Retirement Roulette

Don't Gamble With My Pension

DAN WALTERS: Schwarzenegger's recent vulnerability alarms GOP backers

(SH) - The juxtaposition of two events - Arnold Schwarzenegger's retreat on pension reform and his wife's televised declarations that his family wants him back home - have touched off a feeding frenzy of media speculation that he might be on his way down and out of politics.

Out-of-state journalists whose earlier obsession with Schwarzenegger had waned are rushing back to California to write stories about his declining popularity and his power struggle with Democrats and unions over "year of reform" ballot measures. Wife Maria Shriver's comments have contributed to the notion that she's preparing for him to exit politics rather than seek another term in 2006.

"Schwarzenegger loses aura of invincibility; Governor regroups as approval tumbles," reads the headline on an article in Sunday's Chicago Tribune. London's Financial Times told its readers last week that: "The former body-builder and action hero, whose pledges to shake up the political establishment helped carry him into power in 2003, suddenly appears surprisingly vulnerable." A Dutch journalist arrived in Sacramento, Calif., Monday to pursue the same angle, the same day that a Los Angeles Times columnist declared flatly that "we are witnessing the twilight of the Schwarzenegger administration."

Democrats, including those who want to succeed Schwarzenegger in the governor's suite, and labor union leaders are chortling about the turn of events and have lost interest - at least for moment - in compromising with Schwarzenegger on other issues.

There's no question that Schwarzenegger has entered the darkest period of his 1 1/2-year governorship, and that his popularity has declined. There's also no question that some of his problems are self-inflicted, because he and his advisers did not put together his reform package adroitly enough to forestall legal and political problems. And there's no question that Democrats and the unions quickly recognized the danger that his measures posed to their control of the Capitol and launched an effective campaign to attack Schwarzenegger's standing as a reformer - an assault that has gone largely unanswered.

It's uncertain, however, just how much damage Schwarzenegger has suffered among real voters, and whether it's temporary or the beginning of a fatal slide.

Schwarzenegger dismissed reporters' inquiries about his political status Monday as "great drama," likening it to Hollywood fiction. He ducked questions about Shriver's remarks and whether he intended to stay the course on his reform agenda, or bail out - which, of course, does nothing to dampen media speculation, Democratic hopes and Republican fears.

The latter, although private, are palpable, especially among the business executives that have been Schwarzenegger's allies and financiers in his war with Democrats and unions.

"I sincerely believe that the pullback on the pension reform initiative was the beginning of the end of the revolution Arnold had so bravely taken on," one prominent business leader said in a recent e-mail, in which he lamented that Schwarzenegger had not given his major backers advance warning on the pension retreat and worried that he will retreat on budget reform, too.

"Arnold will now appear like the school yard bully who can be beat . . . and every punk will now come looking for a piece of him," he said.

The budget reform measure was written by two prominent business leaders, William Hauck of the California Business Roundtable and Allan Zaremberg of the California Chamber of Commerce. It would impose a sliding limit on state spending and empower the governor to make unilateral spending cuts when revenues fall short. Critics are hammering on a provision that would weaken guarantees of state spending for schools.

To quell rising nervousness among those he's counting on to finance his ballot campaign, a business lobbyist said Schwarzenegger must declare, without equivocation, his intention to see the battle through and run for re-election next year. Without that, the lobbyist said, contributions will almost certainly wane as business executives decide that risking the enmity of Democrats in the Legislature is not worth it if Schwarzenegger is not planning to do what he said he was going to do - alter the culture of the Capitol.

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