TOUGH CHOICES ON D.C. JUNKET

Schwarzenegger Must Decide Whose Side He's On

Washington -- Gov.-elect Arnold Schwarzenegger will storm the nation's
capital this week, and much like his grand entrance in Sacramento this past
week, the visit is expected to be longer on symbolism than substance.

But beyond the flashbulbs and crush of political paparazzi, Schwarzenegger
will face tough choices on a long list of federal issues that will help
determine his success as California's 38th governor.

Will he side with California voters or the Bush administration on the
distribution of medicinal marijuana? Will he try to stave off congressional
efforts to weaken California's financial privacy law? Will he side with
environmentalists or Republicans when it comes to protecting California's
forests? Does he support automobile emissions standards favored by the
Legislature or the auto industry?

On policy after policy, the self-styled centrist will have to choose either
the more conservative position held by the White House and the Republican
Congress, or the more liberal position taken by California voters or the
state's Democratic lawmakers. It is an awkward position for a new political
leader, who will not be able to use Washington as a scapegoat as easily as
his predecessors did.

Schwarzenegger is the first California governor in nearly a quarter century
to belong to the party that controls Congress and the White House. He must
find ways to leverage more money for his state than Washington has been
willing to spend and balance the competing desires of his state's
Democratic leaning policy-makers and his Republican allies who hold the
strings to power.

"He's betwixt and between. He's viewed as a spokesman for Republicans in
California. At the same time, there is constant conflict between Washington
and California on a number of issues," said Leon Panetta, who represented
California in Congress for 16 years before serving as former President
Clinton's chief of staff.

"He's going to have to decide very early on whether he can persuade
Washington to be more receptive to California's problems, or whether he is
going to have to take on members of his own party," said Panetta, a
Democrat. "He's going to find out very fast that he has got to be in the
position of defending California first."

Schwarzenegger plans to meet with all 53 members of the state's House
delegation, both senators, and several members of President Bush's cabinet
during his 48-hour stay beginning Tuesday. There are no plans to meet with
Bush, who flies to Texas on Wednesday.

"The governor-elect is looking forward to his meetings as an opportunity to
lay the foundation for a solid, positive working relationship with members
of the delegation and members of the Bush administration," said
Schwarzenegger spokesman H.D. Palmer.

Yet many lawmakers and policy advocates in Washington won't wait long to
demand that Schwarzenegger use his star power on a range of issues, from
pressuring the administration to buy off-shore oil and gas leases to
prevent drilling off the California coast, to demanding refunds from energy
companies that gouged the state during the electricity crisis.

"We are hurting. We are short billions of dollars," California Democratic
Sen. Barbara Boxer said. "If he really wants to help the state, the easiest
way to do it without increasing the deficit is you order refunds from those
companies and you order renegotiations of long-term contracts. That would
be $10 billion to the state -- and justly so."

Two top House Democrats -- Rep. Zoe Lofgren of San Jose and Rep. George
Miller of Martinez -- sent Schwarzenegger a letter last week detailing 22
separate policy decisions and appropriations requests he could make, which
they estimated would provide $30 billion in budget relief for the state.

"He said he would get money for the state ... and the voters believed him,
" said Lofgren, who leads the California Democratic delegation. "Let's see
if he can produce what he said he'd do."

During the campaign, Schwarzenegger pledged to be the "Collectinator" who
would demand a bigger share of federal dollars for everything from highway
building to incarcerating illegal immigrants. After his election, he vowed
he would ask "a lot of favors" of President Bush.

But the White House and Republican congressional leaders have quietly urged
Schwarzenegger to tone it down, saying the deficit-strapped federal
government is in no position to deliver a windfall to California.

"If he's looking for the federal government to bail out California to the
tune of $8 billion, that's just not going to happen," said Rep. George
Radanovich, R-Mariposa.

Many of California's differences with Washington have nothing to do with
money. Congress is poised, as early as this week, to adopt a bill that
would significantly weaken new protections just adopted by the California
Legislature to prevent banks from distributing their customers' personal
information. Consumer advocates have already tried to enlist
Schwarzenegger's help to insert California's protections into the federal
law, a move opposed by bankers and many members of Congress.

Pressure From Both Sides

Schwarzenegger will have to decide how much muscle he puts behind issues
where he and his more conservative allies disagree.

For example, Schwarzenegger said he supports the Sierra Nevada Framework, a
Clinton-era blueprint for protecting old growth and wildlife on 11.5
million acres of California's national forests. But the Bush administration
is rewriting the plan, which is opposed by timber companies, many rural
counties and ranchers with grazing permits on forest land.

Environmentalists will demand that Schwarzenegger raise the issue with
Forest Service officials, while Republicans say they will lean on the
governor-elect to change his mind.

"We would like Arnold to be in sync with what the Bush administration is
doing regarding the management of the Sierra Nevada forests," said
Radanovich, who spoke with Schwarzenegger recently about his concerns. "He
said he wanted to devote the time to find out more about the issue."

Schwarzenegger has also pledged to defend California's landmark law to
limit vehicle emissions of greenhouse gases. The auto industry is hoping
that the courts will throw out the law, and the Bush administration sided
with automakers in August by opposing efforts to limit vehicle emissions
that contribute to global warming.

The governor-elect will be asked during the visit to join the state's
bipartisan effort to eliminate a requirement in the proposed energy bill to
double the amount of the corn-based fuel-additive, ethanol, in gasoline by
2012. The mandate is backed by Bush and Midwest lawmakers, but California
officials claim it would increase the prices California drivers pay at the
pump without reducing smog.

The incoming governor also said he supported California laws that legalize
marijuana use for medicinal purposes, which is opposed by the Bush Justice
Department. Federal authorities have cracked down on California pot clubs,
and are appealing the one-day sentence of pot grower Ed Rosenthal, who
defied federal law in order to grow medicinal pot.

"Obviously as governor of California he can't change federal law, but he
can deliver a message that what they are doing is destructive," said Bruce
Mirken, a spokesman for the Marijuana Policy Project. "If anyone is going
to be able to persuade the administration to back off, a popular, newly
elected Republican is the person to do it."

Schwarzenegger's visit also will highlight the pitfalls and the potential
payoff facing the president.

"It'll be a test not only for Schwarzenegger, but it'll be a test in many
ways for George Bush as to whether he cares about what happens in
California, " Panetta said.

THE CALIFORNIA AGENDA

As Gov.-elect Arnold Schwarzenegger visits Washington this week for the
first time since his election, these are among the difficult decisions he
faces on federal issues:

Energy: Federal energy regulators have spurned California's request for $9
billion in refunds (offering $3.3 billion instead) and refused to force
energy firms to renegotiate contracts signed during the energy crisis.
Schwarzenegger must decide whether to go to court to challenge the
decisions, which would put him at odds with the Bush administration.

Immigration: California spends more than $1 billion a year to incarcerate
undocumented immigrants who commit crimes in California. The federal
government, which is responsible for immigration issues, reimburses the
state just $125 million. Schwarzenegger pledged to lead a coalition of
states demanding more help, setting up a potential showdown with the White
House which has tried to cut spending for the program.

Guns: The federal ban on assault weapons championed by California
Democratic Sen. Dianne Feinstein is up for renewal next year.
Schwarzenegger, who has drawn fire from the National Rifle Association for
backing gun control measures, has said he supports the current ban, but has
not addressed an extension, which will face tough opposition from Republicans.

Air pollution: California passed the nation's first law to limit tailpipe
emissions of greenhouse gases and the governor-elect has pledged to defend
it in court against the Bush administration and the auto industry.
Schwarzenegger also vowed to scrutinize Bush's "new source review" rules,
which exempt power plants from installing new pollution controls when they
expand, and could seek tougher California rules to protect air quality.

Forests: The Bush administration is seeking to rewrite the Sierra Nevada
Framework, a Clinton-era management plan that stresses protection of
old-growth trees and wildlife in the 11 national forests of California's
signature mountain range. Schwarzenegger opposes changes to the plan, which
could double the amount of logging, and must decide whether to take on the
administration.

Medical marijuana: Californians voted in 1996 to legalize marijuana for
medicinal purposes, a stance which has been challenged repeatedly by
federal prosecutors under the direction of the Bush administration.
Schwarzenegger supports the California law and could use his clout to get
federal authorities to yield to the state.

Consumer privacy: Congress is poised to undo California's landmark law
banning financial institutions from sharing customers' financial data and
spending habits with affiliated companies. Consumer groups are urging
Schwarzenegger to defend the popular law, which would put him at odds with
the banking industry that donated heavily to his campaign.