Hot Stories for the Week of October 6 - 10

This is a partial transcript from The Beltway Boys, October 11, 2003, that has been edited for clarity.

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FRED BARNES, CO-HOST: Mort, the hot story and I mean extremely hot, as in red-hot, is "earthquake Arnold."

In the recall election, the election of Arnold Schwarzenegger (search) as governor was a humongous victory, it was important for Republicans, certainly a boost for them, and a humiliating defeat for ousted Gov. Gray Davis and for Democrats.

Now, Democrats, particularly in Washington, have come up with this utterly laughable and lame interpretation of the recall election, that it means that Bush as an incumbent is vulnerable.

Look, all you have to do is look at the numbers in the FOX News exit poll that show that the approval rating for Gray Davis was 27 percent, the approval rating for Bush was 49 percent which given that it…he's in his third year slump that all presidents have, is actually pretty good and, in fact, he finished ahead in the Gallup poll of California last month of all the Democratic candidates.

And…but I'm going to, I'm going to let you in on the real meaning, the five real things that of national implication that have come out of the recall election.

The first it means is that President Bush is competitive in California, which he lost by 12 points in 2000 but he's competitive in 2004.

That's what this means. Secondly, Arnold has established himself and I…you seem to always refer to him by his first name only…Arnold has established himself as the star moderate in the Republican Party, and I think it proves the image of the party showing it's a…that moderates applying there and conservatives as well. I think it makes Senator Barbara Boxer (search), who's a Democrat, vulnerable in 2004.

And, the last two things that are important coming out of this election, I think, have some baring on the Democratic presidential candidates, and one is attack politics which they specialize in, since in all their debates they just slam Bush, it failed, and interest group liberalism, which they also represent, was rejected.

MORT KONDRACKE, CO-HOST: Well, I agree with you that this is a total repudiation of the…the liberal Democratic establishment in California, and it is a mandate for Arnold to balance the budget by mainly by cutting its expenses and not by raising taxes.

The long term implications depend on whether he can deliver and whether the Democrats are so stupid as to sort of publicly and openly try to thwart him, in which case I think that he goes over to their head to the people and causes them real long term damage.

Now, I don't think it implies anything as to George Bush. George Bush's recall election is next November, right? And so if George Bush can get the economy going again and he can produce the success in Iraq then he becomes Arnold Schwarzenegger and not Gray Davis, although I think tyranny in California is a stretch for Bush.

Anyway, the other hot story is Arnold's agenda. And I think Arnold has made a good beginning. The first thing he's done is to reach out to Democrats. In a way that George Bush never did in 2001 when he was elected with no mandate, and also Arnold has got a good transition team going and his big problem, though, is that he has a deficit that may be $20 million, and he's talking about closing it with elimination of waste.

Now I've got news for him, you can't cut $20 million of waste.

The other thing, the other thing he wants to do is to get help of determined…well, I'll tell you about what kind of help he wants from George Bush when Bush visits next week and here's what Arnold said about that.


GOVERNOR-ELECT ARNOLD SCHWARZENEGGER (R), CALIFORNIA: I'm the governor of California and therefore I have to work with President Bush and to make sure that the federal government participates the way they ought to in order to help this state. If it is with energy problems, if it is with water problems, if it with getting more money for this state…all of those issues…there's many, many things that we can do together.


KONDRACKE: Well, apparently what Arnold is hoping for is that Bush will pay the education and health care advances of illegal aliens, which is a great idea.

The federal government should cover those bills except that Bush is not going to do that for him because he'd have to do that for every other state and all that Bush is going to basically do in California is give Arnold a high five.

BARNES: Well, I'm sure he'll do that. Now, look…the budget deficit is not $20 billion, it's $8 billion. $4 billion will be added to it when Arnold rescinds the car tax increase that was so unpopular and it was a mistake by Gray Davis.

Look, OK, so $12 billion. You can get $2 billion or more from the increased revenues that are going to come about by the economic recovery that's already underway by the way in case you hadn't noticed it.

Now Democrats increased spending 40 percent over the last four years. Do you think that…all that money went for essential government services? No way.

I mean that certainly is not true. But we're going to talk to Jim Brulte, the Senate Republican leader later. He came up with the budget last February that said…that cut $5 billion and said we'll free spending for two years and he balanced the budget. So, I think things are quite possible for him to do it without raising taxes.

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