Conan the Budget Cutter
BARNES, FRED
Conan the Budget Cutter Memo to Arnold: Get tough on spending and don't raise taxes. BY FRED BARNES CAN ARNOLD SCHWARZENEGGER govern California? Of course he can, so long as he adheres to rule...
...Democrats insist it's not...
...A tax hike was inescapable for Reagan, but for Schwarzenegger it's not...
...In July, Republicans released a 58-page list of cuts totaling $2.72 billion, some of which Davis had proposed but then abandoned...
...Brulte, whose top aide has been appointed Schwarzenegger's transition staff director, says the new governor "should be able to do it without a tax increase...
...And if borrowing isn't an option, make sure any tax hike is tiny and temporary...
...Another sign of Schwarzenegger's intentions is his hiring of Donna Arduin, Florida governor Jeb Bush's budget director, to conduct an audit of California's finances...
...For 16 years, spending by the Democrat-controlled legislature was restrained by Republican governors, first George Deukmejian, then Pete Wilson...
...From all indications, Schwarzenegger understands this...
...Tom McClintock, the Republican state senator who ran against Schwarzenegger in the recall election, has urged a more radical approach—balancing the budget by suspending required spending and reducing current expenditures 9.5 percent...
...For Schwarzenegger, there's only one way to redeem his campaign promise of no new taxes (bets, of course, being off in the event of a major earthquake or 9/11-like terrorist attack...
...Still, given California's humon-gous deficit, the question is whether it's feasible to rely solely on spending cuts...
...Could it be possible that all this new spending involves essential government services the public can't do without...
...Her reputation is for locating spending cuts and averting tax increases...
...If I were a Democrat, I'd be a little bit concerned about his coming into my district and saying I'm an obstacle," says Republican strategist Ken Khachigian...
...That's by submitting a budget in January with no new taxes...
...A large majority of California wants him to be successful...
...As governor, he can achieve yet one more audacious goal by keeping his promise on taxes, restraining spending, and taming Democrats...
...Not while I'm around...
...Schwarzenegger starts with significant advantages, not least the momentum from his extraordinary election...
...Credible budgets with deep spending cuts are not unknown in California...
...And as governor of California from 1966 to 1974, he made fools out of his critics...
...Of course he can, so long as he adheres to rule number one for Republican governors: Don't raise taxes without first making a heroic effort to wipe out a deficit by spending cuts alone...
...Savings could also come from reduced debt payments...
...The Democrats have gotten everything they wanted for the last five years," says Brulte...
...shortfall...
...But in 1998, with the election of Davis, Democrats took full control of the California government...
...True, Reagan raised taxes his first year, but a change in budgeting process allowed his predecessor to spend revenues earmarked for Reagan's term...
...If [Schwarzenegger] wants to take money away from the aged, blind, and disabled, or if he wants to take money away from poor women and children, I don't think so," said senate majority leader John Burton of San Francisco...
...Jim Brulte, the Republican leader in the senate, says the economic recovery should generate $2 to $3 billion in revenue beyond current projections...
...Gray Davis and the Democratic legislature for "spending, spending, spending" as revenues fell off...
...Post-election, he's renewed his pledge to concentrate on spending, not taxes, and faulted Gov...
...To produce a balanced budget without new taxes, Schwarzenegger may not have to find cuts of $12 billion as currently envisioned...
...Two conservative Republican governors, Bob Riley of Alabama and Kenny Guinn of Nevada, have violated this important rule of political survival and now their governorships are in ruins...
...And the recall was a reaction to their getting everything...
...So Schwarzenegger will have to fight Democrats to succeed as governor...
...If he'd wanted to use the audit to justify raising taxes, he wouldn't have summoned Arduin...
...His life as an immigrant in America is a story of fulfilling almost impossible dreams...
...Not a chance...
...Last February, state senate Republicans offered a budget that included $5.1 billion in reduced spending followed by a two-year freeze on new expenditures...
...The governor is the one being recalled, but the legislature is even less popular...
...She knows where the bodies are buried" in state budgets, says Steve Moore of the tax-phobic Club for Growth...
...The California press—and the national media, for that matter—are filled with stories about the difficulty of finding enough spending cuts...
...Nor are Schwarzenegger's advisers seeking wiggle room on taxes...
...If spending cuts won't suffice, borrow to cover the Fred Barnes is executive editor of THE WEEKLY STANDARD...
...Democrats have enormous clout not only because of majorities in both legislative houses, but also because it takes a two-thirds vote to pass a budget...
...And from 1979 to 1990, spending was limited by law to no more than the rate of population growth and inflation combined...
...It's a fight he can win...
...Democrats belittle Schwarzenegger as an actor unschooled in policy-making, but Ronald Reagan once noted that having been an actor really comes in handy in politics...
...Democrats rejected them, though the cuts would have reduced the amount of borrowing needed for a balanced budget...
...He's going to solve the budget problem by cutting spending and not by raising taxes," said former secretary of state and treasury secretary George P. Shultz, one of Schwarzenegger's closest advisers...
...She did exactly that for three Republican governors—Bush, John Engler of Michigan, and George Pataki of New York...
...Spending skyrocketed 40 percent in the past four years...
...In truth, the budget is a target-rich environment...
...Many budget makers are skeptical that the audit . . . will find billions of dollars in waste . . . or turn up the kinds of surprises [Schwarzenegger] predicts will provide a guiding light toward fiscal health," wrote Evan Halper and Jeffrey Rabin in the Los Angeles Times...
...If Democrats are a roadblock, Schwarzenegger can appeal directly to the public, which is already on his side...
...Democrats in the legislature bitterly oppose a diet of spending cuts...
...Riley was humiliated when voters in a statewide referendum overwhelmingly rejected his proposed tax hike...
...Guinn sparked a recall drive that's serious but likely to fail...
...The math is tough," according to state treasurer Phil Angelides...
Vol. 9 • October 2003 • No. 6
