IN THE AFTERMATH of Arnold Schwarzenegger's second State of the State Address, delivered early Wednesday evening in Sacramento, this much is apparent: Though nearly 14 months into the job, California's Governator is no longer a political novice, but he is still a political novelty and must-see TV. California affiliates carried the big speech live and uninterrupted; C-SPAN ran it nationally.

The second reality: if you have bad news to "dump," then Arnoldmania is the cover you want. Midway through the governor's address, the Associated Press reported that San Francisco Mayor Gavin Newsom and his wife, Kimberly, a Court TV commentator and now a fixture on the New York social circuit, are divorcing. What might have been the lead story on local news--the Bay Area's glamour couple bidding goodbye to their bicoastal marriage--instead was relegated to third place, behind the big doings in Sacramento and the San Francisco '49ers cleaning house.

As for the speech (here are links to the video and the text), it was vintage Schwarzenegger. At only 28 minutes in delivery, it was short on words as far as "visionary" orations go (not even one-half of a Clinton State of the Union). But what it lacked in length, it more than made up for with action. Schwarzenegger called for a special session, beginning Thursday, to tackle a quartet of government and political reforms. Though decidedly nonpartisan on such issues as transportation, energy, healthcare, housing, and prisons, Schwarzenegger also made it clear that he's no one's fool: if the Democratic-controlled legislature doesn't heed his reform agenda, he'll take the fight to the ballot in a special election later this year. And, as with last summer's smash hit at the Republican National Convention, there was a Reaganesque flavor: Schwarzenegger called the coming debate "a time for choosing"--the same phrase invoked by Reagan in his famous 1964 speech.

So what is there for California Democrats and Republicans to be fighting about? Plenty, if the special session follows the governor's outline. Schwarzenegger called for four areas of reform, none of which will please liberal Democrats. This includes:

* Spending. Eliminating many of the formulas that drive state spending, and cutting spending across the board when expenses grow above revenues (in the past year, the growth in state spending has exceeded new revenue by 2-1). Potentially, this would put the governor at odds with California's Proposition 98, which commits about 40 percent of state spending to public schools.

* Pensions. Schwarzenegger wants to take on pension obligations for retired public employees, which have skyrocketed from $200 million four years ago to $2.6 billion last year. At stake would be changing the benefit structure for future employees in favor of private sector-styled investment accounts, with taxpayers matching an employees' regular contributions up to a certain point.

* Education. Time and again, Schwarzenegger bemoaned the fact that California invests more than $50 billion annually in its public schools, with less-than-stellar results. His suggestion: merit pay and new performance standards for teachers, plus a great emphasis on charter schools and vocational training.

* Redistricting / Government Reform. California held 153 legislative and congressional contests last fall, and not a single seat changed party hands. Schwarzenegger wants to remove seating authority from the legislature and hand it over to a panel of supposedly impartial jurists--an idea that thrills neither parties' professionals. And he wants the legislature to act on his 2,500-page California Performance Review, which would revamp state government operations.

What characteristic do those four ideas share? Simple: each drives liberal special interests nuts. The state's public employees' union will fight pension reform; the California Teachers Association won't cooperate with education reform and tinkering with Prop. 98; California social-services lobbies will blanket the State Capitol with society's less fortunate to ward off spending cuts; Democrats won't go along with redistricting if it threatens their nearly two-thirds control of both legislative chambers--not unless they get a concession from the governor, such as easing term limits. Schwarzenegger knows this, and used it to his advantage in his speech, declaring: "Political courage is not political suicide. Ignore the lobbyists. Ignore the politics. Trust the people."

There are at least two good reasons why Schwarzenegger would employ such populist words. First, it's what got him the job. You'll recall that in recall, Schwarzenegger campaigned against special interests, swung a broom, promised a new era of accountability, and fancied himself "the people's governor."

The other benefit: Democrats have yet to figure a way to effectively combat Schwarzenegger when he goes into "people's governor" mode. Look no further than the Democratic response to the State of the State. Don Perata, the new state Senate president pro tem (and current subject of an FBI investigation), praised Schwarzenegger for calling the special session. But his best counter was to lamely blame the Bush administration and a lack of federal assistance for California's fiscal woes. Assembly speaker Fabian Nunez, on the other hand, awkwardly talked about job-outsourcing and raising the state's minimum wage. Neither Democratic leader is going to defeat Arnold in a telegenics pose down; neither has as compelling a reform agenda.

But, come next Monday, the Democrats do have an edge because it's Arnold's day to unveil his plan to balance a state budget that's currently $8 billion in the red. Unlike the State of the State, the governor will on the defensive as he justifies his spending cuts. Still, it won't change the fact that Arnold Schwarzenegger enjoys the occupies the high ground--moral, rhetorical and political--in California.

Which is why, for the foreseeable future, the Governator remains the king of the hill.

Bill Whalen is a research fellow at the Hoover Institution, where he follows California and national politics.

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