Gov. Arnold Takes Ax To Car Tax

Calling himself "an idealist without illusions," Gov. Arnold Schwarzenegger took charge of California immediately after he was sworn in, repealing an unpopular car tax hike and calling the Legislature into a special session to deal with the state's budget mess.

But political observers agree: keeping his pledge to fix the state's beleaguered economy will be a formidable task for the political newcomer, who faces a budget deficit he believes is already more than $24 billion and a business climate he has cast as the nation's worst.

"He has to get to work and he has to show results very early; that's why he's going after the vehicle license fee, the car tax, because that's something he can do right away," political scientist Jack Pitney told CBS News Correspondent Bill Whitaker.

Despite his overwhelming win in the Oct. 7 recall election, Schwarzenegger also faces a Democrat-dominated Legislature that may not grant his wishes.

Schwarzenegger still has released no concrete plan to get the state over the hump, and analysts say the problem won't be solved with movie star charisma, reports Whitaker.

"I don't think that it gets solved with personal popularity," says political scientist Bruce Cain.

"He's got a tough challenge on his hands," said former Republican governor George Deukmejian, who attended Schwarzenegger's swearing-in ceremony Monday. "I don't envy him."

With his wife, Maria Shriver, holding a Bible, Schwarzenegger took the oath of office from California's chief justice in a short ceremony on the steps of the state Capitol.

An immigrant from Austria who arrived in the United States 35 years ago as a body builder dreaming of fame and fortune, the 56-year-old Republican invoked former Presidents John F. Kennedy and Ronald Reagan and called himself "an idealist without illusions."

"Perhaps some think this is fanciful or poetic, but to an immigrant like me, who, as a boy, saw Soviet tanks rolling through the streets of Austria, to someone like me who came here with absolutely nothing and gained absolutely everything, it is not fanciful to see this state as a golden dream," Schwarzenegger said as he officially took the helm of the nation's most populous state and the world's sixth-largest economy.

As he was sworn in, Schwarzenegger was accompanied by four of the five living former governors of California, including Gray Davis, who he replaced. Only Reagan, who is suffering from Alzheimer's disease, was not present.

The ceremony was devoid of much of the usual inaugural pageantry. Bitterness over the recall vote and the state's financial troubles prompted Schwarzenegger to push for a more low-key ceremony.

Nevertheless, the inauguration had 7,500 invited guests, in addition to several thousand people watching from the street, and drew such celebrities as Dennis Miller, Jamie Lee Curtis, Danny DeVito, Rob Lowe and Vanessa Williams, who sang the national anthem. Hundreds of journalists from around the globe covered the event, some from Japan, France and Schwarzenegger's native Austria.

The recall movement was launched in February by activists angered over the state's budget woes and the prospect of higher taxes.

After repealing the tripling of the car tax shortly after the ceremony, Schwarzenegger signed proclamations calling the Legislature back into special session Tuesday.

Schwarzenegger wants lawmakers to reform workers' compensation law, deal with the budget deficit and repeal a bill granting driver's licenses to undocumented immigrants.

He also said he wants the Legislature to put a massive bond proposal before voters on the March 2 ballot, and set a state spending cap to prevent the creation of such a huge financial hole in the future — both items that lawmakers will need to act on before Dec. 5.

Also Monday, Schwarzenegger suspended implementation of new state regulations and called for a review of all regulations adopted, amended or repealed during Davis' administration.

In a speech, Schwarzenegger promised to spend the next three years rebuilding the state's economy, protecting the needs of children and the elderly and breaking the hold of special interests.

"I enter this office beholden to no one except you, my fellow citizens. I pledge my governorship to your interests, not to special interests," Schwarzenegger said.

Although he had never held elected office, voters picked Schwarzenegger to replace Davis last month. Positioning himself as a reformer, Schwarzenegger won with 48 percent of the vote over a list of 134 other candidates vying to replace Davis, who was bounced by 55 percent of the voters.

At a lunch that followed the ceremony, Schwarzenegger urged legislators to heed the call of California voters and put aside partisan politics to solve the state's problems.

Front and center will be the state economy which, while showing some signs of recovery, is troubled. California's credit rating is the lowest among all 50 states and state finances are in disarray.

Schwarzenegger promised to put the state's finances in order, and added "I will not rest until California is a competitive, job-creating machine."

Democrats, still the state's dominant party, have said that they will be willing to give the new governor a chance — but most observers agree political good will is not a lasting commodity.