just as the number of signatures on the initiative hit the one million mark—which would have been enough to qualify it for the ballot. Applying leverage had worked. Because of our reform, within the next few years, premiums dropped by 66 percent, and a total of $70 billion went back to California businesses in the first four years.
Still, the budget itself remained badly broken. And when I sent the legislature a $103 billion proposal for the fiscal year beginning on July 1, 2004, they stalled for more than a month of pointless negotiations so that the budget was late. July 1 came and went, and then a week, and then another week. This was exactly what I’d promised the voters we’d avoid, and I suddenly remembered what those previous governors had warned me about the day I was inaugurated: you’re going to spend a lot of summers solo and sweating in Sacramento. That didn’t seem to have worked too well for them, so I took my great poll numbers and went out to the people. Speaking to hundreds of shoppers in a Southern California megamall, I made the case that our lawmakers were part of a political system that was “out of shape, that is out of date, that is out of touch, and that is definitely out of control. They cannot have the guts to come out there in front of you and say, ‘I don’t want to represent you. I want to represent those special interests: the unions, the trial lawyers.’ ”
I don’t regret having said any of that. But in the next breath, I went over the top: “I call them ‘girlie men.’ They should get back to the table, and they should finish the budget.”
Needless to say, the girlie-men line was unscripted. It was the kind of outrageous improvisation that my team always worried I was going to come up with in front of a crowd. The joke got big laughs. The crowd knew that I was alluding to the
My playful joke caused an uproar, with headlines nationwide. I got blasted for being sexist, antigay, a name caller, and a bully. The most damning criticism came from Assembly Speaker Nunez, who said, “Those are the kinds of statements that ought not to come out of the mouth of a governor.” He added that his thirteen-year-old daughter, whom I’d met and who liked me, was upset by what I’d said.
On one level, he was right. The voters had elected Arnold, and talking movie talk and saying outrageous things had helped me win. But once I got to Sacramento, I was representing the people, and I couldn’t just be Arnold anymore. I was supposed to work with legislators who are constitutionally part of the system, so I shouldn’t belittle them.
Besides, it was stupid to antagonize the legislators. When you are governor, you cannot pass legislation; you can only sign or veto legislation.
I decided I had to acquire new diplomatic skills if I wanted to accomplish big things. I would have to be more cautious in giving speeches—not just the written ones but also the statements I would deliver without notes. Of course, then I went right out and opened my big mouth again.
One of Maria’s inspirations upon becoming First Lady was to take a California women’s conference that dated back to the 1980s and transform it into a major national event. In December 2004, ten thousand women gathered at the Long Beach Convention Center for a one-day agenda on “Women as Architects of Change.” The program featured prominent women from California’s business and social-services worlds, as well as high-profile speakers such as Queen Noor of Jordan and Oprah Winfrey.
Because it was officially the California Governor’s Conference on Women and Families, it was natural for me to kick off the event. I joked that for once I got to be Maria’s “opening act.” As I began this carefully prepared speech celebrating women’s contributions to California, a group of protestors jumped up and created a commotion on the floor. They unfurled a banner, waved signs, and started chanting, “Safe staffing saves lives!”
The protestors were from the nurses’ union, and they were angry because I’d suspended a Gray Davis mandate that would have cut the standard workload for hospital nurses from six patients per nurse to five. Most of the audience in the giant hall barely seemed to notice, but the news cameras zoomed in on the fifteen chanting women being escorted away. I found their behavior really irritating. If their beef was with me, why screw up Maria’s event? Turning to the audience, I said, “Pay no attention to those voices over there. They are the special interests. Special interests don’t like me in Sacramento because I kick their butt.” Then I added, “But I love them anyway.”
Big mistake. Ridiculing the protestors embarrassed Maria, for one thing. And the nurses’ union took my words as cause for war. For months afterward, I was greeted by nurses picketing and chanting at every public appearance.
In the top drawer of my desk, I kept a list of the ten major reforms I’d promised to bring about when I ran for governor. I knew a certain amount of confrontation was inevitable because I was challenging the powerful unions that controlled the Democrats and were exploiting the state. High on that list were abuses like tenure for mediocre teachers, gold-plated pensions for state employees, and gerrymandering of political districts to protect the elected class.
Above all was the crying need for budget reform. Even though we’d finally passed a balanced budget for 2004, and the state economy was starting to revive, the system was dysfunctional. While revenues in 2005 were projected to go up by $5 billion, expenses were set to go up by
I saw our workers’ comp victory as a model. I’d used the threat of a ballot initiative to force the other side to negotiate and make a deal. So why not apply the same strategy to achieve reform on a much larger scale? I was pumped about that success, and the one we’d had on the economic recovery money. With that sense of accomplishment, during the last months of 2004, my staff and I set out to draft a whole new arsenal of ballot initiatives.
