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American Morning
Challenges for Arnold Schwarzenegger
Aired November 17, 2003 - 08:06 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.
BILL HEMMER, CNN ANCHOR: Once he becomes governor, what are the challenges, the first challenges, for Arnold Schwarzenegger, and are there national implications in the State of California, maybe for the rest of the country?
Jeff Greenfield checks in on this topic now.
Nice to see you.
Good morning to you.
JEFF GREENFIELD, CNN CORRESPONDENT: Good to see you.
HEMMER: The hoopla's over. What's on the governor's plate now?
GREENFIELD: Well, he's got two challenges. The first one that Frank alluded to, what do you do about a budget gap that is somewhere in the $14 billion range, and that's structural, built into the spending and getting. His new budget director calls that number staggering.
And how do you make his proposals reality in a state where every other statewide office holder is a Democrat and where Democrats hold huge majorities in both houses of the legislature?
Now, Schwarzenegger has already won broad approval for his cabinet and his team. And it is a mix of Republicans and Democrats, independents, including as his education chief the former Los Angeles Mayor, Richard Riordan. You'll remember he wanted to be governor, but he lost the GOP primary back in 2002.
But now Schwarzenegger has to deliver on what could seem to be conflicting promises. He wants to cut the budget gap, keep education spending high, no new taxes. As you've heard, repeal the car tax, which is a $4 billion hit to the budget.
He's expected to call the legislature into special session almost immediately and he will likely propose some budget cutting in terms of labor contracts that won't sit well with the Democratic majorities.
HEMMER: So you look at a politician right now trying to get all this sorted out. Potential weapons, or what, in California?
GREENFIELD: Yes, he has some weapons in his quiver, if that's where you keep weapons. First, he clearly has a mandate to shake things up. He won the recall by 17 points over his nearest rival and it shows, really, that voters wanted a new broom to sweep through the capital.
And if he can't get what he wants, remember, this is California. Schwarzenegger could put his proposals directly on a statewide ballot through the initiative and ask the voters to enact these changes.
Second, I think -- and this is one to keep an eye on -- he could catch a break with economics. One reason California found itself with a $38 billion gap at one point was that more than 40 percent of its money comes from income and capital gains taxes. And after the dot- com crash, those monies dried up.
Well, there are signs, particularly in Silicon Valley, that the California economy is reviving and that could put extra money into the state coffers before he lifts a finger.
HEMMER: So now we're 12 months away from the national election.
GREENFIELD: Oh, really?
HEMMER: Yes, as a matter of fact, on the calendar.
GREENFIELD: I read about this.
HEMMER: You have the largest take of electoral votes in the State of California.
GREENFIELD: Yes.
HEMMER: We've talked about this a lot.
GREENFIELD: Yes.
HEMMER: National implications, if any?
GREENFIELD: I am skeptical in that direct sense. I've talked about this, as you've said. I cannot find any correlation between who governs a state and what happens in a presidential race in terms of who gets, you know, the votes. If the presidential election is competitive, you have to assume California will very likely go Democratic.
So the question then is, is the Schwarzenegger phenomenon going to hit other states? Well, no other state has put power directly in the people's hands the way California has through the initiative and the referendum. The people there are used to that system and that's one of the reasons this happened.
I also know of no other state with this weird combination of horrible fiscal woes, a personally very unpopular governor like Gray Davis and the recall mechanism. They all existed side by side by side.
However, even without that, the saga of this new governor, the biggest state in the country, a world famous actor coming in with one of the most daunting challenges any new governor has had, that's a great story even if there aren't national implications. HEMMER: And the rubber is about to meet the road. And we'll see.
Thank you, Jeff.
GREENFIELD: And in California with all those cars, that's a wonderful metaphor.
HEMMER: And a lot of freeway.
GREENFIELD: All right.
HEMMER: Talk to you later.
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 November 17, 2003 - 08:06 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
BILL HEMMER, CNN ANCHOR: Once he becomes governor, what are the challenges, the first challenges, for Arnold Schwarzenegger, and are there national implications in the State of California, maybe for the rest of the country?
Jeff Greenfield checks in on this topic now.
Nice to see you.
Good morning to you.
JEFF GREENFIELD, CNN CORRESPONDENT: Good to see you.
HEMMER: The hoopla's over. What's on the governor's plate now?
GREENFIELD: Well, he's got two challenges. The first one that Frank alluded to, what do you do about a budget gap that is somewhere in the $14 billion range, and that's structural, built into the spending and getting. His new budget director calls that number staggering.
And how do you make his proposals reality in a state where every other statewide office holder is a Democrat and where Democrats hold huge majorities in both houses of the legislature?
Now, Schwarzenegger has already won broad approval for his cabinet and his team. And it is a mix of Republicans and Democrats, independents, including as his education chief the former Los Angeles Mayor, Richard Riordan. You'll remember he wanted to be governor, but he lost the GOP primary back in 2002.
But now Schwarzenegger has to deliver on what could seem to be conflicting promises. He wants to cut the budget gap, keep education spending high, no new taxes. As you've heard, repeal the car tax, which is a $4 billion hit to the budget.
He's expected to call the legislature into special session almost immediately and he will likely propose some budget cutting in terms of labor contracts that won't sit well with the Democratic majorities.
HEMMER: So you look at a politician right now trying to get all this sorted out. Potential weapons, or what, in California?
GREENFIELD: Yes, he has some weapons in his quiver, if that's where you keep weapons. First, he clearly has a mandate to shake things up. He won the recall by 17 points over his nearest rival and it shows, really, that voters wanted a new broom to sweep through the capital.
And if he can't get what he wants, remember, this is California. Schwarzenegger could put his proposals directly on a statewide ballot through the initiative and ask the voters to enact these changes.
Second, I think -- and this is one to keep an eye on -- he could catch a break with economics. One reason California found itself with a $38 billion gap at one point was that more than 40 percent of its money comes from income and capital gains taxes. And after the dot- com crash, those monies dried up.
Well, there are signs, particularly in Silicon Valley, that the California economy is reviving and that could put extra money into the state coffers before he lifts a finger.
HEMMER: So now we're 12 months away from the national election.
GREENFIELD: Oh, really?
HEMMER: Yes, as a matter of fact, on the calendar.
GREENFIELD: I read about this.
HEMMER: You have the largest take of electoral votes in the State of California.
GREENFIELD: Yes.
HEMMER: We've talked about this a lot.
GREENFIELD: Yes.
HEMMER: National implications, if any?
GREENFIELD: I am skeptical in that direct sense. I've talked about this, as you've said. I cannot find any correlation between who governs a state and what happens in a presidential race in terms of who gets, you know, the votes. If the presidential election is competitive, you have to assume California will very likely go Democratic.
So the question then is, is the Schwarzenegger phenomenon going to hit other states? Well, no other state has put power directly in the people's hands the way California has through the initiative and the referendum. The people there are used to that system and that's one of the reasons this happened.
I also know of no other state with this weird combination of horrible fiscal woes, a personally very unpopular governor like Gray Davis and the recall mechanism. They all existed side by side by side.
However, even without that, the saga of this new governor, the biggest state in the country, a world famous actor coming in with one of the most daunting challenges any new governor has had, that's a great story even if there aren't national implications. HEMMER: And the rubber is about to meet the road. And we'll see.
Thank you, Jeff.
GREENFIELD: And in California with all those cars, that's a wonderful metaphor.
HEMMER: And a lot of freeway.
GREENFIELD: All right.
HEMMER: Talk to you later.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
