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Arnold Schwarzenegger Will Run for Governor of California

Aired August 06, 2003 - 20:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


PAULA ZAHN, CNN ANCHOR: Out of California right now, in an announcement that is going to catch a lot of you by surprise.
Let's go to Charles Feldman, who joins us right now from Los Angeles, who will let you know exactly what that is.

Is it true Arnold Schwarzenegger in fact will run for governor of California?

CHARLES FELDMAN, CNN CORRESPONDENT: Yes, Paula, it's a little hard to hear, because I'm in the green room of (UNINTELLIGIBLE) "The Tonight Show," which is in progress, and it's being taped. But Arnold Schwarzenegger has just announced that he is going to run for governor of the state of California.

Now, I can't talk loud because the rest of the press is trying to listen to some of the comments that Schwarzenegger is making during the taping of "The Tonight Show." But he said to Jay Leno that he thought there was a disconnect between the (UNINTELLIGIBLE) politicians.

He said when he first moved to California years ago, it was a great place to live. He says it's no longer the case. And he says that because the politicians are failing the public, he has decided to make what he called the most difficult decision of his entire life. He decided, he said, to run for governor of California, that is, in the recall election that is now scheduled for October 7.

It has long been thought if that Arnold Schwarzenegger decides to run for governor, that would present enormous problems for Gray Davis, the incumbent Democrat, who is in deep political trouble and is extremely unpopular. So again, the decision by Arnold Schwarzenegger, announced on "The Tonight Show with Jay Leno" tonight is, he will run for governor of California, Paula.

ZAHN: Well, Charles, let's talk about a lot of pundits who are scratching their heads this evening. They were the pundits who basically told us all along that this would not be the appropriate venue for Arnold Schwarzenegger to even announce he'd run for governor. Did he catch just about everybody by surprise here?

FELDMAN: I think so. I think that it sometimes shows you that some of the pundits are not worth all that much money, and, you know, in the end, it's up to the individual. And Schwarzenegger clearly was wrestling with this decision. I talked to one of his top aides shortly before "The Tonight Show" started taping. And he swore to me that even half an hour ago he did not know what Arnold Schwarzenegger's decision was going to be. So this is a very well-kept secret, I'm sure there's a very big story behind his decision-making process, what discussions he may have had with his wife and political advisers.

But you're quite right, Paula, I mean, a lot of pundits tonight are going to have egg on their faces, they were saying he was not going to run, he is going to run.

ZAHN: Well, let's forget the pundits for a moment. Let's talk about some of the reporters who conclusively or said they had conclusive information that he wasn't going to run. One question, Charles, about what role Maria Shriver might have played in all of this, because it was widely reported that she was resistant to this whole idea. Do you have any information on any recent input she's had, and whether she, in fact, changed her mind?

FELDMAN: Well, not any firsthand information, Paula. I mean, I know some of the discussions that I've had with some political folks, some of those very pundits, by the way, who were predicting that he wouldn't run.

So you have to take what they said with a grain of salt, obviously. But they were saying that she was a big factor, that she was concerned, you know. Of course, she's a Kennedy, and she was concerned about the safety of her family, she was concerned about being married to an actor turned politician.

How much of that discussion was going on in the past few days is going to be left for the next few days to unfold, and for all of us to learn. But Schwarzenegger says that we're going to know more tomorrow. He's going to file the official papers tomorrow that will make him an official candidate to be governor. And he promises to give more information then.

He is also planning, we're told, to have a little bit of a news conference after he finishes "The Tonight Show" taping. And we'll have a chance, I hope, to ask him in -- somewhat in depth about his decision-making process.

Good news for him, bad news for Gray Davis, Paula.

ZAHN: Well, Charles Feldman, we're going to let you to continue to work the room, because normally you luck out and give us one-on- ones nobody else gets. We're going to be coming back to you a little bit later on this evening.

Joining me right now in the New York studios, Jeff Greenfield, who's going to weigh in on this very recent announcement. Judy Woodruff joining us from Washington tonight.

Are you one of those ones that were saying there is no way he's going to announce his candidacy on the show with Jay Leno?

JEFF GREENFIELD, CNN SENIOR ANALYST: Yes, my -- the most honest thing I could say to you right now is, Humina, humina, humina.

ZAHN: You know something about eating crow, you wrote a book about that (UNINTELLIGIBLE).

GREENFIELD: Yes, well, I guess this is dessert. But just an hour or two ago on Drudge Report, you know, he said Arnold will not run for governor, Richard Riordan's going to come with him on "The Tonight Show," he will introduce him on the air. Everybody was assuming that.

And Arnold Schwarzenegger told somebody two days ago, Don't assume I've made up my mind not to run. But I have to say, all of the speculation was, Would you really announce your decision to run on "The Tonight Show"?

This is why political science should never be called political science.

ZAHN: Isn't there a certain genius to having done that tonight?

GREENFIELD: Yes. Because it -- what it does is, it -- if Arnold had kind of leaked the word out that he was running, it would all be discounted, as I said.

ZAHN: Sure.

GREENFIELD: This is a shocker. This upends the whole apple cart. And remember, the filing deadline...

ZAHN: (UNINTELLIGIBLE).

GREENFIELD: ... unless the court's changed their mind, is this coming Saturday. And what I think it means is, if -- with Dianne Feinstein saying she wasn't going to run, and I have a hunch that may have been the deciding factor. She announced today, I'm -- no matter what, I'm not going to run.

I think he now sees that as a moderate Republican, if there's no Democrat in the race and a couple of very conservative Republicans, he doesn't have to go through a primary campaign, it's a 70-day campaign at this point.

But it is one of those stories that I think most of the political community will go, What?

ZAHN: That's the way I feel right now, even reporting this.

GREENFIELD: It's the thing, frankly, from a selfish point of view, that makes politics so fascinating. Every time you think you've doped it out, you haven't. But I -- let me just come back to this point. The withdrawal of Dianne Feinstein, who I think would have been a cinch to win a recall, I think may have been the deciding factor.

It certainly makes the Schwarzenegger candidacy much more plausible, much stronger, than had the most popular politician in the state of California said she was coming in.

ZAHN: Well, Judy, you, as Jeff has, have spent a lot of time in Sacramento lately, talking to all the politicos out there. Are you, like Jeff, saying, Humina, humina, humina this evening?

JUDY WOODRUFF, CNN CORRESPONDENT: Yes. I don't know if I can pronounce it exactly the way Jeff does, but, you know, it's not just the pundits and the reporters, Paula, but it's the people around Arnold Schwarzenegger. I talked today with George Gorton, who everyone assumed would run a campaign if there were a campaign. He told me as of a few hours ago his belief was that Arnold would not run.

I talked to other people who've talked to the candidate. I was told that yesterday, Arnold Schwarzenegger told someone else in California, a Republican who wants to run, that he, Arnold, at that moment was not running.

So something did turn it around. He had closed the door, all but closed it, as of a few days ago, except that he told some close advisers a few days ago, Well, I'm still thinking about this. You know, he -- the groundwork was all laid for him not to run. They had all the reasons laid out. But he's -- he surprised everybody.

ZAHN: So when you look at the issues on paper, particularly the large deficit California has right now, Judy, what do you suspect he's going to actually run on? What do you think will be his core issue?

WOODRUFF: Well, they -- what -- as they described it to me, they view this budget deficit as an opportunity to bring what they call real reform to California. They're talking about changing the formula, the education formula between the state and local governments, so that local governments have more control over their education spending.

They're looking at upending some of the -- literally, the political structure in the state of California. They're looking at this, as they told me, they said, if he runs, it's an extraordinary opportunity to make some changes in a state that has desperately needed change for a long time.

ZAHN: Jeffrey, you were out in California the same time we were, when we were actually supposed to interview Arnold Schwarzenegger. The interview was canceled at the last minute, some people linking that to a series of stories that has appeared at the 24-hour period about some alleged indiscretions along the way.

What is Mr. Schwarzenegger going to have to confront now that he is indeed an announced candidate?

GREENFIELD: The Gray Davis people have made no secret of their intention to run, let's put it mildly, a very, very tough campaign. One of Gray Davis's top aides some time ago sent to reporters a series of stories alleging personal improprieties on the part of Arnold Schwarzenegger. This is not going to be a League of Women Voters campaign, because I think the Davis people see in Arnold Schwarzenegger a formidable threat. This is a (UNINTELLIGIBLE) who got on the ballot and got passed by the California process, the initiative process, a very expensive after-school program.

If they -- and they know they can't paint Arnold Schwarzenegger as a right-wing extremist, which was their, which was their tactic against, say, somebody like Darrel Issa, a conservative congressman.

Schwarzenegger is pro-choice, he's pro-gay rights, he's for some kinds of gun control, he's much more kind of a moderate Republican.

So I believe they're going to argue that he's not qualified to be governor, and second, that on personal grounds, you don't want him. It's not going to be a pretty campaign, I think.

ZAHN: And I'm sure they are going to bring all of our attention to the fact that he's the -- probably one of the only announced candidates that his constituents will have seen naked on film.

Let's move on to the Terminator genre, Judy, and some of the issues raised about the intense violence in some of those films. What is he -- is he going to have to apologize for any of that?

WOODRUFF: Well, I think they're going to confront that head-on. They're going to say, Look, my career was -- has been as a movie actor. That's been my role. But I'm also a serious person.

And he can point to the work he did last year, campaigning for this after-school initiative for California schoolchildren. He literally campaigned all over the state. You're showing some pictures of it now. And he was credited by serious political people, serious issue people, with putting a lot of effort into this, and everywhere he went, of course, he drew crowds. And it won, it won very -- you know, with a very respectable margin in November.

So he is given credit for being serious, as well as somebody who acts in some movies with, you might -- well, you might say questionable video. But I think they're going to tackle that straight on. (UNINTELLIGIBLE)...

ZAHN: Jeffrey, how does the White House view this? You got to talk about these very important electoral votes, which could help sway election, right, in California. Do they want a Governor Schwarzenegger?

GREENFIELD: You know, that's very good question, because last year, the White House intervened in California on behalf of former Los Angeles Richard Riordan, who was their choice for governor. He got buried in a primary because he wasn't Republican enough for the Republican Party.

And it's very important to the White House that this thing be set up for next year in a way that benefits them. This is a state with 54 electoral votes. The Democrats have won the state three elections going, you know, going away in terms of the popular vote for president.

And it's not clear whether the White House wanted this recall anyway. In fact, most people thought they would rather have had an extremely unpopular, deficit-ridden Gray Davis, a Democrat, to govern through these next couple of painful years.

So I -- I'm now speculating. But as (UNINTELLIGIBLE), as among the Republican candidates, Schwarzenegger is probably much more attractive to the White House than any of the other choices, because they're too conservative for California, they might think.

ZAHN: And as Jeffrey, Judy, and I try to heal our collective sense of whiplash here, let's go back to Charles Feldman, who's standing by outside the NBC studios where this bombshell announcement was made that Arnold Schwarzenegger, in fact, will run for governor of the state of California -- Charles.

FELDMAN: Yes. And let me fill in some more details now for you, after we had that little phone discussion before. Schwarzenegger went on to tell Jay Leno that there was a lot of conversation -- and you were asking me about that before.

He said there were lots of conversations with his wife, Maria. He says that this is going to be the first time, he joked, that she is going to vote for a Republican. Of course, Maria, being a Kennedy, is a lifelong Democrat.

He said (UNINTELLIGIBLE), this is a quote, that no one can pay him off. "No one can pay me off," he says, that people should trust him. And here's a quote that I'm sure will be in all the morning papers. Says Arnold Schwarzenegger, "Do your job for the people, and then if not, then, Hasta la vista, baby," echoing a line, of course, from his popular "Terminator" movies.

So as we've already been discussing, I'm sure, quite a bit, this was quite a shock to most of the people, including the press corps that was here for the taping of "The Tonight Show." The conventional wisdom, and I've been saying all along that the conventional wisdom in this case hasn't been worth all that much, since there is nothing conventional about what's going on here in California.

The conventional wisdom was, up until today, that Arnold Schwarzenegger was not going to run, and instead, he comes out on "The Tonight Show" during this taping for a show that'll be airing tonight, and went on to say that he was disappointed in the way things have been going in the state of California.

He says that when he moved here, things were in good shape, great shape, things have declined. He blames politicians. And this is interesting, Paula. He sort of made a move tonight to preempt some of the criticism that is going to start popping up, now that he is a declared candidate. He said that he is aware that there are going to be negative reports about him. He's aware people are going to say he has no experience in politics.

He says he's aware that there are going to be stories out there that he's a womanizer, something that has popped up from time to time in the past. But all of that, he says, in the end, didn't matter. He felt very strongly that California needed new leadership. He put the blame for the state of -- the very bad budget, if you want to call it a budget in California, on the incumbent governor, Democrat Gray Davis.

And he told Jay Leno that he decided in the most, what he called, difficult decision of his life, to run for governor of California, Paula.

ZAHN: Hasta la vista, baby, Charlie.

Let's go back to Bill Schneider, standing by in our Los Angeles studios. Are you just as surprised as the rest of us, Bill?

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: We're all surprised, including people here in California. I spoke to a leading Democrat, a leading Republican today. I just got off the phone with someone from the governor's office from the campaign against the costly recall, as it's called.

And nobody, nobody predicted this, because the conventional wisdom, as Charles just said, was he is -- Arnold wasn't going to run.

But now, look, this great race has suddenly taken on a shape. It's Gray Davis versus Arnold Schwarzenegger. And I understand Arianna Huffington became a candidate, and there are some others on the ballot. But it's really going to come down to Gray Davis versus Arnold Schwarzenegger, on separate ballots. On separate ballots.

There are a few of the others, Darrell Issa, Bill Simon is likely to run. Those are conservatives. But I think in the end, it's going to be seen as a two-candidate race. But what makes it odd is, Arnold Schwarzenegger doesn't go -- isn't going to need a majority to beat Gray Davis. All he needs is to come in first among all the other candidates on the second ballot.

ZAHN: Of course, one of the key question right now is whether we're going to see a Democrat come in and challenge Governor Gray Davis. What are the chances of that happening, Jeffrey?

(CROSSTALK)

GREENFIELD: That's right, he would not have to challenge. He or she could come in and say, I'm against this recall. But now that Schwarzenegger's on the ballot, it makes it much tougher for the Democrats all to stay out and say, Well, it's just a bunch of right- wing Republicans. That is not, I believe, going to fly on Schwarzenegger.

So with Dianne Feinstein now out, and with five days left to file, you're going to see the biggest game of no-limit Texas, hold- 'em, when do we put in the chips, do we put in the chips, can we now stand to try to fight this recall with Schwarzenegger as a moderate Republican? Can we beat him, the Democrats will say, on personality grounds, on character grounds, on experience grounds? Or do we have to field someone between now and Saturday to say, Well, if you guys are going to recall Davis, we don't want to give up the governor's mansion to a Republican.

It is absolutely fascinating, and now completely unpredictable.

ZAHN: Bill, what do you suspect will happen?

SCHNEIDER: Well, first of all, let me tell you one thing. The -- Arnold Schwarzenegger is not dynamite in the polls. "The L.A. Times" did a poll, and a lot of voters in California say they would never vote for Arnold Schwarzenegger. They don't -- they take him seriously as a movie actor, some people do, but they don't take him seriously as a politician.

He doesn't have the experience, he doesn't have the qualifications. So he's going to have to build credibility as a political figure. He doesn't start out as the commanding hero in this race.

The question is, can he bring in a lot of new voters? That's what he's expected to do, bring in people who never vote, who have nothing to do with politics, who would never turn out, to suddenly vote for someone they see as a celebrity and a popular hero.

That's why Arnold is seen as formidable. But it does not show up in the polls.

ZAHN: And Judy, let's talk for a moment about something Jeff talked about a little bit earlier this evening, the whole notion that Arnold Schwarzenegger can avoid a long-drawn-out primary campaign. Do we have any sense of what these candidates are willing to spend in this very short window of time they have?

WOODRUFF: Oh, I think that they're going to spend the limit. Gray Davis broke all sorts of limits when he ran for reelection last year. My guess is, Arnold Schwarzenegger will be willing to put any amount of money from his own pockets, plus, I'm sure, Republicans will be glad to give him more money.

We are going to see a big-spending, a lot of television ads you're going to see, and plus there's going to be what we call free media, every television show in the country is going to be interested in getting Arnold Schwarzenegger on for an interview.

And -- so you're looking at a race that -- you know, California has been notorious, let me put it this way, in the past for not paying a great deal of attention to politics. This stands that whole theory on its head, because, I think, for once, California is going to have the most-watched politics in the nation.

ZAHN: Jeff, I know you, more than anybody else, hates to speculate. But can you just help us understand what is going on inside the office of Governor Gray Davis tonight? GREENFIELD: I think they're saying what I said a few minutes ago, Humina, humina, humina. Look, (UNINTELLIGIBLE), they have so far successfully made this case within the Democratic Party that you cannot get on -- you cannot run a Democrat.

They got labor a couple of days -- just a couple of days ago to say to Democrats in California, Stay off the ballot, we want to fight this recall. Gray Davis, yes or no, and then that's what we're going to do.

But now you've got not just a rich congressman, Darrell Issa, who can spend as much as he wants, because it's his money, not just another rich candidate, Bill Simon, who lost to Gray Davis. He can spend as much as he wants.

Not just Arnold Schwarzenegger, who, we presume, has a fair-sized amount of money stashed away. You've got labor that's going to pour in we don't know how much, but millions, behind the anti-recall campaign. And I think right now the Davis campaign is thinking, We have got to now make sure that no Democrat comes into this race.

There have been some noises in the last few days from some congressmen, from some local Democratic officials, saying, We don't know if we can take the risk. And that, I think, is the most important and unpredictable, I'm sorry, feature of the next few days.

Are they going to all stay out? And...

ZAHN: Well, if we all look a little shell-shocked this evening, please understand, it is for a very good reason, even though CNN immediately shot down, I think it was Judy Woodruff, in fact, the reports last week that Arnold Schwarzenegger had decided not to run. I think we all are very surprised he made this announcement on Jay Leno.

And before we go, Jeffrey, I want to throw something else out to you (UNINTELLIGIBLE). You may not know this, but Gary Coleman, the former child star of the sitcom "Different Strokes," is also thrown his name into the ring.

And a man representing him said, Hey, wait a minute, it is true this has a farcical quality to the entire recall effort, but Gary's candidacy is no more farcical than that of Arnold Schwarzenegger or Arianna Huffington, or the comedian Gallagher.

Did they get that right?

GREENFIELD: I believe somebody once said about California that, you know, when the volcanic eruption started millions of years ago, everything that wasn't nailed shut, everything loose, rolled West. And this just gives more rise to the stereotype.

I don't think we really need to take this one all that seriously.

ZAHN: Judy Woodruff, Bill Schneider, Jeffrey Greenfield, thank you all for being with us this evening. We probably will come back to you a little bit later on. Once again, Arnold Schwarzenegger announcing just about 20 minutes ago that he will indeed face off against the incumbent, Governor Gray Davis, in this recall effort on October 7.

We're take a short break. When we come back, we will be talking with a former governor of California, Jerry Brown. I'm sure he will have some pretty interesting insights into this latest development.

Plus, we'll get back to what happened in the Kobe Bryant case today. And as we leave you, we're going to take a shot and show you what it looks like outside of NBC studios. We are awaiting a news conference from the now-announced gubernatorial candidate, Arnold Schwarzenegger, you know, the guy out with that really, really movie that's at the top of the charts right now, "Terminator 3."

We'll be right back.

(COMMERCIAL BREAK)

ZAHN: Welcome back.

We continue to cover that breaking news out of California, the bombshell announcement that Arnold Schwarzenegger, you know, the man you see in the "Terminator" movies, will run for governor of California.

Let's go back to Charles Feldman, who was standing by in the green room during the taping of the show, where Mr. Schwarzenegger made this announcement.

Charles, for folks who weren't with us at the top of the hour, tell us exactly what Mr. Schwarzenegger told Jay Leno. They have not released that tape yet.

FELDMAN: That's right. Jay -- he went on Jay Leno. We were told he was going to make his announcement about whether he was going to run or not. And as we've been discussing for a while now, the conventional wisdom was that he probably was not going to. Well, talk about a theatrical event and knowing how to play an audience.

Arnold Schwarzenegger comes out after Jay Leno's monologue. He starts talking about how things were so much better in California when he first moved here, how they've gone downhill since. He started blaming the politicians, saying that they're at fault. He blamed the current Democratic governor, Gray Davis. And then, in the event that shocked everybody clearly in the news -- in the press corps that was sitting there, taking notes, listening to every word he was saying, he announced that, for those reasons and more, he was going to run for governor of the state of California in this recall election, that is now scheduled for October 7.

You could hear a pin drop in the room, as I think the overall reaction of people was, huh? And that was probably the best way to sum it up. And then everybody myself included, ran to the telephones to get the word out that the conventional wisdom had been wrong, been proven wrong. Arnold Schwarzenegger is, in fact is running. He went on to tell Jay Leno that it was the most difficult decision of his life, that he had discussions in the past several days, and we can only imagine how deep those discussions might have been, with his wife, Maria. But in the end, he said, for the first time in her life, Maria, of course, being a Kennedy and a lifelong Democrat -- he says, for the first time in her life, she will vote for a Republican. I presume she meant him.

He says that tomorrow, he will, bright and early, file the official papers that will make him a declared candidate in this recall vote. Several hundred people, by the way, Paula, have taken out those papers, although very few of them have officially filed. They have to do that by Saturday, which is the deadline. This is shocking news, I'm sure to Gray Davis, shocking news to many of the other people, would be gubernatorial candidates. And certainly, a shock to "The Tonight Show" audience, and a shock to me, I'll admit it. It was a shock to me too, Paula.

ZAHN: We've all had to eat a little crow here this evening. We stand here in suspended disbelief.

Judy Woodruff, I know you've had a chance to talk to a lot of people who could potentially work in a Schwarzenegger campaign. Give us some more insights into the very specific family concerns Arnold Schwarzenegger had about taking this on.

WOODRUFF: Well, what I was hearing, Paula -- and this has been consistent for the last several days, since the recall became official, was that almost as soon as Arnold and his advisers met, the discussion moved in the direction of, he probably wasn't going to go for it, for two reasons. He was worried about his children and the scrutiny that his family would be subject to. The adviser said he was very worried, that even though, as the children of a movie star, they obviously get more attention than average kids, but that as the children of a governor, his schedule, their schedule would be an open book, the public would be entitled to information that they're not even entitled to now.

And beyond that, they kept saying he really wants to spend more time with his children. They're young, they're all something like between the ages of, I think it's 4 or 5 and 12 or 13. So these are young kids, still a very impressionable age. And that was said to be another reason.

What they kept insisting, Paula, though, was that the so-called personal stories about Arnold Schwarzenegger's life were not a factor. But as I know you and Jeff discussed a few minutes ago, that clearly had to be something they were talking about, whether they wanted to acknowledge it or not.

ZAHN: Bill Schneider, let's talk a little bit about what Charles Feldman -- Bill Schneider is not there, but Jeff Greenfield is -- a little bit of what Mr. Schwarzenegger communicated to Jay Leno tonight, blaming the deficit, the enormous deficit of this state on the governor and politicians. Now to be perfectly fair, there have been Democrats who argued that some of the -- what you see going on in the national economy has contributed to those ballooning deficits in California. Give us the straight scoop on that.

GREENFIELD: Well, what the Democrats argue is, Look, the energy crisis in California that ultimately cost billions of dollars was because Enron and company were cooking the books. A lot of this economy cratered because the national economy cratered.

What Davis critics say is, Yes, but you -- instead of putting the surplus into a rainy day fund, when we suddenly got this billions and billions of dollars in capital gains and income taxes, you squandered it. You spent it squandered it because you gave it to the interest groups and you caved to the liberals in the Democratic legislature. On a substantive issue, that's going to be a big debate over the next two months.

The other point I'd really like to make -- it picks up on what Bill Schneider said about whether Schwarzenegger has credibility. Earlier today, Jerry Springer, the famed talk show or freak show host said he was not run for senator of Ohio because he felt that the show blocked any attempt he had to get his message out.

And so the question for Schwarzenegger is, are people going to see him as an actor with a funny accent who sometimes walks around naked in his movies -- I don't know whether that's plus or minus in California -- or are they going to see him...

ZAHN: Depends on who you ask, Jeff.

GREENFIELD: I guess so.

Or are they going to see his work in terms of afterschool programs and his work in all kinds of charitable foundations aimed mostly at children as a sign that he's a serious public policy guy. That, as much as rumors that you were talking about, about womanizing or whatever, I think, is the challenge that he has.

But there's a real issue here about -- about California is on it's --it's on its uppers. That is, it has had one of the worst turnarounds of any state, and the question of who do you blame for that is going to be a pivotal question of whether or not this recall works or not.

ZAHN: Well, we have just the man to ask who do you blame for that in former Governor Jerry Brown, who actually was booked to talk about the recall effort. No one ever thought this announcement would come out this way in this half hour.

Governor Jerry Brown, always good to see you. Your reaction to this announcement by Arnold Schwarzenegger?

JERRY BROWN, FORMER CALIFORNIA GOVERNOR: Well, I think it adds a lot of excitement, get a lot of attention. And I don't think you ought to be ruling anyone out at this point. Remember, we had an actor named George Murphy. His opponents called him a tap dancer, but he was elected to the U.S. Senate, beat Pierre Salinger, President's Kennedy's press secretary. We also had Ronald Reagan, who my father thought was going to be some kind of an easy candidate and he went on to win 59 to 41 percent and then went on to the presidency.

So the fact that someone's an actor can actually be a boost. And the only real question is what is the demeanor and the gravity with which he will present himself during this campaign. And I think it's too early to tell.

This is a very exciting, unprecedented process, and it's not over until 5:00 p.m. on Saturday. You can probably expect a few more candidates, and then it will be something that will galvanize the nation.

ZAHN: OK. When you say, we can expect a few more candidates, do you want to make any predictions? Do you see more candidates on the Republican side as well as the Democratic side?

BROWN: Well, I mean, you still -- you'll probably might get some -- you'll get some candidates on the Republican side, and you may get a Democratic candidate, because while labor and other key constituencies are attempting to form a phalanx of protection for Governor Davis, nevertheless, underneath and kind of behind the scenes, people are saying, should there be an insurance policy? Should we Democrats have an insurance policy just in case this recall is not defeated? And therefore, either the lieutenant-governor or perhaps our insurance commissioner, somebody may hear the calling, and given a lot of ambitious Democrats, even though it's a rather turbulent course, there may be somebody I would expect....

ZAHN: All right. Are you talking about yourself, sir?

BROWN: No.

ZAHN: Are you hearing that call?

BROWN: Well, I've been hearing that call a long time. But I don't think it's prudent step at this point.

ZAHN: You say it's not a prudent step at this point. You've got until Saturday, sir.

BROWN: I do, but it's not -- I'm really more interested in running for attorney general of California. It's a position my father had. I'm a lawyer. I think that might be a more appropriate place than governor.

ZAHN: So you're on the record here completely ruling out the possibility that we will see you add your name to the list?

BROWN: Yes. I'm putting that right on the record, yes.

ZAHN: All right. Jerry, if you wouldn't mind standing by, we just want to remind people that Arnold Schwarzenegger will be holding a news conference, we're told within minutes. If you don't mind being patient, we're going to weave you in and out of this conversation.

Jerry, you brought up the credibility issue and how your father was quite surprised by the effectiveness of Ronald Reagan's campaign. Bill Schneider, citing some "L.A. Times," polls which would suggest that credibility could be a problem from Arnold Schwarzenegger. Just some insights on that.

BROWN: Oh, yes, I think it is a problem. But then -- and the media will surround him with some aura of questionableness because of "The Terminator" and all that. But if -- when the cameras go on, he speaks with clarity and confidence, then he'll have his opportunity. And if in the first few weeks he lays out a good impression -- or the first few minutes that he's exposed on TV, he'll -- you can't write him out -- write him off until he's passed through that first gate of getting acquainted with the voters. And he may blow it or he may not. But anybody who tells you they know the answer does not understand contemporary media politics or certainly the state of California.

ZAHN: Well, that's -- that's the understatement there. Jerry, on its surface, one would think that Arnold Schwarzenegger's personal story is that of a great American success story. Here's a guy who comes over from Austria, he speaks very little English, he becomes one of the world's top bodybuilders. He turns that into a successful real estate business at the same time he was pursuing acting. How attractive is that story to potential California constituents?

BROWN: Well, as I say, it has a potential. But remember, you haven't gotten through the recall yet. There's a lot of sentiment against the recall. After all, it creates a process, whereby a candidate could actually get elected by a very small plurality, which doesn't sound very democratic in the spirit of the majority rules. That is going to give people a lot of pause and that will be a very powerful argument on the no side.

If it happens that the yes side prevails, then of course, it's a free-for-all on the other side. I think it's just too early to tell, because when someone hasn't run for office, it leaves a lot of questions until they run that gauntlet of gaffs and misspoken words and things that come up about him. It's always a question mark until you get out there.

But I have to say, that anybody who steps into this fray is showing a certain amount of confidence and willingness to make bold moves. On the Democratic side, that hasn't been the qualities in evidence, other than the governor who, of course, has to defend himself.

ZAHN: I still want to hear you name some Democratic names. Any names you think we might see popping up on Saturday?

BROWN: Possibly the lieutenant-governor could jump in. He has a rather unique provision that there's a court suit that says that actually the second part, that allows for the choosing of a candidate, if the recall succeeds is unconstitutional or violates what the -- not unconstitutional but violates the law that says you only go to the second part, if appropriate. Since a vacancy would be created by the recall, then the lieutenant-governor, under the constitution in another part of the constitution, says he is -- he takes over.

So he has that little edge. Then, of course, you have the insurance commissioner, he may be looking at it. Who knows what Democrats may be lurking out there, wondering if history's going to pass them by.

ZAHN: What would you have done, if you had been in Governor Davis' shoes?

BROWN; Well, you know, it's not -- it's always easy to second- guess. But I do think the two principle problems were the energy crisis and quite frankly, I had a few times the prop 13 crisis, and then we had the business of the med flies. And I made real errors in both, I delayed. It wasn't pleasant. I didn't see an easy way out. So I just let it fester. I'm afraid that's what happened in the energy crisis. If I did have hindsight, I would have said attack it, get at it, force the energy companies to produce the energy, make dramatic bold moves.

That's number one. Number two, you get to the fiscal problem. Again, it came with a burst of a bulb. Could happen to anybody. Pete Wilson had had a $14 billion deficit. A number of governors ended with deficits. So the only thing when the legislature was deadlocked, the only real answer at that point was to go to the people and have, in a reserve option, an initiative to be presented to the people at a special election to provide the revenue and introduce the appropriate cuts.

I think that could have been done. It still can be done, because once you're up there as governor and the legislature, because they're deadlocked, will not produce what the law says they need to produce, namely a balanced budget, then the governor has no other option but to go to the people, not in the recall, but by way of initiative, and there with 8 percent of the registered voters you can provide yourself a solution that the people can vote yes or nay on.

ZAHN: Well Governor Jerry Brown, we appreciate your insights and your patience tonight. We're going to ask you to stand by and remind people why we continue to have our cameras trained on an empty podium, that is because Arnold Schwarzenegger will soon be holding a news conference. We will be covering it live.

In the meantime, let's go back to Los Angeles. Arianna Huffington, a columnist that we know and has frequently been a guest on this show announced her candidacy today for governor of California. Now Arianna, your reaction to Arnold Schwarzenegger's announcement.

ARIANNA HUFFINGTON, CALIF. GOV. CANDIDATE: Well actually, it's really good news for those of us who want to see more voters pay attention to this election, and for the opportunity it gives to an independent like myself, to get those new unlikely voters, as "The Post" has called them to focus on what a progressive independent governor could do in terms of the strangle hold of special interests in Sacramento.

On top of it, from my point of view, this going to be the hybrid versus the Hummer because I have been speaking out in favor of hybrid cars and Schwarzenegger has been the spokesperson for the Hummer, the least fuel efficient vehicle on the road.

ZAHN: Now Arianna, you can't tell me tonight you're thrilled he's running. I mean, I know in a conversation we had last week on the air, you were feeling pretty good about entering into the fray as an independent. You worried about any votes he will be siphoning off?

HUFFINGTON: I think the contrast between Arnold Schwarzenegger on the environment, which is a critical issue in California, is going to be very important as will the fact that Schwarzenegger will have to run as a Bush Republican which is what he is. And the centerpiece of my campaign is connecting the dots between the disastrous Bush policies in Washington and the impact they have had in California. The tax cuts, the cozy relationship with Enron and other energy companies, this is going to be very hard for anybody to defend. And Darrell Issa's defense is going to be be indistinguishable from Arnold Schwarzenegger's defense.

ZAHN: So, Arianna, I understand where you think you can differentiate yourself, but what are the chances, in the end, that it will be Arnold Schwarzenegger that could end up being governor of the state of California?

HUFFINGTON: Paula, this is a race which nobody can predict. So much will depend on who turns out to vote. How many young people we are able to mobilize, minorities. Our Web site, which went up today ariannaforgovernor.com has already been flooded with requests to volunteer, offers of money. These are all from people who are feeling shut out of the system. These are the people we are appealing to, as well as middle-aged voters like myself, who are feeling that the special interests have really taken over California politics.

ZAHN: Jeff, I see you shaking your head. What are you thinking, my man?

GREENFIELD: I'm thinking there's an only in America quality to...

HUFFINGTON: Hi, Jeff

GREENFIELD: How you doing, Arianna. This is going to be the first debate that's going to require simultaneous translators.

ZAHN: Would you like to volunteer?

GREENFIELD: No, no. But in a classically -- in that sense, it really is -- it is an only in America thing. But I guess the question that I'm wondering is Arianna, you called the recall, I think at one point ill-advised, so are you now saying to voters, vote for the recall and vote for me or are you saying, vote against the recall but just in case Davis is recalled, vote for me. Where are you on that?

ZAHN: Trick question, Jeff.

HUFFINGTON: Yes, I'm actually saying to the voters, as I said at the press conference this morning, vote your conscience. Vote against the recall. If you want to send a message to Republicans that a power grab like this will not be continued in the future, that we need to change the recall provision or vote for the recall, but whichever you do, vote for me as an independent progressive alternative.

I have many very great friends, supporters of this campaign who are passionately against the recall and that's a very legitimate position. But at the same time, even though I have been against the recall process, right now, it provides a stunning opportunity for an independent which would not be available in a normal election.

ZAHN: Arianna, I know your staff has been working the phones since this announcement was made. Can you give us any feedback and anything you've heard from Governor Gray Davis' camp?

HUFFINGTON: Actually, no, I haven't heard anything from Governor Gray Davis' staff. I have heard from Dick Riordan, who very charmingly, he is a friend, Nancy Riordan is a friend, called yesterday to wish me luck and today I run into Nancy Riordan and she wished me luck, so they must have known they were not going to be in the race.

ZAHN: Governor Jerry Brown, you can rejoin us here. I know you're still standing by. Anything you want to add.

HUFFINGTON: Hi, Jerry.

BROWN: Hi, Arianna. No, I wouldn't count Gray Davis out. This man is a very disciplined, very experienced, highly intelligent individual. He's fighting with,you'd have to say,a weak hand at this point. But this is an unprecedented process. It does go against the spirit of majority rule, because the one who finally gets elected under a recall scenario could get elected with 25 percent of the vote.

So It's early. It may be a disaster for him, but he's a formidable person under pressure. I think, you'd have to put him as a very strong contender at this point, even though this recall is threatening, no question.

ZAHN: Can I throw a question out to both of you, and it's a question I've heard posed by a number of California voters, and they're saying, with the precedent being set by this recall effort, are you going to see a situation down the road, when you see someone's poll ratings drop 25 percent, you know it going to basically stand for an automatic recall effort? Arianna?

HUFFINGTON: Well actually, Paula, that's why I believe very strongly, that on October 8, we need to proceed to change the recall provision. Right now, as you know, paid signature gatherers can collect signatures, therefore it is a matter of money putting a provision like that on the ballot. Also, I would make it much harder to clear the bar to become a candidate. These are changes we have to make to prevent something like that in the future. But while it's happening, let's use this opportunity to clean house, that's really the message of my campaign and it's resonating because look at the inequities of our system. Look what's going on and how many people are suffering with all the cuts, while we are losing about $5 billion in tax revenue because of tax loopholes.

ZAHN: Jerry?

BROWN: Well, you know, this is a provision that's been around since 1911. It hasn't been used in this manner successfully. Things have a way of working out. We're going to learn a lot in this recall process. At the end of that, there'll be plenty of time to rethink where we go. If Davis succeeds, or if he doesn't succeed, then, we'll be in a position to know, was this a positive experience or was this one more gigantic diversion and sub version of majority rule? I'd say, for the Democratic point of view, Democrats are worried that this recall was inspired by a very far right Republican.

That he paid a number of these signature gatherers and is exploiting a moment that did derive from the dot.com burst, and from the fact that the California revenue is so dependent on the elastic income tax you can get great rushes of revenue that can then disappear. And the lesson here is you need a very steady revenue source. And all those things in a substantive way will be taken up. Right now, we're going to have, I'd have though say, somewhat of a circus atmosphere. There may be some substance along the way, but if you can -- if past is prologue, you know, Katie bar the door for what's going to be unleashed between now and the election day of the recall.

ZAHN: What is it about Governor Davis, Mayor Brown, that inspires so much negative reaction from even fellow Democrats?

BROWN: Well, I don't -- you know, I think he gets a bum rap on that. You go back and look at Harry Truman. He was down in the 20s, too, in 1950. My father became very unpopular, particularly after the Carl Chessman case. I certainly had problems of my own. And then Pete Wilson was really down in the dumps. Being governor of California is not for everyone. It's a very diverse state with totally contradictory demands and wishes from the right to the left. Let's spend lots of money, let's not tax this. To the north to the south. And it's the rare governor, in the last 50 years, that comes through six or seven years without a lot of egg on his face. So, I think this is kind of par for the course. You're in a constant pressure with your own party, because they put the pressure up to spend more money. There are a lot of constituencies to be taken care of. And yet, to win majority from a lot of people, you can't take care of those constituencies. So, in truth, it's a matter of time before they want to throwing you out.

ZAHN: Jerry, I don't want you this think I haven't been listening to you. But for any who has been watching that tree and all the reporting standing around it suddenly jumping in place. Here we have Arnold Schwarzenegger running for governor of California.

ARNOLD SCHWARZENEGGER (R), CALIF. GOV. CANDIDATE: First of all, let me just say thank you very much for assembling so quickly here and being part of this announcement. As I said earlier, this was a very difficult decision to make. As I always have said, that when I'm finished with my Terminator promotion, I would then deal with this issue if I would run or not. Well, last week, on Thursday, I visited my last city, which was Mexico City. After I came back, I started talking to my wife about this and with my children about this, about the idea of running for governor. And they don't give you much time for something like that. This time, it had to be a very quick decision. So within two weeks I had to make up my mind.

So I -- my wife told me that she would support me, no matter what the decision is. I therefore decided to run for governor of this great state because I feel very strongly that we have some serious problems in this state. We have businesses leaving here everyday. We have people leaving the state everyday. We see a budget that is the biggest budget deficit that we've ever had in the history of California. We see our ratings, the junk bond ratings that we're getting, it is disastrous. We see a governor being recalled. We see a education system that is last in the country. We just see things declining and declining and declining. And the biggest problem that we have is, that California has been run now by special interests. All of the politicians are not anymore making the moves for the people, but for special interests and we have to stop that.

So, this is why I'm running for governor. I will go to Sacramento and I will clean house. I will change that. As you know, I don't need to take any money from anybody. I have plenty of money myself. I will make the decisions for the people.

QUESTION: How much did Dianne Feinstein's decision play into this?

SCHWARZENEGGER: Nothing that has happened in the last 14 days made any difference in my decision making. My decision was based on how my family would respond, my children and my wife. My wife, I happen to have the greatest wife in the world. She is a fantastic partner. She said to me that she supports any decision that I make. That was, to me, the most important thing. If she would have been against me campaigning and me going for the governorship, I would not have done it.

QUESTION: Mr. Schwarzenegger, when did you tell that beloved wife you were going to run, because everybody around you says that you have caught them in a big surprise. When did you tell Maria Shriver you were going to run.

SCHWARZENEGGER: Maria and I had discussions over the last two weeks. Slowly it crystallized of what my decision will be, that I would be running for governor of the state of California. And this is a process that was a very long and very difficult process, because you have to put all of those things on a scale. You have to put on a scale, you know, that you're stopping with the movie career, you're stopping some of the business relationships that make you a lot of money. You have to put on that scale also of what effect this is going to have on your family and your children. The children are very important to me. I had a terrific upbringing in Austria, so obviously, I want to provide a great upbringing for my children and be there for them as they grow up. So all of those things were very important. So -- but as time went on it crystallized this is what I should do.

QUESTION: Did you say to her you were going to run. Did you tell her this afternoon, after the show, before the show?

SCHWARZENEGGER: I'm not going to comment on that nor give any details of what happened between my wife and I. All I can tell you is that she's 100 percent supportive, and has said that all the way along. I want to take under consideration what her feelings are and my children's feelings are.

QUESTION: You're to the left of many California Republicans...

(CROSSTALK)

SCHWARZENEGGER: Say again.

QUESTION: You're to the left of many California Republicans but to the right of many Democrats. Who will elect you, bring you into office?

SCHWARZENEGGER: I speak directly to the people. And I know that the people of California want to have better leadership. They want to have great leadership. They want to have somebody that will represent them. It doesn't matter if you are a Democrat or Republican, if you're young or old, what the racial thing is, nothing matters to me. To me what matters is that I want to represent everyone in California. That is the important thing.

QUESTION: What about the immigrant population?

SCHWARZENEGGER: Everyone is welcome. As you know, I'm an immigrant. I came over here as an immigrant. What gave me the opportunities, what made me be able to be here today, is the open arms of Americans. I have been received. I have been adopted to America. I have gotten all the opportunities because of America. I have seen first hand, coming over here, with empty pockets, but full of dreams, full of desire, full of will, to succeed. But with the opportunities that I had available, I could make it. And that's what I want everyone to be able to do. This is why we have to get back and bring California back where it once was.

(CROSSTALK)

One more question.

QUESTION: What did Dick Riordan say, we know he is a confident and close friend of yours was considering to run.

What did he say when you told him you were going to run or haven't you told him yet?

SCHWARZENEGGER: I will let him speak for that. Dick Riordan and I are great, great friends. I have been a big supporter of his when he was mayor. And we had many, many discussions over the last 14 days because he's a close confident. And we always want to make sure everyone is guessing of who is going to do it.

UNIDENTIFIED MALE: Last question, please. Last question.

(CROSSTALK)

SCHWARZENEGGER: Thank you very much.

QUESTION: Can the Terminator fix what's wrong with California, with the state in the deficit it's in?

SCHWARZENEGGER: Well, I can tell you that we have to clean house in Sacramento. The most important thing is that we bring business back to California. There are more businesses leaving California now than ever before. When businesses come back, revenue comes back, when revenue comes back we can afford all kinds of different programs that are very important. We want to make sure that the children are not left with without any books. We want to make sure that our children have the books, that they have their place in the classroom. We want to make sure hay they have after school programs. We want to make sure the mothers have affordable day care. We want to make sure the older folks have their care that they need. That everything has to be provided for the people. We have such a great state, there's no reason why we are in the state we are in today.

Thank you.

(CROSSTALK)

SCHWARZENEGGER: Thank you very much. And thank you. And I'll be back, be back.

ZAHN: We have heard Arnold there. Two of those phrases from his film tonight, I'll be back. Arnold Schwarzenegger, confirming the fact that he will indeed run for governor of California. And this latest recall effort in his state, promising to clear house in the California, state that he says has been over run by special interest. He praised his wife Maria for her support. Saying there is nothing in the last two weeks that really specifically changes his mind. But as he thought about more, the idea of running crystallized in his head. There you have it, Arnold Schwarzenegger, officially a candidate, a Republican Candidate for the governor of California. Thanks so much for joining us tonight.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com







Aired August 6, 2003 - 20:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
PAULA ZAHN, CNN ANCHOR: Out of California right now, in an announcement that is going to catch a lot of you by surprise.
Let's go to Charles Feldman, who joins us right now from Los Angeles, who will let you know exactly what that is.

Is it true Arnold Schwarzenegger in fact will run for governor of California?

CHARLES FELDMAN, CNN CORRESPONDENT: Yes, Paula, it's a little hard to hear, because I'm in the green room of (UNINTELLIGIBLE) "The Tonight Show," which is in progress, and it's being taped. But Arnold Schwarzenegger has just announced that he is going to run for governor of the state of California.

Now, I can't talk loud because the rest of the press is trying to listen to some of the comments that Schwarzenegger is making during the taping of "The Tonight Show." But he said to Jay Leno that he thought there was a disconnect between the (UNINTELLIGIBLE) politicians.

He said when he first moved to California years ago, it was a great place to live. He says it's no longer the case. And he says that because the politicians are failing the public, he has decided to make what he called the most difficult decision of his entire life. He decided, he said, to run for governor of California, that is, in the recall election that is now scheduled for October 7.

It has long been thought if that Arnold Schwarzenegger decides to run for governor, that would present enormous problems for Gray Davis, the incumbent Democrat, who is in deep political trouble and is extremely unpopular. So again, the decision by Arnold Schwarzenegger, announced on "The Tonight Show with Jay Leno" tonight is, he will run for governor of California, Paula.

ZAHN: Well, Charles, let's talk about a lot of pundits who are scratching their heads this evening. They were the pundits who basically told us all along that this would not be the appropriate venue for Arnold Schwarzenegger to even announce he'd run for governor. Did he catch just about everybody by surprise here?

FELDMAN: I think so. I think that it sometimes shows you that some of the pundits are not worth all that much money, and, you know, in the end, it's up to the individual. And Schwarzenegger clearly was wrestling with this decision. I talked to one of his top aides shortly before "The Tonight Show" started taping. And he swore to me that even half an hour ago he did not know what Arnold Schwarzenegger's decision was going to be. So this is a very well-kept secret, I'm sure there's a very big story behind his decision-making process, what discussions he may have had with his wife and political advisers.

But you're quite right, Paula, I mean, a lot of pundits tonight are going to have egg on their faces, they were saying he was not going to run, he is going to run.

ZAHN: Well, let's forget the pundits for a moment. Let's talk about some of the reporters who conclusively or said they had conclusive information that he wasn't going to run. One question, Charles, about what role Maria Shriver might have played in all of this, because it was widely reported that she was resistant to this whole idea. Do you have any information on any recent input she's had, and whether she, in fact, changed her mind?

FELDMAN: Well, not any firsthand information, Paula. I mean, I know some of the discussions that I've had with some political folks, some of those very pundits, by the way, who were predicting that he wouldn't run.

So you have to take what they said with a grain of salt, obviously. But they were saying that she was a big factor, that she was concerned, you know. Of course, she's a Kennedy, and she was concerned about the safety of her family, she was concerned about being married to an actor turned politician.

How much of that discussion was going on in the past few days is going to be left for the next few days to unfold, and for all of us to learn. But Schwarzenegger says that we're going to know more tomorrow. He's going to file the official papers tomorrow that will make him an official candidate to be governor. And he promises to give more information then.

He is also planning, we're told, to have a little bit of a news conference after he finishes "The Tonight Show" taping. And we'll have a chance, I hope, to ask him in -- somewhat in depth about his decision-making process.

Good news for him, bad news for Gray Davis, Paula.

ZAHN: Well, Charles Feldman, we're going to let you to continue to work the room, because normally you luck out and give us one-on- ones nobody else gets. We're going to be coming back to you a little bit later on this evening.

Joining me right now in the New York studios, Jeff Greenfield, who's going to weigh in on this very recent announcement. Judy Woodruff joining us from Washington tonight.

Are you one of those ones that were saying there is no way he's going to announce his candidacy on the show with Jay Leno?

JEFF GREENFIELD, CNN SENIOR ANALYST: Yes, my -- the most honest thing I could say to you right now is, Humina, humina, humina.

ZAHN: You know something about eating crow, you wrote a book about that (UNINTELLIGIBLE).

GREENFIELD: Yes, well, I guess this is dessert. But just an hour or two ago on Drudge Report, you know, he said Arnold will not run for governor, Richard Riordan's going to come with him on "The Tonight Show," he will introduce him on the air. Everybody was assuming that.

And Arnold Schwarzenegger told somebody two days ago, Don't assume I've made up my mind not to run. But I have to say, all of the speculation was, Would you really announce your decision to run on "The Tonight Show"?

This is why political science should never be called political science.

ZAHN: Isn't there a certain genius to having done that tonight?

GREENFIELD: Yes. Because it -- what it does is, it -- if Arnold had kind of leaked the word out that he was running, it would all be discounted, as I said.

ZAHN: Sure.

GREENFIELD: This is a shocker. This upends the whole apple cart. And remember, the filing deadline...

ZAHN: (UNINTELLIGIBLE).

GREENFIELD: ... unless the court's changed their mind, is this coming Saturday. And what I think it means is, if -- with Dianne Feinstein saying she wasn't going to run, and I have a hunch that may have been the deciding factor. She announced today, I'm -- no matter what, I'm not going to run.

I think he now sees that as a moderate Republican, if there's no Democrat in the race and a couple of very conservative Republicans, he doesn't have to go through a primary campaign, it's a 70-day campaign at this point.

But it is one of those stories that I think most of the political community will go, What?

ZAHN: That's the way I feel right now, even reporting this.

GREENFIELD: It's the thing, frankly, from a selfish point of view, that makes politics so fascinating. Every time you think you've doped it out, you haven't. But I -- let me just come back to this point. The withdrawal of Dianne Feinstein, who I think would have been a cinch to win a recall, I think may have been the deciding factor.

It certainly makes the Schwarzenegger candidacy much more plausible, much stronger, than had the most popular politician in the state of California said she was coming in.

ZAHN: Well, Judy, you, as Jeff has, have spent a lot of time in Sacramento lately, talking to all the politicos out there. Are you, like Jeff, saying, Humina, humina, humina this evening?

JUDY WOODRUFF, CNN CORRESPONDENT: Yes. I don't know if I can pronounce it exactly the way Jeff does, but, you know, it's not just the pundits and the reporters, Paula, but it's the people around Arnold Schwarzenegger. I talked today with George Gorton, who everyone assumed would run a campaign if there were a campaign. He told me as of a few hours ago his belief was that Arnold would not run.

I talked to other people who've talked to the candidate. I was told that yesterday, Arnold Schwarzenegger told someone else in California, a Republican who wants to run, that he, Arnold, at that moment was not running.

So something did turn it around. He had closed the door, all but closed it, as of a few days ago, except that he told some close advisers a few days ago, Well, I'm still thinking about this. You know, he -- the groundwork was all laid for him not to run. They had all the reasons laid out. But he's -- he surprised everybody.

ZAHN: So when you look at the issues on paper, particularly the large deficit California has right now, Judy, what do you suspect he's going to actually run on? What do you think will be his core issue?

WOODRUFF: Well, they -- what -- as they described it to me, they view this budget deficit as an opportunity to bring what they call real reform to California. They're talking about changing the formula, the education formula between the state and local governments, so that local governments have more control over their education spending.

They're looking at upending some of the -- literally, the political structure in the state of California. They're looking at this, as they told me, they said, if he runs, it's an extraordinary opportunity to make some changes in a state that has desperately needed change for a long time.

ZAHN: Jeffrey, you were out in California the same time we were, when we were actually supposed to interview Arnold Schwarzenegger. The interview was canceled at the last minute, some people linking that to a series of stories that has appeared at the 24-hour period about some alleged indiscretions along the way.

What is Mr. Schwarzenegger going to have to confront now that he is indeed an announced candidate?

GREENFIELD: The Gray Davis people have made no secret of their intention to run, let's put it mildly, a very, very tough campaign. One of Gray Davis's top aides some time ago sent to reporters a series of stories alleging personal improprieties on the part of Arnold Schwarzenegger. This is not going to be a League of Women Voters campaign, because I think the Davis people see in Arnold Schwarzenegger a formidable threat. This is a (UNINTELLIGIBLE) who got on the ballot and got passed by the California process, the initiative process, a very expensive after-school program.

If they -- and they know they can't paint Arnold Schwarzenegger as a right-wing extremist, which was their, which was their tactic against, say, somebody like Darrel Issa, a conservative congressman.

Schwarzenegger is pro-choice, he's pro-gay rights, he's for some kinds of gun control, he's much more kind of a moderate Republican.

So I believe they're going to argue that he's not qualified to be governor, and second, that on personal grounds, you don't want him. It's not going to be a pretty campaign, I think.

ZAHN: And I'm sure they are going to bring all of our attention to the fact that he's the -- probably one of the only announced candidates that his constituents will have seen naked on film.

Let's move on to the Terminator genre, Judy, and some of the issues raised about the intense violence in some of those films. What is he -- is he going to have to apologize for any of that?

WOODRUFF: Well, I think they're going to confront that head-on. They're going to say, Look, my career was -- has been as a movie actor. That's been my role. But I'm also a serious person.

And he can point to the work he did last year, campaigning for this after-school initiative for California schoolchildren. He literally campaigned all over the state. You're showing some pictures of it now. And he was credited by serious political people, serious issue people, with putting a lot of effort into this, and everywhere he went, of course, he drew crowds. And it won, it won very -- you know, with a very respectable margin in November.

So he is given credit for being serious, as well as somebody who acts in some movies with, you might -- well, you might say questionable video. But I think they're going to tackle that straight on. (UNINTELLIGIBLE)...

ZAHN: Jeffrey, how does the White House view this? You got to talk about these very important electoral votes, which could help sway election, right, in California. Do they want a Governor Schwarzenegger?

GREENFIELD: You know, that's very good question, because last year, the White House intervened in California on behalf of former Los Angeles Richard Riordan, who was their choice for governor. He got buried in a primary because he wasn't Republican enough for the Republican Party.

And it's very important to the White House that this thing be set up for next year in a way that benefits them. This is a state with 54 electoral votes. The Democrats have won the state three elections going, you know, going away in terms of the popular vote for president.

And it's not clear whether the White House wanted this recall anyway. In fact, most people thought they would rather have had an extremely unpopular, deficit-ridden Gray Davis, a Democrat, to govern through these next couple of painful years.

So I -- I'm now speculating. But as (UNINTELLIGIBLE), as among the Republican candidates, Schwarzenegger is probably much more attractive to the White House than any of the other choices, because they're too conservative for California, they might think.

ZAHN: And as Jeffrey, Judy, and I try to heal our collective sense of whiplash here, let's go back to Charles Feldman, who's standing by outside the NBC studios where this bombshell announcement was made that Arnold Schwarzenegger, in fact, will run for governor of the state of California -- Charles.

FELDMAN: Yes. And let me fill in some more details now for you, after we had that little phone discussion before. Schwarzenegger went on to tell Jay Leno that there was a lot of conversation -- and you were asking me about that before.

He said there were lots of conversations with his wife, Maria. He says that this is going to be the first time, he joked, that she is going to vote for a Republican. Of course, Maria, being a Kennedy, is a lifelong Democrat.

He said (UNINTELLIGIBLE), this is a quote, that no one can pay him off. "No one can pay me off," he says, that people should trust him. And here's a quote that I'm sure will be in all the morning papers. Says Arnold Schwarzenegger, "Do your job for the people, and then if not, then, Hasta la vista, baby," echoing a line, of course, from his popular "Terminator" movies.

So as we've already been discussing, I'm sure, quite a bit, this was quite a shock to most of the people, including the press corps that was here for the taping of "The Tonight Show." The conventional wisdom, and I've been saying all along that the conventional wisdom in this case hasn't been worth all that much, since there is nothing conventional about what's going on here in California.

The conventional wisdom was, up until today, that Arnold Schwarzenegger was not going to run, and instead, he comes out on "The Tonight Show" during this taping for a show that'll be airing tonight, and went on to say that he was disappointed in the way things have been going in the state of California.

He says that when he moved here, things were in good shape, great shape, things have declined. He blames politicians. And this is interesting, Paula. He sort of made a move tonight to preempt some of the criticism that is going to start popping up, now that he is a declared candidate. He said that he is aware that there are going to be negative reports about him. He's aware people are going to say he has no experience in politics.

He says he's aware that there are going to be stories out there that he's a womanizer, something that has popped up from time to time in the past. But all of that, he says, in the end, didn't matter. He felt very strongly that California needed new leadership. He put the blame for the state of -- the very bad budget, if you want to call it a budget in California, on the incumbent governor, Democrat Gray Davis.

And he told Jay Leno that he decided in the most, what he called, difficult decision of his life, to run for governor of California, Paula.

ZAHN: Hasta la vista, baby, Charlie.

Let's go back to Bill Schneider, standing by in our Los Angeles studios. Are you just as surprised as the rest of us, Bill?

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: We're all surprised, including people here in California. I spoke to a leading Democrat, a leading Republican today. I just got off the phone with someone from the governor's office from the campaign against the costly recall, as it's called.

And nobody, nobody predicted this, because the conventional wisdom, as Charles just said, was he is -- Arnold wasn't going to run.

But now, look, this great race has suddenly taken on a shape. It's Gray Davis versus Arnold Schwarzenegger. And I understand Arianna Huffington became a candidate, and there are some others on the ballot. But it's really going to come down to Gray Davis versus Arnold Schwarzenegger, on separate ballots. On separate ballots.

There are a few of the others, Darrell Issa, Bill Simon is likely to run. Those are conservatives. But I think in the end, it's going to be seen as a two-candidate race. But what makes it odd is, Arnold Schwarzenegger doesn't go -- isn't going to need a majority to beat Gray Davis. All he needs is to come in first among all the other candidates on the second ballot.

ZAHN: Of course, one of the key question right now is whether we're going to see a Democrat come in and challenge Governor Gray Davis. What are the chances of that happening, Jeffrey?

(CROSSTALK)

GREENFIELD: That's right, he would not have to challenge. He or she could come in and say, I'm against this recall. But now that Schwarzenegger's on the ballot, it makes it much tougher for the Democrats all to stay out and say, Well, it's just a bunch of right- wing Republicans. That is not, I believe, going to fly on Schwarzenegger.

So with Dianne Feinstein now out, and with five days left to file, you're going to see the biggest game of no-limit Texas, hold- 'em, when do we put in the chips, do we put in the chips, can we now stand to try to fight this recall with Schwarzenegger as a moderate Republican? Can we beat him, the Democrats will say, on personality grounds, on character grounds, on experience grounds? Or do we have to field someone between now and Saturday to say, Well, if you guys are going to recall Davis, we don't want to give up the governor's mansion to a Republican.

It is absolutely fascinating, and now completely unpredictable.

ZAHN: Bill, what do you suspect will happen?

SCHNEIDER: Well, first of all, let me tell you one thing. The -- Arnold Schwarzenegger is not dynamite in the polls. "The L.A. Times" did a poll, and a lot of voters in California say they would never vote for Arnold Schwarzenegger. They don't -- they take him seriously as a movie actor, some people do, but they don't take him seriously as a politician.

He doesn't have the experience, he doesn't have the qualifications. So he's going to have to build credibility as a political figure. He doesn't start out as the commanding hero in this race.

The question is, can he bring in a lot of new voters? That's what he's expected to do, bring in people who never vote, who have nothing to do with politics, who would never turn out, to suddenly vote for someone they see as a celebrity and a popular hero.

That's why Arnold is seen as formidable. But it does not show up in the polls.

ZAHN: And Judy, let's talk for a moment about something Jeff talked about a little bit earlier this evening, the whole notion that Arnold Schwarzenegger can avoid a long-drawn-out primary campaign. Do we have any sense of what these candidates are willing to spend in this very short window of time they have?

WOODRUFF: Oh, I think that they're going to spend the limit. Gray Davis broke all sorts of limits when he ran for reelection last year. My guess is, Arnold Schwarzenegger will be willing to put any amount of money from his own pockets, plus, I'm sure, Republicans will be glad to give him more money.

We are going to see a big-spending, a lot of television ads you're going to see, and plus there's going to be what we call free media, every television show in the country is going to be interested in getting Arnold Schwarzenegger on for an interview.

And -- so you're looking at a race that -- you know, California has been notorious, let me put it this way, in the past for not paying a great deal of attention to politics. This stands that whole theory on its head, because, I think, for once, California is going to have the most-watched politics in the nation.

ZAHN: Jeff, I know you, more than anybody else, hates to speculate. But can you just help us understand what is going on inside the office of Governor Gray Davis tonight? GREENFIELD: I think they're saying what I said a few minutes ago, Humina, humina, humina. Look, (UNINTELLIGIBLE), they have so far successfully made this case within the Democratic Party that you cannot get on -- you cannot run a Democrat.

They got labor a couple of days -- just a couple of days ago to say to Democrats in California, Stay off the ballot, we want to fight this recall. Gray Davis, yes or no, and then that's what we're going to do.

But now you've got not just a rich congressman, Darrell Issa, who can spend as much as he wants, because it's his money, not just another rich candidate, Bill Simon, who lost to Gray Davis. He can spend as much as he wants.

Not just Arnold Schwarzenegger, who, we presume, has a fair-sized amount of money stashed away. You've got labor that's going to pour in we don't know how much, but millions, behind the anti-recall campaign. And I think right now the Davis campaign is thinking, We have got to now make sure that no Democrat comes into this race.

There have been some noises in the last few days from some congressmen, from some local Democratic officials, saying, We don't know if we can take the risk. And that, I think, is the most important and unpredictable, I'm sorry, feature of the next few days.

Are they going to all stay out? And...

ZAHN: Well, if we all look a little shell-shocked this evening, please understand, it is for a very good reason, even though CNN immediately shot down, I think it was Judy Woodruff, in fact, the reports last week that Arnold Schwarzenegger had decided not to run. I think we all are very surprised he made this announcement on Jay Leno.

And before we go, Jeffrey, I want to throw something else out to you (UNINTELLIGIBLE). You may not know this, but Gary Coleman, the former child star of the sitcom "Different Strokes," is also thrown his name into the ring.

And a man representing him said, Hey, wait a minute, it is true this has a farcical quality to the entire recall effort, but Gary's candidacy is no more farcical than that of Arnold Schwarzenegger or Arianna Huffington, or the comedian Gallagher.

Did they get that right?

GREENFIELD: I believe somebody once said about California that, you know, when the volcanic eruption started millions of years ago, everything that wasn't nailed shut, everything loose, rolled West. And this just gives more rise to the stereotype.

I don't think we really need to take this one all that seriously.

ZAHN: Judy Woodruff, Bill Schneider, Jeffrey Greenfield, thank you all for being with us this evening. We probably will come back to you a little bit later on. Once again, Arnold Schwarzenegger announcing just about 20 minutes ago that he will indeed face off against the incumbent, Governor Gray Davis, in this recall effort on October 7.

We're take a short break. When we come back, we will be talking with a former governor of California, Jerry Brown. I'm sure he will have some pretty interesting insights into this latest development.

Plus, we'll get back to what happened in the Kobe Bryant case today. And as we leave you, we're going to take a shot and show you what it looks like outside of NBC studios. We are awaiting a news conference from the now-announced gubernatorial candidate, Arnold Schwarzenegger, you know, the guy out with that really, really movie that's at the top of the charts right now, "Terminator 3."

We'll be right back.

(COMMERCIAL BREAK)

ZAHN: Welcome back.

We continue to cover that breaking news out of California, the bombshell announcement that Arnold Schwarzenegger, you know, the man you see in the "Terminator" movies, will run for governor of California.

Let's go back to Charles Feldman, who was standing by in the green room during the taping of the show, where Mr. Schwarzenegger made this announcement.

Charles, for folks who weren't with us at the top of the hour, tell us exactly what Mr. Schwarzenegger told Jay Leno. They have not released that tape yet.

FELDMAN: That's right. Jay -- he went on Jay Leno. We were told he was going to make his announcement about whether he was going to run or not. And as we've been discussing for a while now, the conventional wisdom was that he probably was not going to. Well, talk about a theatrical event and knowing how to play an audience.

Arnold Schwarzenegger comes out after Jay Leno's monologue. He starts talking about how things were so much better in California when he first moved here, how they've gone downhill since. He started blaming the politicians, saying that they're at fault. He blamed the current Democratic governor, Gray Davis. And then, in the event that shocked everybody clearly in the news -- in the press corps that was sitting there, taking notes, listening to every word he was saying, he announced that, for those reasons and more, he was going to run for governor of the state of California in this recall election, that is now scheduled for October 7.

You could hear a pin drop in the room, as I think the overall reaction of people was, huh? And that was probably the best way to sum it up. And then everybody myself included, ran to the telephones to get the word out that the conventional wisdom had been wrong, been proven wrong. Arnold Schwarzenegger is, in fact is running. He went on to tell Jay Leno that it was the most difficult decision of his life, that he had discussions in the past several days, and we can only imagine how deep those discussions might have been, with his wife, Maria. But in the end, he said, for the first time in her life, Maria, of course, being a Kennedy and a lifelong Democrat -- he says, for the first time in her life, she will vote for a Republican. I presume she meant him.

He says that tomorrow, he will, bright and early, file the official papers that will make him a declared candidate in this recall vote. Several hundred people, by the way, Paula, have taken out those papers, although very few of them have officially filed. They have to do that by Saturday, which is the deadline. This is shocking news, I'm sure to Gray Davis, shocking news to many of the other people, would be gubernatorial candidates. And certainly, a shock to "The Tonight Show" audience, and a shock to me, I'll admit it. It was a shock to me too, Paula.

ZAHN: We've all had to eat a little crow here this evening. We stand here in suspended disbelief.

Judy Woodruff, I know you've had a chance to talk to a lot of people who could potentially work in a Schwarzenegger campaign. Give us some more insights into the very specific family concerns Arnold Schwarzenegger had about taking this on.

WOODRUFF: Well, what I was hearing, Paula -- and this has been consistent for the last several days, since the recall became official, was that almost as soon as Arnold and his advisers met, the discussion moved in the direction of, he probably wasn't going to go for it, for two reasons. He was worried about his children and the scrutiny that his family would be subject to. The adviser said he was very worried, that even though, as the children of a movie star, they obviously get more attention than average kids, but that as the children of a governor, his schedule, their schedule would be an open book, the public would be entitled to information that they're not even entitled to now.

And beyond that, they kept saying he really wants to spend more time with his children. They're young, they're all something like between the ages of, I think it's 4 or 5 and 12 or 13. So these are young kids, still a very impressionable age. And that was said to be another reason.

What they kept insisting, Paula, though, was that the so-called personal stories about Arnold Schwarzenegger's life were not a factor. But as I know you and Jeff discussed a few minutes ago, that clearly had to be something they were talking about, whether they wanted to acknowledge it or not.

ZAHN: Bill Schneider, let's talk a little bit about what Charles Feldman -- Bill Schneider is not there, but Jeff Greenfield is -- a little bit of what Mr. Schwarzenegger communicated to Jay Leno tonight, blaming the deficit, the enormous deficit of this state on the governor and politicians. Now to be perfectly fair, there have been Democrats who argued that some of the -- what you see going on in the national economy has contributed to those ballooning deficits in California. Give us the straight scoop on that.

GREENFIELD: Well, what the Democrats argue is, Look, the energy crisis in California that ultimately cost billions of dollars was because Enron and company were cooking the books. A lot of this economy cratered because the national economy cratered.

What Davis critics say is, Yes, but you -- instead of putting the surplus into a rainy day fund, when we suddenly got this billions and billions of dollars in capital gains and income taxes, you squandered it. You spent it squandered it because you gave it to the interest groups and you caved to the liberals in the Democratic legislature. On a substantive issue, that's going to be a big debate over the next two months.

The other point I'd really like to make -- it picks up on what Bill Schneider said about whether Schwarzenegger has credibility. Earlier today, Jerry Springer, the famed talk show or freak show host said he was not run for senator of Ohio because he felt that the show blocked any attempt he had to get his message out.

And so the question for Schwarzenegger is, are people going to see him as an actor with a funny accent who sometimes walks around naked in his movies -- I don't know whether that's plus or minus in California -- or are they going to see him...

ZAHN: Depends on who you ask, Jeff.

GREENFIELD: I guess so.

Or are they going to see his work in terms of afterschool programs and his work in all kinds of charitable foundations aimed mostly at children as a sign that he's a serious public policy guy. That, as much as rumors that you were talking about, about womanizing or whatever, I think, is the challenge that he has.

But there's a real issue here about -- about California is on it's --it's on its uppers. That is, it has had one of the worst turnarounds of any state, and the question of who do you blame for that is going to be a pivotal question of whether or not this recall works or not.

ZAHN: Well, we have just the man to ask who do you blame for that in former Governor Jerry Brown, who actually was booked to talk about the recall effort. No one ever thought this announcement would come out this way in this half hour.

Governor Jerry Brown, always good to see you. Your reaction to this announcement by Arnold Schwarzenegger?

JERRY BROWN, FORMER CALIFORNIA GOVERNOR: Well, I think it adds a lot of excitement, get a lot of attention. And I don't think you ought to be ruling anyone out at this point. Remember, we had an actor named George Murphy. His opponents called him a tap dancer, but he was elected to the U.S. Senate, beat Pierre Salinger, President's Kennedy's press secretary. We also had Ronald Reagan, who my father thought was going to be some kind of an easy candidate and he went on to win 59 to 41 percent and then went on to the presidency.

So the fact that someone's an actor can actually be a boost. And the only real question is what is the demeanor and the gravity with which he will present himself during this campaign. And I think it's too early to tell.

This is a very exciting, unprecedented process, and it's not over until 5:00 p.m. on Saturday. You can probably expect a few more candidates, and then it will be something that will galvanize the nation.

ZAHN: OK. When you say, we can expect a few more candidates, do you want to make any predictions? Do you see more candidates on the Republican side as well as the Democratic side?

BROWN: Well, I mean, you still -- you'll probably might get some -- you'll get some candidates on the Republican side, and you may get a Democratic candidate, because while labor and other key constituencies are attempting to form a phalanx of protection for Governor Davis, nevertheless, underneath and kind of behind the scenes, people are saying, should there be an insurance policy? Should we Democrats have an insurance policy just in case this recall is not defeated? And therefore, either the lieutenant-governor or perhaps our insurance commissioner, somebody may hear the calling, and given a lot of ambitious Democrats, even though it's a rather turbulent course, there may be somebody I would expect....

ZAHN: All right. Are you talking about yourself, sir?

BROWN: No.

ZAHN: Are you hearing that call?

BROWN: Well, I've been hearing that call a long time. But I don't think it's prudent step at this point.

ZAHN: You say it's not a prudent step at this point. You've got until Saturday, sir.

BROWN: I do, but it's not -- I'm really more interested in running for attorney general of California. It's a position my father had. I'm a lawyer. I think that might be a more appropriate place than governor.

ZAHN: So you're on the record here completely ruling out the possibility that we will see you add your name to the list?

BROWN: Yes. I'm putting that right on the record, yes.

ZAHN: All right. Jerry, if you wouldn't mind standing by, we just want to remind people that Arnold Schwarzenegger will be holding a news conference, we're told within minutes. If you don't mind being patient, we're going to weave you in and out of this conversation.

Jerry, you brought up the credibility issue and how your father was quite surprised by the effectiveness of Ronald Reagan's campaign. Bill Schneider, citing some "L.A. Times," polls which would suggest that credibility could be a problem from Arnold Schwarzenegger. Just some insights on that.

BROWN: Oh, yes, I think it is a problem. But then -- and the media will surround him with some aura of questionableness because of "The Terminator" and all that. But if -- when the cameras go on, he speaks with clarity and confidence, then he'll have his opportunity. And if in the first few weeks he lays out a good impression -- or the first few minutes that he's exposed on TV, he'll -- you can't write him out -- write him off until he's passed through that first gate of getting acquainted with the voters. And he may blow it or he may not. But anybody who tells you they know the answer does not understand contemporary media politics or certainly the state of California.

ZAHN: Well, that's -- that's the understatement there. Jerry, on its surface, one would think that Arnold Schwarzenegger's personal story is that of a great American success story. Here's a guy who comes over from Austria, he speaks very little English, he becomes one of the world's top bodybuilders. He turns that into a successful real estate business at the same time he was pursuing acting. How attractive is that story to potential California constituents?

BROWN: Well, as I say, it has a potential. But remember, you haven't gotten through the recall yet. There's a lot of sentiment against the recall. After all, it creates a process, whereby a candidate could actually get elected by a very small plurality, which doesn't sound very democratic in the spirit of the majority rules. That is going to give people a lot of pause and that will be a very powerful argument on the no side.

If it happens that the yes side prevails, then of course, it's a free-for-all on the other side. I think it's just too early to tell, because when someone hasn't run for office, it leaves a lot of questions until they run that gauntlet of gaffs and misspoken words and things that come up about him. It's always a question mark until you get out there.

But I have to say, that anybody who steps into this fray is showing a certain amount of confidence and willingness to make bold moves. On the Democratic side, that hasn't been the qualities in evidence, other than the governor who, of course, has to defend himself.

ZAHN: I still want to hear you name some Democratic names. Any names you think we might see popping up on Saturday?

BROWN: Possibly the lieutenant-governor could jump in. He has a rather unique provision that there's a court suit that says that actually the second part, that allows for the choosing of a candidate, if the recall succeeds is unconstitutional or violates what the -- not unconstitutional but violates the law that says you only go to the second part, if appropriate. Since a vacancy would be created by the recall, then the lieutenant-governor, under the constitution in another part of the constitution, says he is -- he takes over.

So he has that little edge. Then, of course, you have the insurance commissioner, he may be looking at it. Who knows what Democrats may be lurking out there, wondering if history's going to pass them by.

ZAHN: What would you have done, if you had been in Governor Davis' shoes?

BROWN; Well, you know, it's not -- it's always easy to second- guess. But I do think the two principle problems were the energy crisis and quite frankly, I had a few times the prop 13 crisis, and then we had the business of the med flies. And I made real errors in both, I delayed. It wasn't pleasant. I didn't see an easy way out. So I just let it fester. I'm afraid that's what happened in the energy crisis. If I did have hindsight, I would have said attack it, get at it, force the energy companies to produce the energy, make dramatic bold moves.

That's number one. Number two, you get to the fiscal problem. Again, it came with a burst of a bulb. Could happen to anybody. Pete Wilson had had a $14 billion deficit. A number of governors ended with deficits. So the only thing when the legislature was deadlocked, the only real answer at that point was to go to the people and have, in a reserve option, an initiative to be presented to the people at a special election to provide the revenue and introduce the appropriate cuts.

I think that could have been done. It still can be done, because once you're up there as governor and the legislature, because they're deadlocked, will not produce what the law says they need to produce, namely a balanced budget, then the governor has no other option but to go to the people, not in the recall, but by way of initiative, and there with 8 percent of the registered voters you can provide yourself a solution that the people can vote yes or nay on.

ZAHN: Well Governor Jerry Brown, we appreciate your insights and your patience tonight. We're going to ask you to stand by and remind people why we continue to have our cameras trained on an empty podium, that is because Arnold Schwarzenegger will soon be holding a news conference. We will be covering it live.

In the meantime, let's go back to Los Angeles. Arianna Huffington, a columnist that we know and has frequently been a guest on this show announced her candidacy today for governor of California. Now Arianna, your reaction to Arnold Schwarzenegger's announcement.

ARIANNA HUFFINGTON, CALIF. GOV. CANDIDATE: Well actually, it's really good news for those of us who want to see more voters pay attention to this election, and for the opportunity it gives to an independent like myself, to get those new unlikely voters, as "The Post" has called them to focus on what a progressive independent governor could do in terms of the strangle hold of special interests in Sacramento.

On top of it, from my point of view, this going to be the hybrid versus the Hummer because I have been speaking out in favor of hybrid cars and Schwarzenegger has been the spokesperson for the Hummer, the least fuel efficient vehicle on the road.

ZAHN: Now Arianna, you can't tell me tonight you're thrilled he's running. I mean, I know in a conversation we had last week on the air, you were feeling pretty good about entering into the fray as an independent. You worried about any votes he will be siphoning off?

HUFFINGTON: I think the contrast between Arnold Schwarzenegger on the environment, which is a critical issue in California, is going to be very important as will the fact that Schwarzenegger will have to run as a Bush Republican which is what he is. And the centerpiece of my campaign is connecting the dots between the disastrous Bush policies in Washington and the impact they have had in California. The tax cuts, the cozy relationship with Enron and other energy companies, this is going to be very hard for anybody to defend. And Darrell Issa's defense is going to be be indistinguishable from Arnold Schwarzenegger's defense.

ZAHN: So, Arianna, I understand where you think you can differentiate yourself, but what are the chances, in the end, that it will be Arnold Schwarzenegger that could end up being governor of the state of California?

HUFFINGTON: Paula, this is a race which nobody can predict. So much will depend on who turns out to vote. How many young people we are able to mobilize, minorities. Our Web site, which went up today ariannaforgovernor.com has already been flooded with requests to volunteer, offers of money. These are all from people who are feeling shut out of the system. These are the people we are appealing to, as well as middle-aged voters like myself, who are feeling that the special interests have really taken over California politics.

ZAHN: Jeff, I see you shaking your head. What are you thinking, my man?

GREENFIELD: I'm thinking there's an only in America quality to...

HUFFINGTON: Hi, Jeff

GREENFIELD: How you doing, Arianna. This is going to be the first debate that's going to require simultaneous translators.

ZAHN: Would you like to volunteer?

GREENFIELD: No, no. But in a classically -- in that sense, it really is -- it is an only in America thing. But I guess the question that I'm wondering is Arianna, you called the recall, I think at one point ill-advised, so are you now saying to voters, vote for the recall and vote for me or are you saying, vote against the recall but just in case Davis is recalled, vote for me. Where are you on that?

ZAHN: Trick question, Jeff.

HUFFINGTON: Yes, I'm actually saying to the voters, as I said at the press conference this morning, vote your conscience. Vote against the recall. If you want to send a message to Republicans that a power grab like this will not be continued in the future, that we need to change the recall provision or vote for the recall, but whichever you do, vote for me as an independent progressive alternative.

I have many very great friends, supporters of this campaign who are passionately against the recall and that's a very legitimate position. But at the same time, even though I have been against the recall process, right now, it provides a stunning opportunity for an independent which would not be available in a normal election.

ZAHN: Arianna, I know your staff has been working the phones since this announcement was made. Can you give us any feedback and anything you've heard from Governor Gray Davis' camp?

HUFFINGTON: Actually, no, I haven't heard anything from Governor Gray Davis' staff. I have heard from Dick Riordan, who very charmingly, he is a friend, Nancy Riordan is a friend, called yesterday to wish me luck and today I run into Nancy Riordan and she wished me luck, so they must have known they were not going to be in the race.

ZAHN: Governor Jerry Brown, you can rejoin us here. I know you're still standing by. Anything you want to add.

HUFFINGTON: Hi, Jerry.

BROWN: Hi, Arianna. No, I wouldn't count Gray Davis out. This man is a very disciplined, very experienced, highly intelligent individual. He's fighting with,you'd have to say,a weak hand at this point. But this is an unprecedented process. It does go against the spirit of majority rule, because the one who finally gets elected under a recall scenario could get elected with 25 percent of the vote.

So It's early. It may be a disaster for him, but he's a formidable person under pressure. I think, you'd have to put him as a very strong contender at this point, even though this recall is threatening, no question.

ZAHN: Can I throw a question out to both of you, and it's a question I've heard posed by a number of California voters, and they're saying, with the precedent being set by this recall effort, are you going to see a situation down the road, when you see someone's poll ratings drop 25 percent, you know it going to basically stand for an automatic recall effort? Arianna?

HUFFINGTON: Well actually, Paula, that's why I believe very strongly, that on October 8, we need to proceed to change the recall provision. Right now, as you know, paid signature gatherers can collect signatures, therefore it is a matter of money putting a provision like that on the ballot. Also, I would make it much harder to clear the bar to become a candidate. These are changes we have to make to prevent something like that in the future. But while it's happening, let's use this opportunity to clean house, that's really the message of my campaign and it's resonating because look at the inequities of our system. Look what's going on and how many people are suffering with all the cuts, while we are losing about $5 billion in tax revenue because of tax loopholes.

ZAHN: Jerry?

BROWN: Well, you know, this is a provision that's been around since 1911. It hasn't been used in this manner successfully. Things have a way of working out. We're going to learn a lot in this recall process. At the end of that, there'll be plenty of time to rethink where we go. If Davis succeeds, or if he doesn't succeed, then, we'll be in a position to know, was this a positive experience or was this one more gigantic diversion and sub version of majority rule? I'd say, for the Democratic point of view, Democrats are worried that this recall was inspired by a very far right Republican.

That he paid a number of these signature gatherers and is exploiting a moment that did derive from the dot.com burst, and from the fact that the California revenue is so dependent on the elastic income tax you can get great rushes of revenue that can then disappear. And the lesson here is you need a very steady revenue source. And all those things in a substantive way will be taken up. Right now, we're going to have, I'd have though say, somewhat of a circus atmosphere. There may be some substance along the way, but if you can -- if past is prologue, you know, Katie bar the door for what's going to be unleashed between now and the election day of the recall.

ZAHN: What is it about Governor Davis, Mayor Brown, that inspires so much negative reaction from even fellow Democrats?

BROWN: Well, I don't -- you know, I think he gets a bum rap on that. You go back and look at Harry Truman. He was down in the 20s, too, in 1950. My father became very unpopular, particularly after the Carl Chessman case. I certainly had problems of my own. And then Pete Wilson was really down in the dumps. Being governor of California is not for everyone. It's a very diverse state with totally contradictory demands and wishes from the right to the left. Let's spend lots of money, let's not tax this. To the north to the south. And it's the rare governor, in the last 50 years, that comes through six or seven years without a lot of egg on his face. So, I think this is kind of par for the course. You're in a constant pressure with your own party, because they put the pressure up to spend more money. There are a lot of constituencies to be taken care of. And yet, to win majority from a lot of people, you can't take care of those constituencies. So, in truth, it's a matter of time before they want to throwing you out.

ZAHN: Jerry, I don't want you this think I haven't been listening to you. But for any who has been watching that tree and all the reporting standing around it suddenly jumping in place. Here we have Arnold Schwarzenegger running for governor of California.

ARNOLD SCHWARZENEGGER (R), CALIF. GOV. CANDIDATE: First of all, let me just say thank you very much for assembling so quickly here and being part of this announcement. As I said earlier, this was a very difficult decision to make. As I always have said, that when I'm finished with my Terminator promotion, I would then deal with this issue if I would run or not. Well, last week, on Thursday, I visited my last city, which was Mexico City. After I came back, I started talking to my wife about this and with my children about this, about the idea of running for governor. And they don't give you much time for something like that. This time, it had to be a very quick decision. So within two weeks I had to make up my mind.

So I -- my wife told me that she would support me, no matter what the decision is. I therefore decided to run for governor of this great state because I feel very strongly that we have some serious problems in this state. We have businesses leaving here everyday. We have people leaving the state everyday. We see a budget that is the biggest budget deficit that we've ever had in the history of California. We see our ratings, the junk bond ratings that we're getting, it is disastrous. We see a governor being recalled. We see a education system that is last in the country. We just see things declining and declining and declining. And the biggest problem that we have is, that California has been run now by special interests. All of the politicians are not anymore making the moves for the people, but for special interests and we have to stop that.

So, this is why I'm running for governor. I will go to Sacramento and I will clean house. I will change that. As you know, I don't need to take any money from anybody. I have plenty of money myself. I will make the decisions for the people.

QUESTION: How much did Dianne Feinstein's decision play into this?

SCHWARZENEGGER: Nothing that has happened in the last 14 days made any difference in my decision making. My decision was based on how my family would respond, my children and my wife. My wife, I happen to have the greatest wife in the world. She is a fantastic partner. She said to me that she supports any decision that I make. That was, to me, the most important thing. If she would have been against me campaigning and me going for the governorship, I would not have done it.

QUESTION: Mr. Schwarzenegger, when did you tell that beloved wife you were going to run, because everybody around you says that you have caught them in a big surprise. When did you tell Maria Shriver you were going to run.

SCHWARZENEGGER: Maria and I had discussions over the last two weeks. Slowly it crystallized of what my decision will be, that I would be running for governor of the state of California. And this is a process that was a very long and very difficult process, because you have to put all of those things on a scale. You have to put on a scale, you know, that you're stopping with the movie career, you're stopping some of the business relationships that make you a lot of money. You have to put on that scale also of what effect this is going to have on your family and your children. The children are very important to me. I had a terrific upbringing in Austria, so obviously, I want to provide a great upbringing for my children and be there for them as they grow up. So all of those things were very important. So -- but as time went on it crystallized this is what I should do.

QUESTION: Did you say to her you were going to run. Did you tell her this afternoon, after the show, before the show?

SCHWARZENEGGER: I'm not going to comment on that nor give any details of what happened between my wife and I. All I can tell you is that she's 100 percent supportive, and has said that all the way along. I want to take under consideration what her feelings are and my children's feelings are.

QUESTION: You're to the left of many California Republicans...

(CROSSTALK)

SCHWARZENEGGER: Say again.

QUESTION: You're to the left of many California Republicans but to the right of many Democrats. Who will elect you, bring you into office?

SCHWARZENEGGER: I speak directly to the people. And I know that the people of California want to have better leadership. They want to have great leadership. They want to have somebody that will represent them. It doesn't matter if you are a Democrat or Republican, if you're young or old, what the racial thing is, nothing matters to me. To me what matters is that I want to represent everyone in California. That is the important thing.

QUESTION: What about the immigrant population?

SCHWARZENEGGER: Everyone is welcome. As you know, I'm an immigrant. I came over here as an immigrant. What gave me the opportunities, what made me be able to be here today, is the open arms of Americans. I have been received. I have been adopted to America. I have gotten all the opportunities because of America. I have seen first hand, coming over here, with empty pockets, but full of dreams, full of desire, full of will, to succeed. But with the opportunities that I had available, I could make it. And that's what I want everyone to be able to do. This is why we have to get back and bring California back where it once was.

(CROSSTALK)

One more question.

QUESTION: What did Dick Riordan say, we know he is a confident and close friend of yours was considering to run.

What did he say when you told him you were going to run or haven't you told him yet?

SCHWARZENEGGER: I will let him speak for that. Dick Riordan and I are great, great friends. I have been a big supporter of his when he was mayor. And we had many, many discussions over the last 14 days because he's a close confident. And we always want to make sure everyone is guessing of who is going to do it.

UNIDENTIFIED MALE: Last question, please. Last question.

(CROSSTALK)

SCHWARZENEGGER: Thank you very much.

QUESTION: Can the Terminator fix what's wrong with California, with the state in the deficit it's in?

SCHWARZENEGGER: Well, I can tell you that we have to clean house in Sacramento. The most important thing is that we bring business back to California. There are more businesses leaving California now than ever before. When businesses come back, revenue comes back, when revenue comes back we can afford all kinds of different programs that are very important. We want to make sure that the children are not left with without any books. We want to make sure that our children have the books, that they have their place in the classroom. We want to make sure hay they have after school programs. We want to make sure the mothers have affordable day care. We want to make sure the older folks have their care that they need. That everything has to be provided for the people. We have such a great state, there's no reason why we are in the state we are in today.

Thank you.

(CROSSTALK)

SCHWARZENEGGER: Thank you very much. And thank you. And I'll be back, be back.

ZAHN: We have heard Arnold there. Two of those phrases from his film tonight, I'll be back. Arnold Schwarzenegger, confirming the fact that he will indeed run for governor of California. And this latest recall effort in his state, promising to clear house in the California, state that he says has been over run by special interest. He praised his wife Maria for her support. Saying there is nothing in the last two weeks that really specifically changes his mind. But as he thought about more, the idea of running crystallized in his head. There you have it, Arnold Schwarzenegger, officially a candidate, a Republican Candidate for the governor of California. Thanks so much for joining us tonight.

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