FTN - 8/10/03

SCOTT PELLEY, CBS News Correspondent: Today on Face The Nation: , the California recall race. At least 150 people have now filed to run in the California recall race to replace the current governor, Gray Davis.

The front-runner, according to polls, is actor Arnold Schwarzenegger. How would he handle California's fiscal problems? How can the Democrats keep Governor Davis in office? Do they have an alternative? We'll get both sides from Republican former Governor Pete Wilson and Mayor Willie Brown of San Francisco, who's a Democrat.

Then we'll talk about the rest of the week's political news with Dan Balz of The Washington Post and Jill Lawrence of USA Today.

But, first, the California recall race on Face The Nation.

ANNOUNCER: Face The Nation with CBS News Chief Washington Correspondent Bob Schieffer. And now from Washington, substituting for Bob Schieffer, CBS News Correspondent Scott Pelley.

PELLEY: Good morning and welcome to the broadcast.

Overnight there was a gold rush in California. When the dust settled this morning, no fewer than 155 candidates had filed to run for governor in the special recall election -- 155.

At the moment Arnold Schwarzenegger leads this stampede. A Time-CNN poll just out says that if the election were held today, Californians would vote to recall Democrat Governor Gray Davis and replace him with the action movie star, whose thoughts on politics are almost completely unknown.

Joining this morning are two men who know more about California politics than just about anyone: the Democratic mayor of San Francisco, Willie Brown, also former speaker of the California Assembly; and Gray Davis' predecessor in Sacramento, Pete Wilson two-term Republican governor and former two-term US senator from California.

Gentlemen, people in 49 states are shaking their heads in disbelief this morning. Mayor Brown, is Gray Davis through?

MAYOR WILLIE BROWN, D-San Francisco: No, I don't think he is. I think the vote has yet to be counted. I believe Gray Davis has consistently statewide been able to meet any challenge that he has faced, except on two occasions. In 1974 he lost to then-legendary figure Jesse Onro, and, of course, he lost also to the man who -- to the woman who ran for U.S. Senate in 1992.

PELLEY: Pete Wilson, what are the chances Governor Davis stays in office?

FORMER GOVERNOR PETE WILSON, R-California: I think they're pretty slim. I think the poll that you mentioned indicates that they are. I think he'll be recalled, and I think Arnold Schwarzenegger will be elected governor.

PELLEY: Let's have a look at that poll for just a moment, the Time-CNN poll out this weekend. If the election were held today, 54 percent would vote to remove Gray Davis -- among Republicans, it's 75 percent; among Democrats, 39 percent. And who would they have in the governor's office? Twenty-five percent are behind Schwarzenegger at this early stage; 15 percent with the Democrat candidate, Lieutenant Governor Cruz Bustamante.

Governor Wilson, we've heard a lot of one-liners from Mr. Schwarzenegger, but what's his plan for saving the California budget?

WILSON: Scott, you will not be surprised to know that as the -- not the candidate but simply as a friend, I'm not in any position to give you the detailed statement that you can expect from him. But what you can expect and what he has said very clearly is that he is offended, he is outraged, as are other Californians. By the record of this governor, which has brought about an unprecedented default, we have seen him spend us into a $38 billion hole, we have seen him deteriorate the business climate, so that California is now regarded as an undesirable place in which to create jobs. And we have seen him also bungle what was a problem and make into a crisis the shortage of electricity. And I...

PELLEY: Governor, help us -- I'm sorry, sir.

WILSON: Go ahead.

PELLEY: Help us understand. If those are the things that Schwarzenegger's against, what is he for?

WILSON: He's for creating the kind of California that Gray Davis inherited. We gave him a California that was viewed as an excellent place to do business, to create jobs. We welcomed investment. Left the governor with a fat surplus, a multibillion dollar surplus, a business climate that was inviting and was creating jobs. In fact, creating jobs in my last three years in office at a rate that exceeded the combined rate of growth in New York, Pennsylvania and Illinois. We created more jobs than those three states put together.

PELLEY: Mayor Brown, is this all Gray Davis' fault?

BROWN: Of course not, and Governor Wilson knows it isn't all Gray Davis' fault. It was Governor Wilson who caused...

WILSON: ...(Unintelligible).

BROWN: It was Governor Wilson who, in fact, orchestrated the business of deregulating energy. Mr. Davis inherited that responsibility and attempted to, of course, put it together, but it was never properly structured at the outset.

Secondly, you should know that there's never an occasion when any single individual is responsible for the deterioration of the economy of this nation. Gray Davis, clearly, is not responsible for that.

Thirdly, in California, you have a unique problem of having to get one-third of a -- two-thirds vote for any expenditure of any significance. And, of course, that means the Republicans, in California, can block you or approve it. In this case, every nickel expended was by two-thirds vote of both houses of the Legislature made up of both Republicans and Democrats.

And then finally, of course, the national economy is what drove the job market up in California, the advent of the dot-com, not any single political figure, including Pete Wilson, my good friend, who was awesome, and who did participate with us as a team in the early 1990s to straighten California out, and we did a good job of doing that.

PELLEY: Well, speaking of the national setting, the president seemed to weigh in on Schwarzenegger this week. Reporters asked what he thought about the action star at Mr. Bush's Texas ranch.

(FROM VIDEOTAPE)

President GEORGE W. BUSH: As I say, I'm interested in the process. It's -- it's fascinating to see who's in and who's out. And, yeah, I think he'd be a good governor.

(END VIDEOTAPE)

PELLEY: Mayor Brown, is that an endorsement? If so, what's it mean to the race?

BROWN: Oh, I think that's always been an endorsement. I think he was always for Arnold. I think the Republicans have pretty much orchestrated this whole thing. That's why Mr. Issa is out. I can tell you this, though. With Ueberroth in, with McClintock in and with Simon in, it's going to be an interesting process for Arnold Schwarzenegger because all of a sudden he is not going to get a free ride, he's not going to be on the "Jay Leno" show. He is going to have to go man to man with Gray Davis. And when that happens, I guarantee you there will be a different reaction from the public, particularly the 39 percent Democrats who are now misguided.

PELLEY: Governor Wilson, is the White House behind all of this?

WILSON: No, of course not. They are not in any way behind it. And I would just remind my friend, Willie Brown, that what we did has not been done by this governor. And in fact what he has done is not deal with an irresponsible Legislature that has engaged in limitless spending. They spent through the surplus that we left them. They then spent themselves into a hole, $38 billion.

The problem isn't that we haven't taxed people enough. They're taxed heavily in California.

PELLEY: Governor, do you...

WILSON: The problem is that they have spent at a rate that is just irresponsible. And that is his fault. He is the only one who can check that. The governor has that power.

PELLEY: Well, sir, gentlemen, speaking...

BROWN: Yeah?

PELLEY: ...speaking of the president, let me ask you, Governor, do you want the president to come to California and campaign for Arnold Schwarzenegger?

WILSON: Well, I think the governor -- I mean, I think that President Bush is going to come to California for his own purposes. But obviously we welcome him. We welcome his endorsement. But he hasn't really made an endorsement, per se. He has ventured his opinion that Arnold Schwarzenegger would be a good governor. And, indeed, he will be. Because he's...

PELLEY: Mayor -- Mr. Mayor, you forgive me, Governor.

WILSON: Go ahead.

PELLEY: I apologize for interrupting.

WILSON: That's all right.

PELLEY: Mr. Mayor, I did want to ask, you have said that the Democrats will have trouble with Schwarzenegger. Why do you think so?

BROWN: I think that the celebrity status of any person running for public office in California many times covers up all of the other inadequacies. As indicated at the top of the program, when you asked Governor Wilson 'What do you think this man stands for and what is he about?' none of those things are translatable into actual conduct when pulling the Legislature together, both houses, both parties, when trying to get a harness on all the people that impact upon the decision-making in California.

You've got to be able to look the people in the eye and say, 'Those increase in college fees, I'm going to roll back, and I'm going to do it by a dollar 50 cents increase in taxes on cigarettes.'

You've got to look them in the eye and say, 'I'm going to reduce the deficit that we have by in fact eliminating the following services.' Services, you understand, that both houses of the Legislature Has approved and the public has demanded. There is no mystery about any of that, and let me assure you when those things happen then the fear that we currently have of the celebrity status of Mr. Schwarzenegger will go right out the window.

PELLEY: Governor, let me ask you. You know Mr. Schwarzenegger well. I think you know a great deal about the campaign that is forming in front of him now. Do you think he'll debate?

WILSON: With 158 people?

PELLEY: Maybe we could...

WILSON: I mean, hard...

PELLEY: Maybe it would be possible for California to cull that down, perhaps, sir, Maybe to four or five. I don't know if that's possible but...

WILSON: Well, I don't know, either, let me -- let me just...

PELLEY: ...would Arnold Schwarz--Schwarzenegger stand for debate?

WILSON: Let me just make a point here. Mr. Brown seems to have forgotten what he said about Governor Davis as recently as last week, when he was asked why he thought that Arnold Schwarzenegger would be a formidable candidate -- and by the way, he was joined in that opinion by the other Democratic Governor Brown, Jerry Brown -- he said because Gray Davis not only has no personal relationships, but he has not been hands-on in management of policy. He has not been decisive. He has been too slow in making appointments. There's been a classic default here, and default really unprecedented in the history of this state. And all the things that governor--or that Mayor Brown just mentioned, as necessities to deal with the budget, are exactly the things which Governor Davis has failed to do, not just this year, but for three years.

PELLEY: Mayor Brown?

BROWN: Yes.

PELLEY: How do you respond to that, sir?

BROWN: I respond to it very simply. Governor Wilson knows that in fact the budget was signed into law by Mr. Davis. It was orchestrated by Mr. Davis. It was less than 30 days late.

During the term -- during the time when Pete Wilson was the governor of California, sometimes we went a longer period of time. I remember one particular time we had a major argument over substantive issue called funding for schools, and the budget was held up. The budget is always held up over principal issues, not politics. It's not an absence of leadership that causes it. Usually it's held up because of leadership and because of strong views. Yes, Mr. Davis may very well have a problem with reference to personal relationships. But that has nothing to do with whether or not he can lead the state of California.

When he put the Healthy Start for Kids together in terms of their health, when he put the program together that allowed us to do the funding for class size reduction, which was started in the Wilson administration, when he put together the program which became inclusive, and by the way the absence of appointment means that those appointments made by Mr. Wilson stays in place.

PELLEY: Mr. Mayor...

BROWN: That's an acknowledgment of the goodness of what Pete Wilson did.

PELLEY: Mr. Mayor, let me put this question to both of you gentlemen, because those of us in the other 49 have got to be wondering whether this process is broken. Let me submit this to you. If I understand this correctly, it is possible for Gray Davis to win 49 percent of the vote and lose in the recall election, while one of his opponents could gain 15 percent of the vote and become the governor of the most populous state in the country.

Governor Wilson, is that right? Is this system broken?

WILSON: Well, no, it's not broken and it's not all that different from what happens frequently when someone manages to win a primary and then loses in the general election. Governor Davis himself is not holding office by virtue of having won a majority of the votes in California in the last election.

BROWN: Well, that's...

PELLEY: Mayor Brown, what do you think of the process?

BROWN: I think the process...

PELLEY: Many people in this country think that's a little bit wacky.

BROWN: I think it's totally wacky. The process is flawed. The idea of a recall was simply the -- designed so that the people, where there was no impeachment could, in fact, do the impeachment. An impeachment says there should be a bill of particulars. You should be accused of something.

In this case, Gray Davis was re-elected November of 2002. Everything Pete Wilson and everybody else said about him, the voters knew, but they gave him the job in a regular election. Nine million people showed up to cast votes. There are 15 million registered voters in California. Gray Davis won that election by 5 percentage points over his Republican opponent.

Almost instantly the idea of a recall took place, and in fact, as early as February, six weeks after he had been sworn into office, when he had done absolutely nothing but have a cup of coffee, the idea of a recall.

PELLEY: Gov...

BROWN: It is being used as a political ploy and nothing else.

One more thing. When the issue goes down, and there is nose to nose between Davis and Schwarzenegger, forget all these other persons who are kind of fringe persons. Let the two of them debate. This election...

PELLEY: Governor...

BROWN: ...is about Schwarzenegger vs. Brown.

PELLEY: Governor, let me give you...

Mayor BROWN: Forget the others.

PELLEY: Let me give you the last word, and very quickly, sir, do you think Arnold Schwarzenegger will debate, and what is his key campaign promise to the state of California?

WILSON: I can't answer that because there's been no decision made. In fact, it has just come up. And what is his key decision or what is his key proposal? His key proposal is to do the kind of thing that will restore the economic health of this state so that people want to bring jobs to this state. You don't do that by spending yourself into a hole so degrading our credit rating, that our bonds are graded triple B -- that's one step above junk, and by destroying a business climate that was the best in the nation.

PELLEY: Gentlemen, we will have to leave it right there. I thank you very much for being with us this Sunday morning.

We'll be back in just a moment with our roundtable discussion.

(COMMERCIAL BREAK)

PELLEY: Welcome back.

Joining us now, two of the best political writers in the business: Jill Lawrence of USA Today and Dan Balz of The Washington Post.

Dan, let me start with you. Would a Republican governor in California make a difference in the presidential race?

DAN BALZ, The Washington Post: There's a possibility that there could, Scott.

It's interesting. I talked to a Republican consultant this weekend who said he views this recall in the way that Woody Hayes used to view the forward pass at Ohio State, which is three things can happen and two of them might be bad.

The good thing for Republicans would be if a Republican becomes governor and solves the Problems of California. The bad thing would be if a Republican becomes governor and the mess continues. That would make it more difficult for President Bush to put the state in play, which is really what the White House hopes to do in 2004.

PELLEY: Jill, what do you think? What does this comedy in California have to do with the presidential race?

JILL LAWRENCE, USA Today: Well, if -- this is a good opportunity for Arnold Schwarzenegger because he has some liberal positions on things like abortion rights, gay rights. It's unclear that he could get through a Republican primary. If he could win the governorship, it'd be a lot of progress for California Republicans and for President Bush because he is more in line culturally with the state and could possibly expand the Republican Party influence in California.

Now the Democrats have some problems with this -- there's going to be a lot of money and attention eaten up by this recall in the next two months when Democrats really need to do good third-quarter fund-raising. And the other thing is that if the Democratic Party and the labor unions and some of the other groups that spend money on Democratic races have to spend money on this, there may not be a lot left for the period after the nominee is chosen and before the convention triggers federal money. So they had hoped to help out the eventual nominee at that point in the process.

PELLEY: Let's talk a little bit about the Democrat race for the nomination. Howard Dean, Dan, candidate who just keeps coming.

BALZ: He is a phenomenon. He continues to be a phenomenon. He was on the cover of most of the newsmagazines this week, major profiles all week, and has now really shaped the race in such a way that Senator Lieberman, who's the most centrist or the most conservative Democrat in the field, has begun to take up the call that a Howard Dean nomination would drive the party back into the political wilderness.

So you now have a real debate within the Democratic Party over the future of it, and it's because of the way that Howard Dean has been able to energize both grass-root support, kind of mobilize the anti-Bush sentiment within the party, and do, frankly, a phenomenal job of raising money.

PELLEY: But, Jill, this is a post-9/11 America, of course. Howard Dean doesn't have much in the way of national security credentials. Vermont hasn't been at war in a long, long time.
How does...

LAWRENCE: That's right.

PELLEY: ...he jump over that problem?

LAWRENCE: Well, some of his supporters say he could jump over that problem by making Wesley Clark, the former NATO commander, his vice presidential partner in advance. Now I don't know how practical that is. I don't know whether he has any intention of doing that. He has been emphasizing that he is not a pacifist; that the war that he had problems with was the war in Iraq because he questioned the evidence--whether there was the evidence to go to war. And he is a kind of a complicated mix of liberal and--and moderate positions. He's a fiscal conservative, and he was in Vermont.

I think the question is, you know: How angry are Democrats? How anti-war are Democrats? How practical are Democrats? And that's still to be sorted out. There are so many -- between all the candidates in the field.

PELLEY: Dan, really, one of the most interesting things about the Dean campaign is the way they're raising money. Nobody expected that.

BALZ: Nobody expected that. And I think one of the things to watch for in the third quarter is how much more, if that's possible, he raises in the third quarter than he did in the second quarter. His folks believe that they will be able to match the $7.6 million that he raised in the second quarter.

I think what they're wondering, and I think what all Democrats are wondering, is if he has a -- you know, a huge quarter, $12 million, $13 million, $14 million, then you have got a real phenomena, and the party is going to have to really stand up and take notice. And I think that's what they are looking for themselves, to see whether this is a kind of a geometric explosion of support.

PELLEY: Jill Lawrence, Al Gore made a big speech this week in which he excoriated the administration on a number of fronts: the economy, the war, etc. He also said he wasn't going to run. He said that again. Is that a done deal? No chance.

LAWRENCE: I think it's pretty much a done deal. I think that it would take a draft to get him in. It would take a lot of dissatisfied Democrats, dissatisfied with all the nine candidates who are running. I don't think you're going to see that. There seems to be someone for everyone in the field. I think, you know, some of the candidates probably were kind of annoyed that he felt he needed to step in to fill, I guess, what he perceived as a vacuum. And it was typical of his luck that he had to do it in a week when everyone was completely focused on Arnold Schwarzenegger in California. So he probably didn't get as much attention as he might have.

PELLEY: Dan, Al Gore has to wake up every morning and say to himself, 'I got more votes for president than anyone in American history except Ronald Reagan.'

BALZ: He does.

PELLEY: He's not tempted to change his mind?

BALZ: Well, I think he crossed that bridge in December when he made the decision. I'd be quite surprised if he got into this race. I think there's almost no chance that that would happen.

But I think Gore has such dislike of this administration and of this president that he feels the need to try to help the Democratic Party frame a message. And one of the things that he was doing in that speech was to go, basically, at what is Bush's perceived strength, which is that he is a straight-shooter, that he is an honest guy, that he's a man of credibility.

And what Gore was doing in that speech, kind of across the board but beginning with Iraq, is to say, 'That is not the case with this president.' If the Democrats can make that stick, then they will be able to bring Bush's support down somewhat.

PELLEY: Jill, do you see any of the Democratic candidates dropping out anytime soon?

LAWRENCE: Well, the third-quarter fund-raising is going to hold the key, I think, for several of them. Several of them had disappointing second quarters. Several of them don't have that much cash on hand. I think the labor movement is going to be looking at Congressman Gephardt to see how he does. He had a very disappointing second quarter.

And some people are looking at electability, which they define as how a person's polls are doing, fund-raising and how good their staff is, how much momentum they seem to have and, in short, whether they can beat the president.

PELLEY: Jill Lawrence with USA Today, Dan Balz, Washington Post, thanks for being with us.

We'll be back with a final word in just a minute.

(COMMERCIAL BREAK)

PELLEY: That's our broadcast this Sunday morning. Bob Schieffer will be back next week.

For all of us at CBS News all around the world, I'm Scott Pelley. Thanks for watching Face The Nation.

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