Now He Must Prove He Has Ideas

By KAREN TUMULTY

Arnold Schwarzenegger's gubernatorial campaign opened with a blast worthy of Terminator 3, with the leading man muscling to the front of the pack even as he stayed largely out of sight in his first full week as a politician. He also added a supporting actor: Rob Lowe, of West Wing fame, who signed on to coordinate celebrity endorsements and other duties. But holding an audience for two months, as opposed to two hours, is a new challenge for the actor. That's why his team is working behind the scenes to build a brain trust and an agenda that will convince voters that Schwarzenegger's ideas are at least as well developed as his deltoids.

Their first big coup: bringing on board investment wizard Warren Buffett, whom Schwarzenegger described as "the greatest investor ever, my mentor and my hero." Having Buffett advise on economic development lends intellectual ballast to the campaign. But it did little to reassure conservative Republicans, whose votes could well be split by other candidates in the race. Buffett has donated primarily to Democrats--including Hillary Clinton--in the past and has criticized President Bush's tax cuts as a handout for the rich. In an interview with the Wall Street Journal last week, Buffett committed nothing short of heresy by suggesting that California's property taxes, rolled back under 1978's iconic Proposition 13, should be higher.

So Schwarzenegger is also reaching out to advisers with solid Republican credentials. Joining Buffett as head of the campaign's "economic recovery council" will be George Shultz, who was Ronald Reagan's Secretary of State. The campaign is sounding out right-leaning Republicans to fill its advisory groups on education and children's policies, government reform, the environment and--the thorniest issue--budget and fiscal policy.

So what, precisely, would Schwarzenomics look like? Those who have talked to the actor say he has assured them that he adamantly opposes tax hikes. Economist Art Laffer--famous for a cocktail-napkin scribbling that became the basis for supply-side economics--is one of those whose advice the actor has sought. Laffer says Schwarzenegger told him, "I am the tax terminator." Although Laffer, a flat-tax advocate, has not formally joined the team, he may be asked to develop ideas for long-term tax reform. Others being consulted include former presidential candidate Steve Forbes and Michael Boskin, the Stanford University economist who chaired the Council of Economic Advisers under the first President Bush.

Schwarzenegger expects to campaign against the state's high workers' compensation premiums, which he blames for driving businesses away. He is also considering proposals for rolling back the unpopular vehicle-license fee, which the legislature and Democratic Governor Gray Davis recently tripled to help close a giant budget gap. A spending freeze is likely to be part of Schwarzenegger's economic program.

Can Schwarzenegger make it all add up to a balanced budget? The lights are down, the film is rolling, but the script is still being written.

--By Karen Tumulty. With reporting by Terry McCarthy and Jeffrey Ressner/Los Angeles

With reporting by Terry McCarthy and Jeffrey Ressner/Los Angeles