Arnold's Hollywood Problem

The governator spent his early years in California sounding like the Terminator and warning of financial Armageddon. Now, the state’s crisis is real—and nobody believes him.

05.20.09 5:46 AM ET

Arnold Schwarzenegger has built his career on what might be called the Armageddon Tease.

In the movies, he was perfectly cast as the foreigner from the future, sent from the future to warn us constantly of the apocalypse we hoped never to see. The tease was that the apocalypse was always just over the horizon. It wasn’t until the very end of third Terminator movie, 30 years after Schwarzenegger started making movies, that the audience finally got to see Armageddon, and it marked the end for more than just the world. A month after T3’s underwhelming opening, Schwarzenegger ended his film career and ran for governor of California.

Now Schwarzenegger has reached Armageddon again—a budget and political apocalypse—and another Arnold career may be over.

These days, the governor who cried Armageddon can’t convince anyone but newspaper editorial-page editors that he’s right.

There are any number of policy and political reasons for the defeat of five compromise ballot measures Schwarzenegger backed in Tuesday’s special election ballot. But chief among them was this: Californians grew tired of the Armageddon Tease.

When Schwarzenegger first took office at the end of 2003, Sacramento Arnold was a lot like Hollywood Arnold. Only the objective had changed: Schwarzenegger was trying to fix the state’s dysfunctional budget system instead of selling movie tickets. California’s constitution requires that voters make most of the big decisions, and so Schwarzenegger sold budget-balancing ballot measures just like films—outrageously and over-the top. Such a style seemed to fit the big state he governed. It even seemed refreshing—good-government types thought the entertaining governor might be able to engage California’s apathetic younger voters with their state’s politics.

In early 2004, when I was a reporter for the Los Angeles Times, I drove to Fresno to cover Schwarzenegger’s very first campaign event for his first package of budget ballot measures: Propositions 57 and 58. Schwarzenegger made movie jokes with the state controller before giving the TV cameras his best Terminator squint and warning there would be “Armageddon cuts” in the state budget if his measures didn’t pass.

I took the warning seriously, and the word “Armageddon” appeared in a huge headline over my story. A member of the governor’s political team called the next day to tell me Schwarzenegger was surprised by my story. He hadn’t meant “Armageddon” literally and didn’t want to frighten people. This was just the style Schwarzenegger used to sell things.

Whatever his intention, the over-the-top rhetoric produced a short-term political victory. Prop 57, a $15 billion bond measure to paper over the state deficit he inherited, won a victory, allowing Schwarzenegger to avoid the most severe budget cuts. Prop 58, passed easily, after Schwarzenegger—in another blast of over-the-top verbiage—declared it a “never again” spending limit that would prevent future budget crises.

Schwarzenegger won. But he lost credibility. These were extremely modest measures, compromises he reached with the legislature on the advice of advisers such as former Rep. Leon Panetta, who argued he needed to build public confidence that he could get things done. By the end of his first year, it was clear that the ballot measures wouldn’t fix the state’s budget persistent woes.

So he tried the Armageddon tease again. In 2005, his allies qualified a ballot initiative for a new, tougher spending limit. Schwarzenegger returned to the campaign trail warning again of apocalypse—big budget cuts, big tax increases—that would come if California didn’t adopt his solution and gets its budget deficits under control. In response, public-employee unions fought him by arguing that passage of the measure would create a different kind of Armageddon—a budget system that would give the governor dictator-style powers. The public bought labor’s Armageddon argument and rejected Schwarzenegger’s. His spending limit initiative lost.

At this point, Sacramento Arnold and Hollywood Arnold began to take different paths. Schwarzenegger was right that the state’s budget problems would persist. And as he grew more comfortable in the job, the governor began to argue for the politically difficult tax increases and spending cuts that he had sought to avoid early in his tenure. Sacramento Arnold emerged as a more mature political figure.

This February, with the state starting to run out of cash, he negotiated a politically difficult but necessary compromise with the legislature to prevent California from going entirely off the budget cliff. The deal included six provisions that altered the constitution or previous ballot initiatives. In California, such changes require a vote of the people. And so a special election was scheduled for May 19.

Back on the campaign trail, Schwarzenegger did his best to play Sacramento Arnold, mature and modest. But the soft sell was too hard for him, and at times, he reverted to Hollywood Arnold. In an interview with Los Angeles Times columnist George Skelton, he claimed the most significant measure, Prop 1A—the third spending-limit measure he’d put before voters—“will fix the broken budget system once and for all” and prevent any future cuts or tax increases. That wasn’t true—Prop 1A was, of course, a compromise designed to smooth out California’s sharp boom-and-bust revenue cycles. But Hollywood Arnold knew only the hard sell.

By last week, as the election neared, Schwarzenegger was at full Armageddon. He put forward two apocalyptic budget proposals (governors typically only put forward one) and warned of the release of 50,000 prisoners, the firing of thousands of teachers and other public workers, the forced sale of state landmarks such as San Quentin or the Los Angeles Memorial Coliseum.

But voters weren’t buying it. Schwarzenegger’s warnings of Armageddon were dismissed as mere scare tactics. Republicans didn’t believe the temporary tax increases that were part of the deal were really necessary to balance the budget. Democrats didn’t think the accompanying cuts were required.

The cruel irony was that this time, Schwarzenegger’s warnings were timely. Fiscal Armageddon really is nigh. The state’s dysfunction and the global recession have combined to make huge, historic budget cuts unavoidable. The state is literally running out of cash; California could be unable to pay all its bills by late July.

But the governor who cried Armageddon couldn’t convince anyone but newspaper editorial-page editors of this. Now, Schwarzenegger, his approval ratings in the 30s and dropping, is doomed to spend the rest of his term in the dreary work of managing this budgetary apocalypse. He’ll have only the cold comfort of the doomsday prophet who was, at last, terribly right.

Joe Mathews is a journalist, an Irvine senior fellow at the New America Foundation, and a contributing writer at the Los Angeles Times. He previously served as Justice Department reporter for the Wall Street Journal and as a city desk reporter at the Baltimore Sun. He is the author of The People’s Machine: Arnold Schwarzenegger and the Rise of Blockbuster Democracy.