11/25/2013 08:35 pm ET Updated Jan 25, 2014

On the 10th Anniversary of Arnold Schwarzenegger Settling In as Governor

It's been just over ten years since Arnold Schwarzenegger's surprise governorship of California began. Winner by a landslide in the dramatic 2003 California recall election, Schwarzenegger
was inaugurated on November 17, 2003 after a less than six-week transition period.

The inaugural festivities, covered around the world in real and near real time, were spectacular in scope. And Schwarzenegger laid out an agenda of post-partisan, frequently visionary elements which he did much in office to achieve. But not before sowing some disastrous seeds not long after his inauguration, even as he achieved near record levels of popular approval during his first year in office.

By the end of his first week in office, or, put another way, just about 10 years ago now, three things that turned out to be important in retrospect had come into clear focus.

* First, the big car tax cut, which amounted to $4 to $6 billion a year over the years. It was Schwarzenegger's first official act as governor, one that was extremely popular. So important was it to him that he rushed to sign his executive order rollback even before he joined friends, family, and top pols at snazzy private inaugural luncheons. Since California's chronic structural deficit -- since eliminated by Governor Jerry Brown's combination of big budget cuts and tax increases -- turned out to be around that number, Schwarzenegger would be blamed for doing it. The thing is, had he not done it, the car tax may very well have been cut by popular initiative.

Governor Pete Wilson cut the car tax in the first place, making amends to the Republican right for raising other taxes early in his '90s tenure. Governor Gray Davis raised it back up only when he felt he had no other choice. He had no illusions about how unpopular his move was.

It was what Schwarzenegger did next with regard to the budget hole caused by the car tax cut that proved to most important. He relied on economic growth, and to a lesser extent,
proposed political formulas, to make up the difference rather than cuts, revenues, or cuts and revenues. In 2009, Schwarzenegger did go for a mixture of cuts and temporary tax hikes. But by then the great global recession had wreaked its havoc in California.

Saying the people are doing their job but the politicians are not, in this 2003 commercial, novice gubernatorial candidate Arnold Schwarzenegger laid out basic themes.

* As Schwarzenegger has noted recently, his governing team out of the box proved to be almost all Republican, and heavily dominated by veterans of Governor Pete Wilson's administration. Had he had more time he could have put together a proper collection of people in tune with his rather iconoclastic views. So sudden was his entry into the fast-developing recall campaign, coming on the heels of the release of Terminator 3, which was supposed to have been his big project for the year, meant that he hadn't yet put together his own blend of folks. That meant that his rhetoric ran bipartisan and iconoclastic, but the day to day reality was more doctrinaire Republican, including old agendas from the Wilson years which would get him in very big trouble in his 2005 special election "Year of Reform" initiatives.

Much of his Arnold 1.0 gubernatorial staff would ignore his initiatives in areas they were not attuned to, such as renewable energy, climate change, and new vehicles and transit, causing them to languish early on and making it easier for opponents to focus on the conventional Republican agenda most staffers and consultants were interested in promoting to make the non-conservative Arnold out to be a conservative after all.

Worse still, despite being paid massive amounts of money as consultants and handsome salaries as gubernatorial staffers, they failed to properly develop the initiatives they were to push in 2005, causing some major public embarrassments, contributing mightily to the defeat of all four of his 2005 special election initiatives.

The reality is that Schwarzenegger could have been much better counseled, his efforts more adroitly coordinated, for a small fraction of the millions spent on and by "Arnold Inc.," whose members usually also set themselves up as lucrative influencers for hire, cashing in on their access to Schwarzenegger.

* Ten years ago, Schwarzenegger had rented the penthouse suite of the Hyatt Regency at Capitol Park as his temporary state capital residence and was getting used to the place. But the idea was for him and new First Lady Maria Shriver to find a house in Sacramento for the family to live at least part time while Schwarzenegger settled into the complex mechanics of governing the nation's largest state.

But even though some house hunting activities would continue, it seemed obvious to me a week after the inaugural that there really wouldn't be a move, and that Schwarzenegger's hotel suite would be the home away from home. Schwarzenegger loves hotels. Shriver does not. Though her broadcasting career had hit its peak some years earlier, she intended to stay active in the field, though this proved to be essentially impossible over time. But between that and the kids and their schools, there was ample reason to avoid the move.

It was clear to me that Schwarzenegger was not going to spend most all of his time away from his wife and his family. That would have been tantamount to the world's longest movie location shoot. In the end, Schwarzenegger ended up flying up and down the state all the time, via Gulfstream private jet, the world's most expensive commuter. While Sacramento is over-rated in its importance, a governor does need to be around, an available presence. The opportunity for creative casual interaction in politics can't be overestimated.

Ironically, Shriver ended up spending a huge amount of time on what became very expanded first lady tasks, including helping recruit members of his campaign and government teams, mounting massive and massively impressive women's conferences, redeveloping California Museum, and overseeing a new state hall of fame. All of which could have been done with a second home base in Sacramento, where she turned out to have a significant staff as it was.

But before all that emerged, the inaugural itself was simply spectacular, a once in a lifetime experience in state politics.

The 38th governorship of California launched like a movie premiere, with Schwarzenegger in between movie star and politician mode, projecting his image to teeming masses and swiftly greeting elites in classy, closed-door parties. As I noted at the time in one of my reports as the LA Weekly's chief political writer, "it may mark the start of an era of political renewal in the tarnished Golden State, or it may mark a wild new phase in California's ongoing political devolution."

First Lady Maria Shriver checked out the impressive outdoor stage setup the Sunday afternoon before with the couple's four children, who practiced their part in the Pledge of Allegiance. She directed much of the day's planning, and did finishing work with Schwarzenegger on his 12-minute address. The speech was a collaboration between Reagan speechwriter extraordinaire Landon Parvin and Kennedy speechwriting ace Bob Shrum. On inaugural day, fate intervened for Schwarzenegger, described as "the luckiest man in the world" by one associate, as the sun broke through as he spoke on a Sacramento day that usually would have been enshrouded in fog.

Tens of thousands of people were on hand for the festivities, along with an army of media folk from around the world. I was able to thrill my friend Viktoria and her parents back in Moscow by arranging for her to do a live interview on Russian television, a connection I'd made during Schwarzenegger's concluding campaign bus tour of the state. While the candidate and his staffers rolled around the state in buses dubbed The Running Man and Total Recall, they were trailed in the motorcade by four buses filled with media, wittily designated Predator 1 through 4.

Governor Arnold Schwarzenegger signed California's landmark climate change program into law in this September 2006 ceremony on San Francisco Bay's Treasure Island.

After praising Gray Davis for his grace during the transition, noting that the recall was not merely about him, the action movie superstar's speech played as heartfelt and well-conceived, the statement of a 21st century Hiram Johnson. Its new wave Progressive message emphasized the point that the recall election which gave rise to the once seemingly fanciful new governorship of the former Mr. Universe was really "about changing the entire political climate of our state."

Likening the entrenched partisan divisions of Sacramento to the crisis of 1787 which led to the U.S. Constitution, Governor Arnold laid out his thematic template for what he hoped would be a fusion administration to revive California as "the golden dream by the sea."

After the politicians luncheon in the Capitol Rotunda, Jerry Brown joined the family and friends luncheon at the venerable Sutter Club, named for the man who started the California Gold Rush. Then the second term mayor of Oakland, Brown was flying solo on this day with future wife and First Lady Anne Gust Brown over in the Bay Area. In non-ascetic mode for once, he was curious where we were finding certain delicacies. Asked how it felt to be in "the lions' den" with all those Republicans and his two Republican successors, George Deukmejian and Pete Wilson, Brown quipped, "Nah, they're pussycats."

Brown had repeatedly praised Schwarzenegger and seemed enthused about the new political era. "It's a time again for reinvention in California," declared the two-time Democratic presidential runner-up. "He has a real opportunity here."

Former Governor Deukmejian told me that Schwarzenegger is "more liberal than me" but probably needs to be. "It's a changed state," he said, "very different" from what it was in his 1980s tenure.

Former Governor Wilson, acknowledged that Schwarzenegger must draw "from an eclectic group." Easy for him to say, since his former staffers and appointees had by far the most visible pedigrees in the nascent administration.

For all the bipartisan talk of the Schwarzenegger transition team, the top appointments to the administration were nearly all Republicans. In the top echelons of the governor's office itself, there was only Bonnie Reiss, a Hollywood Democrat and environmentalist and friend of Arnold's for more than 20 years who ran his after-school program and is now director of the nascent USC Schwarzenegger Institute on State and Global Policy.

It might have looked very different. A very prominent Democrat, former Assembly Speaker Bob Hertzberg of L.A., was strongly considered for the post of chief of staff to the new governor.

Also considered was a tandem arrangement in which the moderate liberal Hertzberg would work with Republican Patricia Clarey, a corporate conservative. In the end, though, the choice was Clarey, an HMO executive and then protégé of former Pete Wilson chief of staff Bob White, who oversaw Schwarzenegger's far-flung campaign operation.

But environmentalist Terry Tamminen, then head of the Santa Monica-based Environment Now, was picked as the secretary for environmental protection. As such, he headed an agency that some mistakenly reported during the campaign that Schwarzenegger wanted to abolish. Some within the transition team opposed Tamminen, a friend of environmental lawyer Robert F. Kennedy, Jr., Maria Shriver's cousin.

In the end, Schwarzenegger, who told me back in 2001 and 2002, well before he ever ran, that he has an "expansive vision" on the environment and renewable energy and fully intended to go beyond California's already nation-leading requirements under Davis on renewable energy and energy efficiency, not to mention the state's early efforts to rein in greenhouse gases by limiting tailpipe emissions, went with Tamminen, the architect of the new governor's advance policy paper that prompted The New York Times to dub Schwarzenegger "Conan the Green." In fact, Tamminen works with Schwarzenegger today on their UN-affiliated R20 organization based in Geneva and Santa Monica, which grew out of Schwarzenegger's three Governors Global Climate Summits.

Schwarzenegger had big plans for renewable energy and new vehicles, climate change and other environmental matters, infrastructure projects, technological innovation and more. But those weren't getting much service from his staff in the first year and most of the first term governor's office.

Schwarzenegger succeeded in his first year in office in gaining major changes from the Democratic legislature to the state's workers compensation system, a major boost for strapped businesses at the time. And in a spring 2004 special election, he gained popular passage of already authorized "deficit bonds," thus making them constitutional, as well as passage of an initiative introducing a new formula control spending, in order to stabilize the state's careening finances.

But the initiative didn't work.

Schwarzenegger delivered his November 2006 victory speech at the Beverly Hilton.

The budget crisis, which became chronic after the end of the dot-com boom, a $26 billion problem when Jerry Brown took over in January 2011, existed because the dysfunctional culture of Sacramento was dominated by ultra-government and anti-government lobbies which pushed for unsustainable program spending and tax cuts, all of it in a political environment in which voters were largely ignorant of the facts, within a system in which, alone among major states, it took a two-thirds vote to raise taxes but only a majority vote to create a tax loophole. Voters generally say they want cuts, but not in the areas in which the money is really spent.

The unraveling began when then Governor Pete Wilson cut the car tax during the dot-com boom. It continued with program expansions and some further tax cuts under Davis.

After his 2002 re-election, Davis, through ministerial action of the state Department of Finance as provided by the tax cut law, raised the car tax back to its earlier, pre-Pete Wilson level. But he was trepidatious about it from the beginning when I talked with him about it in January 2003, knowing how unpopular a move it would be when he finally did it some months later. Voters really don't like having tax cuts reversed. Schwarzenegger campaigned on cutting the car tax again -- I was about 20 feet away when he theatrically pushed a button to smash a car at an Orange County fairground -- and did so in his first act as governor. That cost the state $6 billion a year that it badly needed. It also headed off a likely popular initiative to cut the car tax.

Fatefully, Schwarzenegger chose not to get revenue elsewhere in 2004, or to institute major budget cuts. Instead, he bet primarily on the rising tide of the economy. The state managed to muddle through for the next few years as he tried unsuccessfully to enact state spending limits until the bottom dropped out of California's revenues with the great global recession.

By the middle of his first year in office, frustrated by opposition, Schwarzenegger tried to replace Democrats in the state Assembly in a dozen or so districts he'd carried in his 2003 campaign.

He definitely seemed to me to be intrigued by the idea of endorsing a few Democrats, including one or two who'd been actual supporters of his agenda, but his big money Republican consultants mostly opposed it and he did not.

In the event, none of the candidates he campaigned for won, which led him into the redistricting reform fight. That ended badly in 2005, as this was yet another of his favored initiatives which his own heavily compensated team didn't prepare itself.

His "Year of Reform" in 2005, focused on a special election effort to pass four initiatives on redistricting reform, teacher tenure, hamstringing public employee union campaign spending, and controlling state government spending, ended in disaster. All four initiatives went down to defeat and Schwarzenegger's once lofty popularity was a thing of the past after relentless waves of attack ads against him.

Yet he went on to win a landslide re-election victory over then state Treasurer Phil Angelides, one of his harshest critics. He did it by emphasizing his renewable energy and environmental themes that had been blocked by elements of his 1.0 crew and a huge infrastructure bonds package, his Strategic Growth Plan, which also won big at the polls. And he did it with a new crew, including a Democratic chief of staff, Susan Kennedy, and more moderate Republican operatives linked not to Wilson but the White House, such as Steve Schmidt, Adam Mendelsohn, and Matt David.

It was all good. Then Schwarzenegger spent most of 2007 using the capital of his landslide re-election victory trying to pass a bipartisan comprehensive health care program. It was a bridge too far.

After that, with the California Republican Party presaging national trends by going far right -- ignoring his entreaties in a telling fall 2007 state party address in which he urged greater centrism -- Schwarzenegger had a variety of ups and downs, mostly the former, before hitting the undertow of the great global recession.

At the very end of his administration, I functioned as a special consultant and coordinator of information for Schwarzenegger as he transitioned from governorship to post-governorship, as I mentioned here at the time. It was an interesting project for which I received a measure of cooperation from Schwarzenegger's staff and consultants.

As Schwarzenegger's themes and issues, which at times seemed kaleidoscopic, came into sharper focus as his time in office wound down -- and while he, ironically, wound up -- his job approval rating improved. (His friendly neutrality in the governor's race -- friendly to eventual landslide winner Jerry Brown, that is -- didn't hurt.) As he left office, Schwarzenegger seemed set for a renewed era of good feeling about him. His friendly neutrality in the governor's race continued general good feelings between him and Jerry Brown, who won the election in a landslide over billionaire Republican Meg Whitman and her biggest spending non-presidential campaign in American history.

Mired at 22% in the summer, Schwarzenegger's job approval rating rose to 32% in the final poll of his governorship, the Public Policy Institute of California poll released in December 2010. That near 50% improvement over a half-year's time presaged good things for Schwarzenegger's post-governorship. But sharp and sudden controversy, public and private, cut short what could have been an era of good feelings for Schwarzenegger as he moved into a very public sort of private life.

Arnold Schwarzenegger makes his last exit as governor of California from the Governor's Office.

First, he commuted the sentence of a friend's son who participated in a fight in San Diego that ended in a young man's death. The friend was former Assembly Speaker Fabian Nunez, a Democrat who began as Schwarzenegger's enemy and became a great ally. (I remember being in Nunez's office discussing Schwarzenegger with him, once with a very notable Hollywood figure on speaker phone, as Nunez worked to see if there was a way to turn enmity in something more productive.) His son, Esteban, whom Schwarzenegger had come to know, did not strike the killing blow but was in the idiotic melee nonetheless. And commutation doesn't mean pardon, it means a cut in the sentence. The young man is still in prison and will be there for awhile, with ample time to contemplate his reckless behavior and perhaps ample time to salvage his life, which Schwarzenegger did not want to see thrown away, further compounding the tragedy.

I learned about this the day before Brown's inaugural, when I opened my e-mail in a very chipper mood to find a press release. Very few had known Schwarzenegger had this act in mind, and no serious thought had been given about how to present it, as the mood-changing press release made clear.

A few months later, of course, about a week after Schwarzenegger and Shriver announced their sudden separation, someone leaked the story to the Los Angeles Times, Schwarzenegger's bete noire when he first won election as governor, that Schwarzenegger had verified to Maria Shriver that he had in fact fathered the child of a longtime household staffer. He immediately issued an abject public apology.

Now Schwarzenegger is reviving his movie career and expanding his ventures as a sportsman, including his emerging role as the world's leading private impresario of multi-sport events. His USC institute, launched over a year ago, is developing and just held a large event with author and MSNBC host Chris Matthews; his renewable energy and climate efforts, already well underway around the R20 organization, are ongoing.

In all these ventures, he will need to take care to blend the old tried and true rhetoric and themes with the risk of the new. After all, it was largely as an avatar of the future that the Schwarzegger persona came to the fore on the global stage in its various guises.

Schwarzenegger didn't have a big celebration of his 10th anniversary as California's governor, which he says both publicly and privately is, for all its sturm und drang, his favorite job ever. But his event with Matthews, a discussion before a large crowd at USC about Matthews' new book -- Tip and the Gipper: When Politics Worked -- on how Republican President Ronald Reagan and Democratic House Speaker Tip O'Neill found ways to work together, came just a few days before.

Both decried the corrosive and crippling hyper-partisanship that marks today's American politics, especially in Washington, "where the city is frozen," Schwarzenegger noted, "and nothing gets done." Matthews in particular praised Schwarzenegger for his bipartisan, or as the former governor prefers, post-partisan efforts, especially in political reform.

For Schwarzenegger finally did get a redistricting reform initiative passed, along with an open primary initiative, during his second term as governor. Both these measures force politicians to be at least somewhat more responsive to a broader range of people and perspectives than those in their party's respective hyper-partisan cores.

Schwarzenegger did not revive California as "the golden dream by the sea," as he would have had it in his inaugural address 10 years ago. Which in any event may have been a goal achievable only for those in the Tony Stark household. But some very good things did happen. And the things that didn't work carry important lessons moving forward, some of them not at all obvious.

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