Is It “THE END” For Arnold’s California Pension Reform Plan?

California Governor Arnold Schwarzenegger, the movie star governor put in office with the votes of thousands of independents and Democrats, has just suffered his first major defeat.

His plan to overhaul the state’s pension plan has bombed and he has taken it off the table — for now, he says — for an overhaul:

SACRAMENTO, Calif. – Under pressure from firefighters and police officers, Gov. Arnold Schwarzenegger on Thursday backed off, for now, his plan to privatize California’s public employee pension system.

The Republican said “misconceptions” among firefighters and police officers that privatization would strip them of death and disability benefits had come to dominate the issue.

Over the past few weeks, Schwarzenegger has waged a campaign to put privatization on the ballot during a special election next fall. But on Thursday, he said he would wait until the June 2006 election if lawmakers did not craft a compromise measure in the coming months.

“Let’s pull it back and do it better,” said Schwarzenegger, flanked by more than a dozen police, fire and local government leaders.

The move followed days of meetings with police and fire chiefs and survivors of firefighters and police officers killed in the line of duty, all of whom expressed concerns that the ballot language opened the possibility that the employees would lose death and disability payments.

The attorney general’s office, analyzing the proposed ballot language, had earlier reached the same conclusion.

Schwarzenegger said that was not his intention.

This underscores a couple of realities at play here in California:

1. Schwarzenegger came to power in a recall and vowed to shake things up and not be bossed around by the state’s powerful interest groups. The interest groups have been equally determined not to be bossed around by him.
2. He was elected by getting a huge chunk of independent votes and votes from Democrats who felt then-Governor Grey Davis was an incompetent and a disaster for the state. Republicans were actually somewhat split over Schwarzenegger.
3. As he has battled for his reforms the state Republican party has embraced him increasingly and openly. Schwarzenegger has subsequently accentuated his verbal sparring with Democrats and he has started to lose support from many Democrats and even independents. He’s still one of the state’s most popular politicos…but his polling numbers have been going down. He wasn’t elected because people wanted a Republican; he was elected because people wanted to fire the previous governor.

So it’s inevitable that Arnold S. would have to become more vulnerable as time goes on. He still has a sunny political disposition more like Ronald Reagan than any other politician in recent memory here. So he’s not down and out yet.

But if he starts losing that aura of a truly independent political figure and starts getting the image of being the state GOP’s poster boy he may lose some of the independent support he had. Pulling back the pension plan was an exceptionally wise idea — which shows that A.S. thinks in longterm strategical terms; he can use his political capital — which he still has — for his other reform measures later. And you better bet he will.

He’ll be baaack…