Bruised Schwarzenegger still chases California dream

By Andy Goldberg Jan 11, 2006, 10:16 GMT

Sacramento - Appearing undaunted by the effects of his weekend motorbike crash, California Governor Arnold Schwarzenegger pressed ahead Tuesday with his ambitious plan to transform California with the biggest spending plans in the state's history.

The former world-champion body builder and action-movie star unveiled a record 125.6-billion-dollar annual budget less than a week after outlining a 20-year, 222-billion-dollar proposal to modernize the state's infrastructure.

The massive spending proposals come two years after a special recall election engineered by Schwarzenegger on his claims that the Golden State was on the brink of bankruptcy.

The centrist Republican pledged to put California on a spending diet and to reform the political system. Despite his massive early popularity, he failed to muster the bipartisan consensus necessary to push his controversial ideas through the state legislature, controlled by the centre-left Democratic Party.

His nadir came in November, when voters overwhelmingly rejected four ballot measures proposed by Schwarzenegger, casting a shadow over his re-election prospects in 10 months against a field of lesser-known candidates.

His initial reaction to the referenda defeats was to pledge to listen more closely to voters' grievances. Then, he launched an election-year spending offensive that most sovereign nations would covet.

Financed by a proposed 68-billion-dollar bond measure, the Strategic Growth Plan calls for a dramatic overhaul of the once- vaunted California freeway system, which has fallen far behind the state's population explosion over the last 30 years.

Other sectors targeted by Schwarzenegger include the state's ports, overcrowded schools, polluted air, strained hospital network and universities. Also due for rehab are California's decrepit prisons and the levee systems that protect vital regions of the state from flooding during the Pacific rainy season.

'Anyone that says I am changing positions is totally wrong,' Schwarzenegger declared, arguing that the state government's improving fiscal condition allows him to lead in new directions.

'I always made it clear that when I took over the state as governor we were in a disastrous situation economically, and we didn't have enough money in our treasury.'

Some Democrats were quick to blast the plan as a cynical campaign ploy.

'It is easy to talk big in an election year,' said Assembly member Rudy Bermudez, a Democrat. 'I will refuse to stand by quietly as the governor uses Democratic issues to gain re-election and promote an out-of-the-mainstream conservative agenda for the next four years.'

But other critics found it hard to argue with the call for massive public works, which California clearly needs to retain its economic leadership in the United States and remain the epitome of the American dream. The state's population is projected to grow by more than 24 per cent over the next two decades, from 37 million to 46 million.

'Experts and even some Democrats agree it will be hard to criticize Schwarzenegger too much for proposing a bond programme that would create thousands of jobs and tries to address problems most Californians understand and experience daily,' the San Jose Mercury News noted.

The only problem is how to pay for the infrastructure upgrades.

A turnaround in the California economy will keep the money flowing in the short term, but if the state's business engine should hiccup, Schwarzenegger's plan could genuinely bankrupt the state, which has an economy larger than all but six countries in the world.

'All of this spending is contingent on the economic expansion continuing, and these things just don't go on forever,' Ted Gibson, a former chief economist for the state government, told the Los Angeles Times. 'These expansions are cyclical. And they never seem to last longer than an ice cube on a hot sidewalk.'

Schwarzenegger will have to persuade Democratic legislators to support his programme, and the early signs look good.

'There is will on the part of legislative leaders and the governor to deliver a comprehensive infrastructure bond to the voters of this state,' said Assembly Speaker Fabian Nunez, a Democrat from Los Angeles.

That could give Schwarzenegger a powerful sheen of newfound success heading into the November elections and let a man known as an outsized character - on the screen and in real life - stamp his imprint on California for generations to come.