SACRAMENTO — Gov. Arnold Schwarzenegger retreated Thursday from his ambitious plan to convert the state pension system to private accounts, part of his sweeping agenda for change in state government.
Opponents immediately cast Schwarzenegger's abandonment of the current proposal as a political defeat, a sign that he was backing away from his bold call in January's State of the State speech for an overhaul of state government.
The agenda he outlined then included automatic controls on state spending, teacher pay based on merit rather than on seniority, a new method of determining voting districts and the pension switch that he said would curb state costs.
Conceding that the proposed ballot initiative he had embraced to revamp public pensions was flawed, Schwarzenegger said he was abandoning pursuit of the idea until at least June 2006.
He will strive instead to overhaul the pension system through negotiations with lawmakers, he said. But "we will have reform," the governor added. "Come next year, we will have the pension reforms, and we will bring stability to the pensions."
The initiative would have stripped public employees of death and disability benefits, according to an analysis by state Atty. Gen. Bill Lockyer.
That prospect enraged police, firefighters and other law enforcement groups, a formidable coalition that promised to mobilize against the measure in a possible special election this fall.
Schwarzenegger indicated Thursday that he still might call a special election if lawmakers refused to adopt the other parts of his agenda.
"After talking a lot about blowing up the boxes of government and having to retreat on that, and having to retreat on this, I hope the governor is getting the message that bipartisanship and working with the Legislature is the recipe for success," said state Controller Steve Westly, a Democrat who campaigned with Schwarzenegger last year in favor of initiatives on state borrowing and balanced budgets.
Just days ago, the governor's aides and political allies had said the pension initiative enjoyed public support. People were lining up in impressive numbers to sign petitions aimed at putting it on the ballot, they said.
But for weeks, Schwarzenegger and his aides have heard complaints as they met with widows of slain officers and public safety management groups, trying to build support for his pension ideas. The groups bluntly told the administration that they wanted Schwarzenegger to disavow the initiative.
