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'Club for Growth' revealed as GOP Puppetmasters

Stephen Moore, president of the Club for Growth, said of Schwarzenegger's budget compromise with CA Democrats; "Uh oh! This is extremely depressing. Sounds suspiciously like papa Bush to me. I may need to do some reprogramming!"
Schwarzenegger takes heat from GOP lawmakers
Los Angeles Times

SACRAMENTO -- The Legislature's approval of Gov. Arnold Schwarzenegger's budget recovery plan has provided California with the first clear demonstration of how the new governor will operate in office -- and the lesson has left many Republican legislators feeling bruised.

The conservatives who dominate the Republican caucus in the Legislature were caught off-guard as a governor they had considered an ally bypassed them to broker a deal with Democrats.

Thursday, as that deal was solidified, several Republican legislators had urged Schwarzenegger to back away. They were too late. That night, after appeals from the governor and his aides, nearly all Republicans in the Assembly voted yes, feeling they had no choice.

Many quickly had second thoughts, which worsened on Friday as the Senate gave the plan its assent and Schwarzenegger signed the bill that will put it on the March ballot.

"It's going to be hard to explain to the public as to why our position has changed," Assemblyman Bill Maze, a Republican from Visalia, said just after the Assembly vote. Maze, one of those who had urged Schwarzenegger to turn the deal down, noted that the plan did not contain provisions that Republicans had said were essential.

"This is not even a spending limit," said Assemblyman John Campbell, who had advised Schwarzenegger on the issue.

"We might have done better toward controlling spending if we had left it where it was" a week ago, when the negotiations collapsed and Schwarzenegger's aides talked of gathering signatures to place a much tougher spending cap on the ballot in November, Campbell said.

Schwarzenegger's approach limited the role of the Democratic legislative leaders as well as Republicans. Much of the action during the week involved negotiations between the governor's aides and a bipartisan group of centrists in the Legislature who until recently had been marginalized when they tried to find common ground.

But in the end, it was Assembly Speaker Herb Wesson, a Los Angeles area Democrat, who negotiated the final details with the governor Wednesday night, and most Republicans were not filled in on the deal's terms until late Thursday, long after Democrats had been briefed by their leaders.

And the terms of the deal -- asking voters to approve borrowing $15 billion to keep this year's budget in balance and adding a new balanced-budget amendment to the state constitution -- included provisions sought by Democrats but left out the firm limit on state spending that Republicans had said was key.

The bill "has no meaningful reform," GOP Sen. Sam Aanestad said during debate in the Senate Friday.

To conservatives, the state's fiscal crisis and Schwarzenegger's election had created a rare opportunity to permanently shrink the size of the state's government. The spending cap they wanted would have exerted downward pressure on government programs for years to come.

As it turned out, the governor had other priorities. For Schwarzenegger, obtaining the $15 billion bond was more important than securing a hard spending cap.

Without the money from the sale of bonds, the state could run out of cash in June, forcing government services to shut down. Consultants to the governor warned him that such a scenario would erode his support among the public considerably and thus limit his ability to push through other reforms by ballot initiative.

In the end, he agreed to a plan that limits state spending somewhat and will make it easier to cut spending in bad times, but still allow the budget to grow in good economic times. The plan is one that some partisans on both sides find distasteful, but is attractive to those in the political center.

Schwarzenegger's aides insist that was the point all along.

"The governor is very gratified that politics as usual has taken a back seat," said Schwarzenegger spokesman Rob Stutzman. "I think the governor was able to lead (lawmakers) to a place where they were able to do something they have never done before."

Clint Reilly, a Democratic political consultant, said a governor negotiating a deal without legislative leaders from his own party in the room is "kind of a new phenomenon" in Sacramento. "He is confident enough of his right flank that he's able to force compromises not just on the Democrats, but on Republicans as well," Reilly said. "Most of the time, the leadership has wanted to avoid confrontation, avoid controversy. It's very unique for a Republican governor to be sitting down, negotiating in hand-to-hand combat, with no Republicans in the room."

Schwarzenegger, himself, rejected the idea that "no Republicans" were involved in the budget talks, according to a story Senate President John Burton, a Democrat from San Francisco, shared with reporters on Friday:

"I was told that Assembly Republicans complained that there was no Republican in on the negotiations, and the governor immediately corrected them and said 'yes there was,' " Burton said. The governor, of course, was talking about himself.

That, however, may only heighten the anxiety of some Republican leaders, who worried during the recall campaign that Schwarzenegger might try to make the California Republican party less conservative. Already, some national conservative leaders are talking of the need to pull Schwarzenegger back into the fold -- especially as the governor and lawmakers begin the work of balancing the budget next month.

Stephen Moore, president of the Club for Growth, a think tank in Washington that argues for lower taxes, and a member of the team overseeing the governor's audit of state finances, began warning last week that the governor might be be veering too far left.

"If Arnold is going to be successful over the next three years, he is going to have to be a serious tough guy and recognize that these legislators are his adversaries, not his allies," he wrote last week in a newsletter published by the research firm Laffer Associates. Moore expressed concern that that Schwarzenegger had shown some inclination to raise taxes if the public agreed.

"Uh oh! This is extremely depressing," he wrote. "Sounds suspiciously like papa Bush to me. I may need to do some reprogramming!"

Friday, Jon Coupal, the president of the Howard Jarvis Taxpayers Association who backed Schwarzenegger during the election, warned that his group may not campaign for the governor's ballot measure.

"It would be hard to advise voters to vote for $15 billion in borrowing without something that actually restrains the growth of government," he said.

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