Busting the budget

It’s curtains for Gov. Arnold Schwarzenegger. But what about the rest of us?

Illustration By robert armstrong

Mirror, mirror, on the wall, who’s the scaredest of them all? Here’s a few hints. He’s appeared oiled and naked in front of large groups of howling, raucous men. He’s come back from the future as a robot to both destroy and save mankind. For the past five years, he’s played the role of “the people’s governor” with convincing if disingenuous aplomb. And now Gov. Arnold Schwarzenegger has gone totally girlie-man.

There were no witty one-liners at the press conference last Thursday when the governor laid off 22,000 part-time state employees and cut the pay of 200,000 permanent workers to the federal minimum wage. No tough-guy talk, no display of fattened money clip. The cutbacks were the only way the state could avoid a “full-blown cash crisis” brought on by the annual summer budget impasse, Schwarzenegger insisted. He apologized in advance to the employees and their families, cowardly laying all of the blame on the Legislature.

“It’s a terrible situation to be in,” he stammered. “I don’t think any governor wants to be in this situation … ”

Guess he forgot to mention that during the recall campaign. Some public servants spend the greater portion of their lives preparing to rise to such occasions. Not this caveman. Our world frightens and confuses him. Hear him confess his bewilderment:

“When you have a very complicated deal like this, where you have a budget problem and dysfunctional budget system, and on top of that a declining economy, and you’re talking about reforming the budget system, where you talk about the rainy-day fund, where you talk about making your cuts, and all those kinds of things, as I said, there’s a lot of moving parts, and this is very complicated.”

You know, like Legos.

Not even Arnold’s beta-carotene-tinged complexion could cut the doom and gloom. The Running Man is running scared, as he should be. In Terminator terminology, he’s facing the equivalent of Skynet, a vast globalized computer network financed in this case by $30 trillion or so in dodgy, securitized home loans, many of them originating right here in California. The recent failure of Pasadena-based IndyMac Bank was only the first in what promises to be a series of bank runs not seen since the Great Depression.

Get used to that phrase “not seen since the Great Depression.” You’re going to be hearing it a lot.

Truth be told, there’s nothing much Schwarzenegger or anyone else can do about it. Smart people, like longtime legislative analyst Elizabeth Hill, saw the crash coming early and jumped ship. As for the nameless, faceless Legislature, term limits mean never having to say you’re sorry. They may be craven, but they’re not stupid.

As for the rest of us, at least one observer has noted that “clinics, programs for the elderly, the disabled and many others run the risk of being shut down or severely constrained by the governor’s decision.” However, if you’re a Wall Street bond holder, you’re in luck. The executive order commands the state treasurer to “take all actions necessary to maintain the State’s ability to pay its bond obligations, including payment of principal and interest with funds in the State Treasury and take all actions that are necessary to protect the State’s funds and investments.”

Is it any wonder the financiers adore Arnold?

No doubt Schwarzenegger has looked deeply into the mirror and trembled at what’s coming. He has two years left on his second term, and if past economic downturns are any indication, this year’s $15 billion budget deficit will be next year’s $30 billion deficit. A couple of Sundays ago, he floated the idea that he’d be willing to accept a cabinet-level position in the Obama administration, should the Democrat win this fall. By the time this is all over, Arnold will be lucky if he’s offered Secretary of Animal Control.

Democratic legislators and the state’s daily-newspaper pundits are already piling on, chastising Schwarzenegger for his lack of involvement in the current budget fiasco, and rightfully so. But so far as I have read, only one commentator, The Sacramento Bee’s Peter Schrag, has correctly identified the governor’s executive order for what it is: a cry for help. By repeating the Republican mantra of no new taxes throughout his entire time in office, Schwarzenegger has backed himself into a corner, and there’s no easy way out.

“The governor’s gesture last week seems most of all a wish that somebody, presumably the Democrats and maybe state workers, will come forward to provide cover for a retreat from his rhetoric of the past five years,” Schrag writes.

It didn’t have to be this way, Schrag notes. At the height of his popularity, the people’s governor might have actually persuaded the electorate that they can’t continue to have something for nothing. Now that window has closed; it’s every man, woman and child for themselves. It’s long past time for the people to look into the mirror and ask if they like what they see.