WASHINGTON —  Throughout the spring, California Gov. Arnold Schwarzenegger (search) feuded bitterly with Democrats in the Legislature over government reform measures he wants voters to consider in a special election this November.

Lately, however, the partisan chill has begun to thaw as recent polls have shown both sides are losing ground, with a dramatic drop in the governor's job-approval ratings and the Legislature more unpopular than ever.

Now they're inching toward compromise that could avert a high-stakes showdown at the ballot box this fall, as Schwarzenegger seeks to reclaim his popularity and Democrats seek to avoid a costly challenge to their political power.

"We are in the thick of negotiations on what I call 'the whole enchilada,'" Assembly Speaker Fabian Nunez, a Los Angeles Democrat, said in an interview with The Associated Press.

Both Nunez and Senate leader Don Perata, an Oakland Democrat, met with Schwarzenegger several times last week to discuss a potential deal.

In theory, a negotiated settlement would mean both sides would unite behind a package of bipartisan reforms they would send to the ballot for ratification by voters. The election will take place Nov. 8 — at a cost of more than $50 million — even if they reach a compromise because Schwarzenegger has signed the proclamation declaring it.

At issue are the three measures Schwarzenegger placed on the special election ballot. The governor wants to cap state spending, redraw legislative districts to make seats more competitive and make teachers work five years instead of two to gain tenure.

The ballot also has five initiatives placed on the ballot by others and one, the so-called "paycheck protection" measure, goes to the heart of Democratic power. If passed, it would require public employee unions to get permission from their members before dues could be used for political purposes. It could significantly cut the flow of campaign contributions to Democrats, the greatest beneficiaries of union money.

Schwarzenegger has not publicly endorsed that initiative, but members of his political team were instrumental in steering it onto the ballot and backers are counting on his support.

Many conservatives oppose compromise on Schwarzenegger's "Year of Reform" measures because they believe the special election offers their best chance in years to curb the power of Democrats and labor unions. Democratic activists sense that Schwarzenegger is vulnerable and would love to try to defeat his initiatives at the polls.

Even so, the impetus to seek a bipartisan agreement on the reforms was heightened this past week when a new statewide poll posted cautionary signs for Schwarzenegger and Democrats alike.

The Field Poll found that Schwarzenegger's job approval has skidded to just 37 percent, down from 55 percent in February and 65 percent last September. And only 37 percent of voters support a special election to consider his reform measures.

A subsequent poll showed voters support only one of the Schwarzenegger's three initiatives, the teacher tenure measure.

The news wasn't any better for Democrats.

Just 24 percent of voters approve of the job the Legislature is doing, a 10-point drop since February. And the ballot initiative Democrats object to most, the union dues measure, was supported by 57 percent of voters.

Several of Schwarzenegger's political advisers publicly dismissed the poll findings. But the governor himself called a news conference and promised to step up his effort to seek a compromise with legislators.

"It's very clear the people are sensitive to what's happening in the Capitol," Schwarzenegger said Tuesday. "Everyone wants us to work together."