THE STATE : POLITICS : For Wilson, Orange County Is a Two-Edged Political Sword

There’s a potential land mine in Pete Wilson’s path to the presidency, should he take that route, and it is Orange County. The county’s dramatic bankruptcy may play politically in ways no one could have anticipated.

Orange County has long been the bedrock of Republican support in California. It’s nearly impossible for a GOP candidate to win a statewide office without a strong showing there. For example, in the 1994 gubernatorial election, Gov. Wilson beat Democrat Kathleen Brown by 15 points statewide; in Orange County, he won by nearly 40 points.

A reluctance on Wilson’s part to help the bankrupt county could put that level of support at risk. The governor has already pledged no state bailout. But can he stand by and let the county default on its bond commitments? “If Orange County is pushed into default,” predicted lobbyist Dennis Carpenter, “there will be a ripple effect not only on other local jurisdictions but on the state itself.” Nationally, there is some worry on Wall Street that an Orange County default could undermine the municipal-bond market.

What presidential prospect would want these negatives on his resume? No matter how the financial crisis is resolved, however, it’s likely that Wilson will have to deal with the charge that he bears some responsibility for what has been called “the nation’s largest municipal bankruptcy,” because Orange County happened on his watch.

Pollster Mark Baldassare, who tracks public opinion in Orange County, says that the fiscal problem “has to be solved this year, or Wilson is going to be caught up in the blame that is now being focused on the Board of Supervisors.” With the debacle’s most visible Democrat, former County Treasurer Robert L. Citron, out of the picture, voter anger will likely remain riveted on Republican officials. That’s not likely to be helpful to any GOP candidate fishing for votes in the county.

There are two litmus tests for national GOP candidates courting conservative support. Opposition to abortion is one, and that’s a test Wilson flunks. Opposition to new taxes is the other, and Republicans have not trusted Wilson on this issue since 1991, when he signed the largest tax increase in California’s history. His proposal to cut individual and business taxes by 15% over three years is part of his penance for this transgression.

So the need to rescue Orange County presents a real dilemma for Wilson. To play Republican national politics, as well as to win GOP support for his state legislative agenda, he has to help Orange County. The governor must be sure he is perceived as part of the solution, before his opponents can position him as part of the problem. But he also has to be careful not to touch the tax-increase issue, which is what got him into trouble with conservatives in the first place.

There is also the matter of Wall Street and business executives demanding aggressive state intervention on Orange County’s behalf; some are even uttering the “T-word.” If Wilson appears unresponsive to their concerns, he could risk alienating significant sources of presidential campaign contributions.

Whether Wilson wants to govern California or be a serious presidential contender, he needs to pass a state budget. He can’t afford another 63-day fiscal dust-up. Neither can California’s credit rating. What newly resurrected Assembly Speaker Willie Brown and his Democrats say, and do, with respect to the Orange County crisis may be a factor.

Brown, angered by Wilson’s support for the recall of Republican-turned Independent Assemblyman Paul Horcher, has indicated he’s going to make Wilson’s budget negotiations miserable. One of Brown’s early demands is that there be no state assistance to Orange County unless Orange County taxes itself. That is a position abhorrent to Orange County legislators. And that will certainly affect budget negotiations.

The longer this posturing goes on, the more likely it is that neither Republicans nor Democrats will emerge unscathed. Referring to Orange County officials as “these Las Vegas-type gamblers,” Brown vowed, “I’m going to treat Orange County with the same degree of consideration that Orange County’s legislators have treated the rest of the state in its time of (past) crisis.” Indeed, Californians unimpressed with the county’s high-rolling finances and angered by the stinginess of its GOP legislators in times of disaster, may side with the Democrats.

This attitude alone could be enough to push Orange County voters back into the Republican fold, should any stray. And if Brown rigidly persists in his demand for new taxes, that could hurt Democrats by underscoring their “never-met-a-tax-they-didn’t-like” reputation.

The 18-member Assembly Select Committee on the Insolvency of Orange County may add to the problem. Its Democratic members are primarily urban liberals; the GOP delegation consists almost entirely of Orange County conservatives. That’s a mixture sure to lead to another round of ideological combustion.

Orange County may also foreshadow the contours of the debate over affirmative action. Will women and minority employees--many hired because of affirmative-action programs--be “first-fired” when personnel cutbacks are required to trim government spending? Should they be the first to go?

Wilson has already endorsed the proposed California civil rights initiative, which would dismantle state affirmative-action programs. He certainly feels pressure to be out in front on a political issue that may drive the 1996 elections. But there may be more to his strategy.

The debate over affirmative action could offer Wilson an opportunity to shift media and public attention away from the Orange County bond debacle onto a issue of greater importance to conservative voters. That’s what he did so effectively in the ’94 gubernatorial campaign, when he used crime and immigration to deflect scrutiny from his vulnerable record on taxes, education and the budget.

Cynical voters always ask of elected officials: “What have you done for me lately?” Their support depends on a satisfactory answer, which is what Wilson needs to give the citizens of vote-rich Orange County--and he needs to do it well before 1996. It’s good government. It’s necessary politics.*