August 24, 2003
OP-ED CONTRIBUTORPity the Winner
By LOU CANNON
UMMERLAND, Calif.
Gray Davis, the Democratic governor of California, may well become only the second governor in the nation's history to be recalled, but the election that removes him may well be a lose-lose-lose proposition for the state's Republican Party.
There are several ways the Oct. 7 vote could set back the Republicans. The least probable is for the detested Mr. Davis to beat the recall. The party would also lose if Mr. Davis is replaced by another Democrat, most likely Lt. Gov. Cruz Bustamante, who is running just behind the Republican Arnold Schwarzenegger in the polls.
But given the state's fiscal situation, and the tough medicine needed to rectify it, the Republicans could also lose by winning. Based on current budget assumptions, California faces an $8 billion shortfall next year — and even that figure seems ludicrously optimistic. The budget was cobbled together by a combination of rosy economic estimates and a series of fee increases, payment deferrals and borrowings that dropped California's credit rating into the cellar.
This wealthy state, with a budget larger than all but five countries, is now less credit-worthy in the eyes of Wall Street than Mississippi. No matter who wins, restoring the state to fiscal health will require painful measures — reductions in social services, increases in higher-education tuition and new taxes. In the end, the recall election looks like a trap: whoever ends up governor could quickly end up as unpopular as Mr. Davis is now. And no matter who wins, there will be another gubernatorial race in 2006.
Should a Republican win, then what next? Probably he would do what California Republicans always do in a crisis: look to their icon, Ronald Reagan. However, this time it should be the actual Governor Reagan, not the mythical creature California's conservatives have constructed over three decades. The party has for too long lived in denial of Mr. Reagan's pragmatic, centrist record in Sacramento. And the consequences of this approach are evident.
The state's Democrats, despite Mr. Davis, remain in an overhelmingly strong position. Senator Barbara Boxer is favored to be re-elected in 2004, and her fellow Democrat in the Senate, Dianne Feinstein, is the most popular politician in the state. Democrats have a deep bench of promising gubernatorial candidates for 2006, starting with Attorney General William Lockyer. Republicans hold no statewide office and lack a recognizable leader.
This is a startling turnabout for a state that was once a reliable Republican bastion. In the century before Mr. Davis took office, only three Democrats had served as governor. Beginning in 1952, Republican presidential candidates carried California in all but one election for four decades. This all changed in 1992, when Bill Clinton routed President George H. W. Bush in California. In the two subsequent presidential elections President Clinton and Al Gore carried the state handily. Mr. Davis was elected governor in 1998 and re-elected last year despite his unpopularity.
The Republican decline is often blamed on demographics. After the aerospace-industry implosion triggered a prolonged recession in the early 1990's, many middle-class whites fled California (in the process transforming neighboring Nevada from a Democratic to a Republican state). Meanwhile, Latinos registered in record numbers, spurred by a 1992 initiative that denied educational and medical benefits to illegal immigrants.
Demographics in themselves, however, do not account for the plight of the California G.O.P. Traditionally, recurrent defeats encourage political parties to become more inclusive. The state's Republican Party, however, remains firmly in the hands of social conservatives who have set themselves against the majority of Californians, who favor liberalized abortion laws, legalized marijuana and gay rights. Republican leaders have marginalized party moderates, like the former Los Angeles mayor Richard Riordan, who agree with any of these positions.
The touchstone issue on which California Republicans solidly reflect voter sentiment is in their opposition to tax increases, a position they see as Ronald Reagan's legacy. Yes, Mr. Reagan was elected governor in 1966 after promising to "squeeze, cut, and trim" the budget, and he made some trims, to be sure. But he balanced the deficit he had inherited the old-fashioned way — by raising taxes.
In the first week of his governorship Mr. Reagan proposed a $1 billion tax increase, then the largest tax hike ever sponsored by any governor of any state. It was a relatively progressive proposal, too, imposing higher rate increases on banks and corporations than on individuals. The Reagan tax increase was equivalent to $5.3 billion in 2003 dollars. This year Republicans in the legislature unanimously opposed a Democratic proposal for a half-cent sales tax increase that would have raised at most $2 billion.
In addition, Governor Reagan signed a permissive abortion-rights bill that was supported by most Republican legislators. Subsequent Republican governors were similarly pragmatic. Gov. George Deukmejian defied the National Rifle Association after the Stockton schoolyard shooting and in 1989 signed legislation limiting assault weapons. Pete Wilson, confronted with a growing deficit in 1991, his first year in office, followed the Reagan example and proposed a budget that combined spending cuts with tax hikes. Republican legislators grumbled at the tax increases and Democrats at the cuts, but they passed the budget and solved a fiscal crisis.
Today California faces a more serious fiscal crisis than in the Reagan or the Wilson years. This is partly the fault of Mr. Davis, who based his budget estimates on the fool's gold of the dot-com boom. Deeply in political debt to unions representing prison guards and other public employees, he made no effort to reduce state payrolls. Bill Simon, the Republican who lost to Mr. Davis in the 2002 election and who pulled out of the recall race yesterday, has a point when he says that the governor misrepresented California's fiscal situation during his re-election campaign.
But State Senator Tom McClintock, the remaining avowed Republican conservative now seeking the governorship, is even less realistic than Mr. Davis. He resolutely opposes any tax increases in 2004 despite growing evidence that even draconian budget cuts will fail to solve California's fiscal crisis. Peter Ueberroth, another serious Republican candidate, is less dogmatic but also unwilling to acknowledge the need for new taxes. His panacea is a one-time amnesty on penalties for those who owe back taxes, which he claims would raise $6 billion.
Mr. Bustamente, at least, acknowledges that new taxes are necessary. But his proposal to raise commercial property taxes, which might accelerate the business flight from California, would require a vote of the people to change Proposition 13, the 1978 measure that slashed property taxes and has become the third rail of California politics. That isn't going to happen.
In this milieu, and in this field, Arnold Schwarzenegger is the only candidate with the potential to be realistic about California's financial situation. He isn't tied into Republican antitax ideology or beholden to the unions like the Democrats. Things seemed promising when the financial wizard Warren Buffett, a fiscal adviser to Mr. Schwarzenegger, said some higher taxes were necessary. The candidate himself sent out mixed signals at his press conference on Wednesday, saying that "additional taxes are the last burden we need" but, significantly, declining to pledge that he would never sign a budget including a tax increase.
Mr. Schwarzenegger is no Ronald Reagan, who had a political track record when he ran for governor in 1966. He may fail to survive the media scrutiny in the six weeks before the election, and he may lose votes on the right to Mr. McClintock and on the left to Mr. Bustamante. But the actor supports abortion rights and gay rights — and thus is the Republican best suited to play to the vital center.
This may be enough to send him to Sacramento. If so, he should look to the Reagan example of a balanced solution — higher taxes and budget cuts — which could rescue California and its out-of-touch Republican Party. Otherwise, a victory at the polls may mean only a short stay in Sacramento, and a quick return to the Democratic status quo.
Lou Cannon is author of five biographies of Ronald Reagan, including the forthcoming ‘‘Governor Reagan: His Rise to Power.’’
