Candidates Gear Up Campaigns in Recall Race

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One day after California Gov. Gray Davis (search) came out swinging against the recall effort to replace him, actor Arnold Schwarzenegger (search) kicked his campaign to replace Davis into high gear.

Schwarzenegger, who announced his bid for governor almost two weeks ago, was meeting with advisers participating in his California Economic Recovery Council.

"Everyone agrees the economy is one of the most pressing issues facing California. How do we turn California's economy back to a powerful job-creating machine that it once was," Schwarzenegger told reporters, before meeting with experts on how to kickstart California's indebted economy.

Included in the meeting are billionaire investor Warren Buffett (search) and former Secretary of State George Schultz (search).

The actor-turned-candidate also launched his first television ad on Wednesday, a 60-second piece that harkens back to another actor who had a very successful political career, former President Ronald Reagan.

"This historic election has come about because there is a tremendous disconnect between the people of California and the leaders of California," Schwarzenegger says in the opening segment of the ad.

Schwarzenegger is shot wearing his now trademark open-necked button-down shirt and blue blazer as he strolls through a garden patio. Making a populist appeal to voters irked at recent increases in the car tax and talk of more tax increases to balance the state's budget, Schwarzenegger offers what passes for specific policy proposals at this stage of the campaign.

"I'm running for governor to leave a movement for change and give California back its future. I stand for fiscal responsible government. Rebuilding California's economic engine, putting the needs of children first and reforming our political system ... so that the public interest comes before special interest."

GOP sources told Fox News that Schwarzenegger could spend as much as $2 million per week on campaign spots on TV and radio until the recall election. Schwarzenegger is also expected to pay for much of the campaign advertising.

Schwarzenegger spokesman Rob Stutzman said the campaign is delighted the spot will appear the morning after Davis blamed the recall election on a right-wing power grab and said the state's energy and economic woes were the fault of President Bush and Republicans in the state Legislature.

"The contrast is unavoidable," Stutzman said. "The debut of the ad coming right after Davis's speech will show Californians you couldn't have a better contrast of what leadership looks like, how failed leadership manifests itself. This is a leadership election and this is a choice between failed leadership and new leadership."

Davis told supporters at UCLA on Tuesday night that Republicans are trying to steal elections they cannot win.

"The Republicans behind the recall say they want you to vote me out because of past mistakes," the Democrat said at UCLA. "But they don't give a rip about past mistakes — they want power for the future, and with so many candidates, they think they can get it with the support of a tiny fraction of California voters."

Davis sought to remind voters, who've been deluged with images of celebrity contenders, including Schwarzenegger and political pundit Arianna Huffington (search), of his funding of schools and health care. The embattled governor planned to travel the state in the coming weeks to appeal to voters and set the record straight, said Peter Ragone, communications director.

"He knows the buck stops with him," Ragone said.

Davis addressed criticism of his personal style, and said, "This is not going to shock you: I may not be the warmest TV personality in politics, but I am warming to this fight."

He also acknowledged he made mistakes during California's energy crisis, and admitted no one was happy with the budget he just signed.

But he sought to place the state's troubles in the perspective of an American economy that has "tanked," and said the forces behind the recall effort were more interested in power than in the welfare of voters.

"For the next seven weeks, my highest priority is to do the job you elected me to do, but make no mistake ... I will fight this recall and the right-wing forces behind it," Davis said.

Duf Sundheim, chairman of the California Republican Party, rejected Davis' assertions. "To say that this is a right-wing conspiracy I think is an insult" to the 1.6 million people who signed petitions to force the recall, he said.

Davis' speech followed a press conference with Lt. Gov. Cruz Bustamante (search), the most prominent Democrat on the recall ballot, in which he released his plan to turn around the state's economy, further complicating Davis' fight to remain in office. Davis had sought to keep other Democrats off the ballot so he could focus on defeating the recall.

Bustamante pushed his "Tough Love for California" campaign, unveiling a financial plan that is particularly tough on the state's wealthy and its businesses.

"The folks at the top have to pay their fair share," Bustamante said at a press conference outside his home in Elk Grove, a Sacramento suburb. "The folks at the bottom have to pay something and the people being squeezed in the middle need some relief from the car tax and college fees."

The lieutenant governor said he wants to increase taxes on upper income payers and tobacco. In exchange, he will lower property taxes on vehicles worth $20,000 or less.

That's a switch from an earlier proposal he made to undo the entire car tax increase, which tripled this year to help pay for the state's $38 billion budget deficit.

In all, Bustamante, who reports say would feel no love lost for Davis should he replace him, is preparing an economic package that would raise taxes by $8 billion, closing loopholes on business tax breaks to the tune of $3.7 billion, and reduce spending by $4.5 billion.

Since the 2000-2001 energy crisis, Californians have witnessed the decline of the state's technology sector and a record $38 billion budget deficit, which triggered the vehicle tax increase, forced college fees to rise as much as 30 percent and has threatened state employees with layoffs and pay cuts.

Bustamante has said that he opposes the recall on principle but that Democrats need an alternative if Davis is ousted in the first section of the two-part ballot. Replacement candidates appear on the second part of the ballot.

Bustamante's economic plan is the first major policy announcement by a high-profile candidate in the week after the slate of 135 candidates was certified by the secretary of state. It follows Monday's endorsement of him by the California State Employees Association, the California Association of Highway Patrolmen and the California Conference of Carpenters.

And while the three top characters in the race hash out their policies, other candidates also plunged into their campaigns.

Former baseball commissioner Peter Ueberroth (search) told the Los Angeles Times Tuesday that he has some specific proposals for closing California's anticipated $8 billion budget gap.  Among them, he would allow a one-time tax amnesty, which he said could raise up to $6 billion. He also proposed cuts in spending, renegotiated state labor contracts and an assault on fraud in the Medi-Cal system.

Ueberroth said the state's long-term economic salvation lies in adding jobs. He does not intend to tamper with Proposition 13 (search), the state property tax cap that has been the subject of debate among Schwarzenegger proxies and Republican candidate Bill Simon (search).

Simon, who ran unsuccessfully against Davis last November, has already launched radio ads against Schwarzenegger, accusing him of supporting higher property taxes.

Key state and congressional Republicans have been lobbying Simon to leave the race to clear the field for Schwarzenegger, who is running close distance to Bustamante in the latest Field Poll. Strategists say Simon's 8 percent support is draining voters from Schwarzenegger's campaign.

Simon told Fox News on Tuesday that he will not back out of the race, plans to spend at least $9 million of his personal fortune on the race and will bring former New York Mayor Rudy Giuliani (search) to California to campaign on his behalf.

"I'm in this race to stay," Simon said. "We have all the experts saying what if this and what if that ... but I'm in this race to stay."

Simon used Giuliani effectively in the primary last year, basking in the reflected glow of Giuliani's stewardship of New York after the Sept. 11, 2001, atrocities. Simon was a former U.S. Attorney under Giuliani when Giuliani served as U.S. Attorney for the Southern District of New York.

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