Sounding more like a politician than a movie star, candidate Arnold Schwarzenegger (search) appeared at the Los Angeles County Registrar's Office Thursday to pick up the papers to begin his campaign for governor of California.

"It is very important that we straighten out the mess we are in," Schwarzenegger said while holding the packet of registration papers. "I have a very good agenda. The first and most important thing we have to do is we have to overhaul our economic engine in California. We have to bring back businesses to California and to make sure everyone in California has a great job, a fantastic job.

"The second most important thing is our children," he added. "I think it is very important that our children have the first access to our state treasury and get the money so they can have great schools and great education."

Later Thursday, the California Supreme Court dismissed all lawsuits related to the gubernatorial recall, clearing the way for an Oct. 7 vote on whether to remove Gov. Gray Davis (search) from office. Davis was elected to a second term last November but has been widely criticized for manufacturing the state's budget crisis.

Hundreds of supporters stood outside the courthouse as Schwarzenegger spoke about his passions — after-school programs and childhood initiatives. They cheered when Schwarzenegger said that he wants to clean up the state capital Sacramento and put the public interests in front of self-interests.

The Austrian-born action hero said he would have a detailed plan shortly to address the fiscal crisis California faces.

"We have a $38 billion budget deficit that we have to deal with and the only way we can deal with those issues is by bringing business back to California," he said. "People are always talking about two things — raising taxes and cutting programs. I think the third one is bringing business back to California and making California a business-friendly environment."

Schwarzenegger announced his plan during a taping of "The Tonight Show With Jay Leno."

"The politicians are fiddling, fumbling and failing. ... The man that is failing the people more than anyone is Gray Davis. He is failing them terribly, and this is why he needs to be recalled and this is why I am going to run for governor," he said.

Schwarzenegger's announcement took many in and outside California by surprise — perhaps most of all, U.S. Rep. Darrell Issa (search), the third-term congressman who clearly thought that funding the recall campaign with $1.7 million of his own money would nearly guarantee him the seat.

Issa at first gave no indication that Schwarzenegger's candidacy would impact him so much, but outside the Registrar of Voter's office in San Diego on Thursday, the three-term congressman was clearly distraught, breaking into tears as he announced he will retain his seat in Congress rather than seek the governor's post.

"I will continue with my wife's support to fund the effort to recall Governor Davis and when it's over we will return to Congress to support President Bush's effort for Middle East peace," he said. 

Issa said the recall was never about a mere desire to hold higher office: "It was about higher obligation."

"Gray needed to go, and in 61 days he'll be gone," he said.

Issa declined to endorse anyone, but said Schwarzenegger's announcement helped assure him there will be enough qualified candidates for the office.

"It has nothing to do with Schwarzenegger's decision, other than I needed to know that there were several strong candidates," he said.

Former Los Angeles Mayor Richard Riordan (search) also took himself out of the running late Thursday and endorsed Schwarzenegger, a friend and a fellow moderate Republican. Riordan had said he would consider running if Schwarzenegger decided not to.

Green Party candidate Peter Camejo, who earned 5.3 percent of the vote in last year's governor's race, added his name to the growing list. GOP businessman Bill Simon (search ), who lost to Davis in November, was expected to jump in the race Saturday.

Back in Los Angeles, Schwarzenegger said that leadership is the most important qualification he possesses to run for political office.

"In everything I ever did, I showed great leadership," Schwarzenegger said. "There were times when people said it could never be done — that an Austrian farm boy could come over to America, get into the movie business and be successful in the movie business. They said we cannot pronounce your name, you cannot speak English well and your body is overdeveloped. And you know what happened. I became the highest-paid entertainer in the world."

He also took one of many expected swipes at Davis, saying that experience clearly isn't always the answer.

"Gov. Gray Davis has campaigned and said, 'This is experience you can not buy.' Well, look where he has gotten us. We now have been put in a situation that is worse than ever in the history of the state of California."

While many of the candidates running for office are wealthy — political pundit Arianna Huffington (search), conservative businessman Bill Simon (search) and Hustler publisher Larry Flynt (search) come to mind — Schwarzenegger is banking on his bankroll to demonstrate that he is in fact the best candidate for the job.

Estimated to be worth about $170 million, Schwarzenegger has said on several occasions that special interests cannot buy him, and on Thursday he repeated the refrain that he is rich enough to escape outside influence.

"I have enough money that I don't have to take any money from special interests. Right now we are in the situation that we are in because special interests are the ones that are ruling Sacramento," he said.

Schwarzenegger has already picked up several endorsements. On Thursday, former U.S Rep. Michael Huffington (search), the ex-husband of Arianna Huffington who had considered running himself, stated his support.

"Arnold is a charismatic leader who would be able to work with all segments of the California political spectrum, and our state needs a uniter right now," Huffington said in a statement.

Schwarzenegger also quickly picked up the endorsements of three Republican representatives: Mary Bono (search) of Palm Springs, David Dreier (search) of San Dimas and Dana Rohrabacher (search) of Huntington Beach.

But Schwarzenegger is among hundreds of candidates who have said they will seek the governor's seat.

The latest to consider entering the race was Peter Ueberroth (search), the former baseball commissioner who ran the 1984 Summer Olympics. He took out papers Thursday to run for governor, and an aide said if he did, the moderate Republican would only finish out the Davis term.

Former child star Gary Coleman (search), who played Arnold Drummond on the sitcom "Diff'rent Strokes" from 1978 to 1986, has also placed his name in the ring for the governor's race.

State Sen. Tom McClintock also filed papers Tuesday.

On the Democratic side, Lt. Gov. Cruz Bustamante (search) announced hours after the Leno show that he would file papers on Thursday.

Insurance commissioner John Garamendi (search), also a Democrat, was expected to follow suit.

Analysts from both parties believed the governor's chances for survival would have dramatically improved if other Democrats, particularly Sen. Dianne Feinstein (search), who tops polls as California's most popular politician, stayed off the ballot. Feinstein announced Wednesday that she would not run.

With Schwarzenegger's entrance into the race, Democrats not only decided to go for the seat, but started the attacks on the instant frontrunner.

"With the candidacy of Arnold Schwarzenegger, we now have 'the Terminator meets the Exterminator.'  This is clearly an extension of Congressman Tom DeLay's extreme Republican agenda to undermine Democratic values, using a familiar public face to promote poisonous policies that favor special interests over the public interest," House Minority Leader Nancy Pelosi said, referring to the House Majority Leader.

Democratic Party sources say Pelosi, from San Francisco, has changed her mind and now believes Democrats need a replacement candidate.

On July 24, Pelosi said, "In order to defeat the recall, it is essential that no other Democratic name be on the ballot."

Fox News' Major Garrett and The Associated Press contributed to this report.