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Press Release

This Week: Arnold Hits Taxes and a Union Blasts Bush


It’s another slow week in August in Washington, but there’s plenty of action in California and a troubling shake-up in the largest public employee union. Here’s a quick round-up:

California Recall Debate Focuses on Taxes

It looks like the recall race to replace Gray Davis is shaping up as a showdown between Arnold Schwarzenegger and Cruz Bustamante, the Democratic Lieutenant Governor. This week Nancy Pelosi led House Democrats to make a group endorsement of Bustamante should the recall vote pass. No surprise here. Bustamante should be called “Bustabudget,” because his ideas for solving the California spending crisis are the same old liberal mishmash of high taxes and more big government. He’s already calling for new taxes on high-income workers, commercial property, and tobacco. It seems like everyone in politics in the Golden State is incapable of actually cutting the bloated state budget.

That’s one reason Arnold is generating so much excitement: he’s the ultimate outsider. But it’s not clear where Arnold will come down on these critical fiscal issues. Some of his advisors, like lefty billionaire Warren Buffett, have all the wrong ideas when it comes to restoring prosperity to the state. However, Arnold sounded absolutely Reaganesque on taxes this Wednesday at a news conference:

“I feel the people of California have been punished enough. From the time they get up in the morning and flush the toilet they're taxed. When they go get a coffee they're taxed. When they get in their car they're taxed. When they go to the gas station they're taxed. When they go to lunch they're taxed. This goes on all day long. Tax. Tax. Tax. Tax. Tax.”

Yes! But our concern that Arnold is getting horrible advice from some of his staff was reinforced when his campaign spokesman Sean Walsh told Fox News that Arnold would consider a tax increase, saying:

“The truth of the matter is it [the state deficit] could be as high as $20 billion. We do not know what the totality of this fiscal situation is. For all we know, there may be zero dollars in the bank. So, you never say never.”

Weasel words! Arnold should clearly rule out a tax increase and run on cleaning house in Sacramento.

Public Employees Union Declares War on Bush and U.S. Taxpayers

At their convention in Las Vegas this week, delegates of the American Federation of Government Employees, the largest union of federal government employees, removed their sitting president Bobby Harnage Jr. in a surprise vote. The union, which represents about 600,000 bureaucrats, wants to take a more aggressive stance towards the Bush administration.

John Gage, the new president, told the Associated Press: "We're going to be more aggressive -- I don't think there's any question about that…We want to let the public know what is happening and mobilize people to fight back.”

Among other things, Gage and his minions are angry that Bush fought for commonsense labor management rules at the Department of Homeland Security. It seems that the AFGE is more interested in featherbedding than they are in protecting our national security.

All of this just underscores the inevitable failure of any strategy of accommodating or working with the unions. In fact, in terms of the growth in government spending and government jobs, President Bush’s term has been extraordinary—just the establishment of the Transportation Security Administration created 50,000 new public employees. But the big government labor unions will never be satisfied— witness this AFGE action and the Teamsters recent endorsement of Dick Gephardt for President.