In late September, California Gov. Arnold Schwarzenegger stood on the shore of Treasure Island in San Francisco Bay, with the city's skyline at his back and all the accoutrements of glory arrayed at his feet. More than 100 flags, representing nations around the world, fluttered at his right; to his left, a satellite feed flashed a 10-foot-tall video image of British Prime Minister Tony Blair. Gavin Newsom, the Democratic mayor of San Francisco, and New York Republican Gov. George Pataki stood to the side as Schwarzenegger signed a bill committing California to reducing greenhouse gas emissions and mounting a historic challenge to the problem of global warming.
The law capped months of liberal legislation signed by the governor, a remarkable lurch to the left from a man who just nine months earlier had been the dark villain of every Democrat's dreams, the least popular politician in California. But thanks to a surprisingly clever strategy of triangulation and politicking, Schwarzenegger has skyrocketed in the past year from a 6-point deficit to a 17-point lead over his Democratic opponent for governor, Phil Angelides, in the 2006 race for governor. Even Assembly Speaker Fabian Núñez, one of Schwarzenegger's bitterest foes last year, applauded on Treasure Island as the governor boasted of his latest accomplishment.
"We will create a whole new industry that will pump up our economy," Schwarzenegger said, "a clean-tech industry that creates jobs, sparks new cutting-edge technology, and is a model for the rest of the nation and the rest of the world. And because of my great partners in the Legislature, that is exactly what we are doing with this bill."
Dozens of dignitaries on Treasure Island watched Tony Blair praise the governor and take a mild slap at Schwarzenegger's fellow Republican, a certain White House tenant who doesn't share their thoughts on the subject.
"You are showing brilliant leadership that will inspire and excite a lot of people worldwide," Blair said. "If we can get the leadership not just from countries that have been traditionally very strong on this issue, but from states from within the United States of America as well, and hopefully in time from the whole of America -- if we can get that leadership, then this has enormous possibilities."
The ceremony was so perfectly timed to buttress his surging reelection campaign that Schwarzenegger immediately flew down to Southern California to stage it all over again.
This was a staggering change in fortune since the fall of 2005, when just 31 percent of Californians approved of the governor's performance. Schwarzenegger spent every dime of his political capital in a populist campaign to pass four ballot measures that would have radically remade state politics; voters rejected all of them in a personal repudiation of the movie-star governor. He was deeply -- many thought fatally -- humiliated.
Within months, Schwarzenegger had embarked on a remarkable comeback. The governor's vulnerability forced him to work with opposition leaders and build a record of accomplishment on which he could run for reelection. Schwarzenegger and the Democratic Legislature balanced the budget on time and passed bills raising the minimum wage and pressuring pharmaceutical companies to offer drug discounts to poor people. They put on the November ballot an ambitious plan to spend $37 billion on public works projects that would prepare California to handle the next 40 years of growth. If voters approve it, California would spend billions of dollars on new schools, low-income housing, highways, flood control systems for the vulnerable Central Valley, and public transportation projects -- an enterprise that would dwarf anything the state has seen in the previous 30 years.
Schwarzenegger was utterly broken 12 months ago. He faced a divided state government and had to learn the virtues of compromise, as he and the Legislature held one another accountable. Thanks to the exigencies of power sharing, and a surprising upturn in the state's economy, he and his Democratic opponents both became better stewards of state government. In the process, Schwarzenegger resurrected his career and is virtually guaranteed another four years this November.
The Bush administration and congressional Republicans would do well to look to the Golden State. With midterm Election Day just weeks away, they are about to discover the hazards and hubris of not having to share power. The men who gorged themselves on earmarks and K Street veal while New Orleans drowned are on the verge of becoming a minority party. But if this is a bitter pill, it will do them, and the country, a world of good to swallow it. Like Schwarzenegger, they may well rediscover fiscal restraint and government accountability, because the dynamics of divided government demand it. Schwarzenegger learned humility, and both he and the state of California are better for it. If the Republicans lose next month as predicted, congressional Republicans may be about to undergo the same process -- but only if they unlearn the last six years.
It's hard to overstate the extent of Schwarzenegger's catastrophic defeat last year. He dreamed up four laws to cut back on labor union contributions to political campaigns, remake the redistricting process, give the governor more power over the budget, and make it more difficult for teachers to secure tenure. At his State of the State address, he ordered state legislators to enact his ideas and threatened to put them on the state ballot if they didn't comply.
"The people of California demand reform," he said. "If we here in this chamber don't work together to reform the government, the people will rise up and reform it themselves. And I will join them." By Election Day, the people had spoken, and Schwarzenegger was so badly beaten that Assembly Speaker Núñez called on the governor to personally apologize to the voters.
But the governor, whose campaign staff did not respond to a request for comment, immediately turned on the charm, taking responsibility for the disaster. He even joked, "I should have listened to my wife," Kennedy family doyenne Maria Shriver, who privately opposed his reforms. He hired Susan Kennedy, a veteran in Democratic Party circles and former aide to his predecessor Gray Davis, as his chief of staff. He co-opted the ideas of the same Democrats he had fought so fiercely, calling for tens of billions in bond measures to repair and improve the state's transportation and water infrastructure. The measures were so extravagant that state Republicans balked at first, threatening to scuttle the new Schwarzenegger's dream. But by May, the governor and both sides of the Legislature agreed to put their bold public works project on the ballot.
This was a particularly clever calculation. While his would-be Democratic opponents, Angelides and Steve Westly, ripped each other apart in a brutal primary election, Schwarzenegger was crafting a bipartisan record of accomplishment, staying above the fray and projecting a sunny, alpine optimism. Many state Republicans grumbled that Schwarzenegger had abandoned their fiscal conservatism, and the party refused to endorse two of his bond measures. But significantly, the party did endorse his highway and flood control bonds. Just as Schwarzenegger bowed to the realities of governing a fundamentally blue state, party leaders realized that they had no choice but to support their incumbent. "As far as the Republican Party's concerned, he is our nominee and he is our guy," says party representative Hector Barajas. "He's done a really good job of going out and talking to people about healthcare, the environment."
It's a testament to Schwarzenegger's capacity to adapt that Republican Party spokespeople find themselves bragging about his green credentials. "The first Arnold was in 2004, and he was very embracing across party lines," says San Jose State University political science professor Larry Gerston. "Then in 2005, as things got tough, you saw Arnold 2.0. That Arnold threw down the gauntlet, said it's my way or the highway and vetoed 25 percent of the bills. He backtracked on all his previous promises, took money away from education, local government and public transportation. He managed to get everybody mad at him at the same time, which took some doing." The day after the disastrous special election, Gerston said, "you saw the birth of Arnold 3.0. And bit by bit, he made peace with all the groups that he had manage to alienate."
Of course, Schwarzenegger couldn't have done this without the help of state Democrats, who were so driven by their own ambition that they were only too happy to throw their gubernatorial candidate, Angelides, under a bus. Núñez and Senate president Don Perata, the two most powerful Democrats in California, realized that with Schwarzenegger so vulnerable after the last election, he would have to cut a lot of deals if he wanted to build a record he could run on.
In addition, it couldn't have escaped their attention that if Angelides were elected, they would no longer be the Democratic Party's chief power brokers. Not only did Núñez and Perata work with Schwarzenegger on the bond measures, they stood arm-in-arm with him at elaborate signing ceremonies. Núñez is even prone to calling Schwarzenegger "my good friend" -- and he's the vice-chair of the Angelides for governor campaign.
Schwarzenegger also built a tactical alliance with Los Angeles Mayor Antonio Villaraigosa, the most powerful Latino politician in California. Villaraigosa is widely expected to run for governor in 2010, and he'd have a hard time pulling that off if Angelides were in office. Villaraigosa significantly refused to endorse Angelides until Labor Day, well into the campaign. A few days later, Schwarzenegger signed a bill giving Villaraigosa broad new powers over the Los Angeles school district, giving the mayor a chance to reform the schools just before he runs for governor four years from now.
But it's the dozens of bills Schwarzenegger has signed in the last few months that have given him the biggest edge this election season. The California economy jolted into an unexpected growth spurt, giving state coffers an additional $7.5 billion, which Schwarzenegger spread around enough to balance the budget on time, a feat that has happened only four times in the past 20 years. He returned billions he had taken from the education budget. He signed bills lowering the cost of prescription drugs (a plan he had opposed in previous years), raising the minimum wage and, most significantly, rolling back carbon dioxide emissions. With each victory, Schwarzenegger orchestrated elaborate signing ceremonies designed to boost his public image.
"After his disastrous performance last fall, he moved from the right back toward the left, and he also came at a time when there was a sense among many in the Legislature that there was a time to get things done in California," says Democratic state Sen. Mike Machado. "That led us to accomplish some things this year that both he and the Legislature can take credit for. And the public has been willing to give credit to both."
Meanwhile, Schwarzenegger has vetoed just enough bills to keep his right wing placated. Some of these were no-brainers, such as the bills to legalize gay marriage and create a system of universal healthcare. After all, you can only ask a Republican governor to compromise so much. In fact, Schwarzenegger has consistently opposed aggressive plans to expand health coverage, and no statewide politician seeking reelection would gamble by getting out in front of an issue like gay marriage.
Other vetoes, however, reflect a die-hard fiscal conservatism that sacrifices public health and safety. In September, Schwarzenegger vetoed a $60-per-container fee on Long Beach freight shipping that would have raised $500 million for port security and for reducing air pollution in adjacent neighborhoods. Long Beach Mayor Bob Foster, who claims that his city's asthma rate is three times as high as the state's, denounced the move, telling the Los Angeles Times, "Our kids are getting asthma so someone in Nebraska can get a cheaper TV."
According to Los Angeles state Sen. Sheila Kuehl, who authored the universal healthcare bill and is one of the most liberal members of the state Senate, this is all part of a deliberate plan. "I believe he is very carefully threading his way through a great many issues, attempting to hold onto a conservative Republican base while also attempting to appear moderate enough on social and environmental issues that he can gain traction in the middle," says Kuehl, among the few Democratic legislators who express an unambiguously hostile view of the governor. "And it's so calculated that it's somewhat discouraging to see that it's working, according to the polls."
In other words, Schwarzenegger has become a standard centrist pol, with a sense of showmanship and an instinct for knowing when to buck the national party's xenophobia and religiosity, while staying true to his chamber of commerce roots. The crusading populist who thought he could remake the state with swagger and bullying is gone; these days, Schwarzenegger's theatrics are designed to distance himself from the Republicans' reactionary elements, such as the time he apologized for voting for Proposition 187, the initiative that would have denied emergency medical care to illegal immigrants.
For now, at least, Schwarzenegger is the man who cuts deals, plays his opponents off one another, and gives a little when he has to, in order to show that at the end of the day, he's a man who gets things done. And he couldn't have done any of this without acknowledging the basic reality of divided government.
Which is precisely the mistake that Republicans have been making with Karl Rove directing their electoral strategy. By focusing almost exclusively on energizing their electoral base, they have discredited themselves with voters who don't like taxes, but worry that competence is being sacrificed at the altar of ideological and religious theatrics. George Bushs approval ratings are so low now that even hard-line Republican congressmen are careful to detach their candidacy from the Bush administration, preferring to let the president raise funds for them rather than be seen with him.
Schwarzenegger has even capitalized on the appeal of reason and science. While social conservatives have mounted a war against evolutionary biology, Schwarzenegger has offered bridge financing for California's stem-cell research initiative. While fanatics babbled in tongues next to Terri Schiavo, Schwarzenegger acknowledged the basic facts of global warming and took steps to at least cosmetically confront it. As a result, he has joined Pataki and Rudy Giuliani as the most popular national Republicans, while populists in both Congress and the White House watch their approval ratings plummet.
Still, there's no guarantee that this new, sensible Schwarzenegger will last much longer. Schwarzenegger cut deals and built a better California because he had to; he was running for reelection, and couldn't make his case to the voters without a record of accomplishment. If he wins reelection as expected, many observers worry that the window of bipartisanship will have closed, and a secure, confident Schwarzenegger will reinvigorate his populist shtick, relying on his star power to bully legislators into rubber-stamping his agenda, and paralyzing California once again in the process.
And make no mistake: California faces some very serious problems that will require the same sort of bipartisanship on display this year. The state's prison system faces an unprecedented crisis. California's sentencing laws have overcrowded the correctional system with 170,000 prisoners, half of whom are nonviolent offenders. The average prison is now about double its capacity, and efforts to ease the problem are estimated to cost $6 billion. A federal judge was so disgusted by the correctional system's failing healthcare system that he put the program into receivership, and the price tag to fix the problems hovers around $600 million. Nineteen percent of Californians currently have no health insurance, and the cost in both dollars and human suffering is rising every day.
Meanwhile, the state's budget will continue to be a problem. Schwarzenegger got lucky this year with a booming economy, but the good times are almost sure to dry up, and the state faces a $4.5 billion deficit. The governor is opposed to raising taxes, but he personally campaigned for a ballot initiative that prohibits issuing bonds to balance the books. The last time he cut funding from education, he made enemies he grew to regret. Something is going to have to give.
Yes, as Schwarzenegger completes his glorious comeback and returns to the state capital, national Republicans could learn a thing or two from his resurrection. But it's entirely possible the governor will forget the lesson of his own success. "We've seen Arnold 1.0, we've seen Arnold 2.0, we've seen Arnold 3.0," says political science professor Gerston. "What will Arnold 4.0 look like?"