The Arnold Show

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"It is very hard to see how it's possible to balance the budget fairly without asking the most fortunate of Californians to pay a little more," says the Democratic state treasurer, Phil Angelides, who says he plans to run for Governor in 2006. Angelides argues that Schwarzenegger has "a Bush-like approach to the budget, which is to say he borrows massively and the only sacrifice asked is by those who are less fortunate." Angelides points to four-figure increases in student tuition at state universities as well as hikes in premiums for many working families that insure their children through the state-managed Health Family program.

At the same time, Schwarzenegger is coming under attack by Republicans on his right who object to his progressive position on many social issues. Says state senator Tom McClintock, who ran against Schwarzenegger in the election that recalled Davis: "You cannot finance socially liberal programs with fiscally conservative policies. The math just doesn't work." Conservatives like McClintock think Schwarzenegger caved in too easily to Democratic opposition to a $1 billion cut in health and social services last year. They also disapproved of the Governor's support for a ballot initiative, passed handily in November, that provided $3 billion in state funds for stem-cell research over the next 10 years. Supporters argue that in the long term the state stands to gain from the potential discoveries, but meanwhile the measure adds to California's indebtedness.

Schwarzenegger's social liberalism tends to bolster his standing in a state known for its progressive politics. Besides endorsing stem-cell research, the Governor signed off on measures that would cut greenhouse gas emissions from cars 22% by 2012 (a move that nine automakers challenged in court last week) and allow hybrid vehicles to use carpool lanes on freeways. He created the 25 million-acre Sierra Nevada Conservancy, the biggest nature conservancy in the state. He signed a bill prohibiting sale of .50-cal. guns, and came out for a ban, to take effect in 2012, on force-feeding ducks, which is how foie gras is produced. "Arnold is the leading indicator of the revenge of the political moderates," says Paul Saffo, a director of the Institute for the Future, a Silicon Valley think tank. The Governor has deliberately created a distance between himself and the more conservative wing of the Republican Party. During the presidential campaigns, he appeared only once, in Ohio, for George W. Bush.

The Governor has brought a more fun-loving approach to Sacramento than his predecessor. The state capitol is now a tourist attraction.

Visitors, many from overseas, flow through the metal detectors at the building entrance and wander the corridors right up to the doors of his office, hoping for a glimpse of the Gubernator. "He is very mindful of that, so he walks about a lot," says Pat Clarey, his chief of staff. "It is kind of fun walking the hallways with him as the cameras go off." Schwarzenegger's mantra to the office staff is borrowed from the movies—"Action, action, action." Not surprisingly, a steady stream of celebrities drops by: Clint Eastwood, Tom Arnold, Danny DeVito, Anthony Hopkins, Jamie Lee Curtis. Clarey posts snapshots of the famous visitors on her office wall.

Looking down the line, Schwarzenegger is already collecting donations for his re-election campaign in 2006, although he has not yet announced that he will run. The fund has $1.1 million on deposit. His staff is "operating on the assumption of a re-elect unless he makes a decision otherwise," says spokesman Stutzman. And what about a constitutional amendment that would allow a foreign-born citizen to run for President? "He is in favor of amending the Constitution, but he thinks the amendment shouldn't be about just him," says Stutzman.

The talk of a presidential run "is one of these things that are always with us. Sometimes it can be fun and amusing, sometimes it's distracting." Whether or not Schwarzenegger attempts to follow in Ronald Reagan's footsteps from Sacramento to the White House, he has already created a stir in California politics. The question now is whether he can leave a permanent mark on the state by solving its ancient problems