For Gov. Arnold: Now The Hard Part

California voters made political history Tuesday by voting to recall a sitting governor for only the second time in U.S. history, and electing a Hollywood megastar to replace him.

Navigating the aftermath of the ouster of Gov. Gray Davis and the ascent of Arnold Schwarzenegger may prove tricky for Democrats, Republicans and Schwarzenegger himself.

Both parties must figure out what the vote means for their prospects in next year's presidential election, and the new governor has to address the problems that doomed the old.

For the moment Wednesday, Schwarzenegger was celebrating his rise from Austrian farm boy to leader of the nation's most populous state. Davis, meanwhile, marked the likely end of a political career that once appeared to have White House potential.

With 97 percent of precincts reporting Wednesday morning, the recall was favored by 4,092,411 voters or 54.3 percent, and opposed by 3,438,424 voters or 45.7 percent.

Among the replacement candidates, Schwarzenegger was ahead with 3,500,184 votes, or 47.9 percent of the vote; Democratic Lt. Gov. Cruz Bustamante had 2,361,466 votes, or 32.3 percent; Republican state Sen. Tom McClintock had 965,095 votes, or 13.2 percent; and Green Party candidate Peter Camejo had 205,861 votes, or 2.8 percent.

Re-elected last year with less than 50 percent of the vote, Davis fell victim to a groundswell of grumbling in a state that has struggled with its perilous financial condition.

"Tonight, the voters did decide it's time for someone else to serve, and I accept their judgment," said Davis, who became the first California governor and the second in the United States ever to be recalled. "I'm calling on everyone…to put the chaos and division of the recall behind us and do what's right for this great state of California."

Barring a legal challenge, Schwarzenegger will be sworn in no later than Nov. 16 to serve out the remaining three years of Davis' term. First the vote must be certified, a process that can take more than a month.

Schwarzenegger, 56, weathered last-minute allegations from 16 women who said he groped them or made unwanted sexual advances, and accusations that as a young man he spoke admiringly of Adolf Hitler.

The action movie hero may find that the hardest part is yet to come.

The former Mr. Universe inherits a state with a projected $8 billion deficit going into next year. Officials only closed a massive $38 billion deficit this year by borrowing billions. Fiscal troubles lowered bond ratings, making that borrowing more expensive.

If he intends to fix state finances, Schwarzenegger only has a truncated term to do it: He would face voters again in November 2006. He scheduled an afternoon press conference Wednesday to discuss the transition.

"We have tough choices ahead," Schwarzenegger said in declaring victory. "The first choice that we must make is the one that will determine our success. Shall we rebuild our state together or shall we fight amongst ourselves, create even deeper divisions and fail the people of California? Well, let me tell you something — the answer is clear. For the people to win, politics as usual must lose."

Schwarzenegger will need to turn in a budget plan by Jan. 10, giving him just a few months to deliver on campaign-trail promises not to raise taxes or cut education spending, which consumes roughly 40 percent of California's budget.

Throughout the campaign, Schwarzenegger refused to say what he would cut and promised to repeal this year's tripling of the state vehicle license fee, although he has not said how he would make up the $4 billion that would cost.

Schwarzenegger must work with Democrats, who are a majority of both houses in the Legislature and hold all statewide offices except his newly won governorship.

Despite the rancorous recall, Bustamante and other Democrats quickly pledged to put partisanship behind them and work with the new governor.

"As I see it, we campaign as partisans but we govern as Californians," said Bustamante, whose term expires in 2006. "I know how to balance a budget and I'm ready to roll up my sleeves and get to work."

For Democrats, Tuesday's vote gave reason to worry. Despite having a 1.29 million-voter edge in registration and bringing in Democratic stars like former President Clinton during the campaign, Bustamante was beaten by almost a two-to-one margin.

While Bustamante took 32 percent, some 61 percent of voters chose a Republican — Schwarzenegger, McClintock or Peter Ueberroth, who quit the race but remained on the ballot. In a state where Democrats have won in the last three presidential elections, the Republicans gained 2.1 million more votes than Bustamante.

Exit polling showed that many Hispanics and union members — two key groups in Davis' past electoral successes — deserted him.

The Democrats' troubles may bolster President Bush's hopes of winning California — and its prized 54 electoral votes — next year.

Even if the president does not win the Golden State, by running a solid campaign there he can force the Democrats to spend time and money defending friendly turf rather than in a battleground state.

But by taking the reins now, Schwarzenegger and the Republican could get the blame if budget troubles persist or worsen, which would hurt the president's 2004 hopes. During the brief recall campaign, the White House expressed cautious support for Schwarzenegger but kept its distance.

Tuesday's results could be a warning shot to both parties, former White House chief of staff Leon Panetta said.

"It's a revolt of people who are increasingly angry at the crises that face them, and at the failure of leadership," Panetta said. "If I were a Republican, I wouldn't get too cocky about what happened."