Poor Gray Davis. California’s constitutional deadline to pass a new budget came and went over the weekend, and there our embattled governor was, alone in the state Capitol with no legislators in sight, contemplating not success but disaster in the form of the seeming collapse of his budget strategy, a fast-moving recall signature drive and the looming prospect of the Terminator running against him.

Just a few weeks ago, a mega-deal seemed in the works, giving Davis and California a timely budget and giving some Republican legislators and the corporate community reforms of the malfunctioning workers’-compensation system and restrictions on lawsuits. But that all changed when Senate Republican leader Jim Brulte declared that he would punish any Republicans who voted for a tax increase by going all-out to defeat them in a Republican primary.

It was surprising because Brulte has a relatively moderate reputation, playing to reporters with off-the-record jests distancing himself from his party’s more caveman tendencies. Yet there he was, scuttling a brewing budget deal by drawing a cavemanesque line in the sand on taxes that the business community did not. On the other hand, it’s a sound strategy for Republicans because the more trouble Davis has getting a credible budget, the less likely it is that his anemic 21 percent approval rating goes up and the more likely it is that the voters fire him.

It’s probable that the White House played a role in Brulte’s hard-line approach on taxes. The Weekly has learned that Brulte has been consulting with White House political guru Karl Rove on the Davis recall, which Brulte does not deny. One of the sophisticated overseers of the state’s frequently fractious Republican Party, Brulte had shied from the recall movement, but his move on tax policy is the most aggressive step yet by a Republican establishment leader to destabilize the Davis administration. Bush’s chief campaign counsel, Ben Ginsberg, the Florida recount strategist, has already joined the recall effort. Brulte’s move to block the budget deal was only the most dramatic sign of high-level Republican involvement in what for months had been a marginal effort.

Add to all this the increasing likelihood of action-movie star Arnold Schwarzenegger’s candidacy and more recall funding from car-alarm magnate–turned–Congressman Darrell Issa, himself a gubernatorial candidate, and you see that big R Republicans are on the move to ice Gray.

Small wonder that a Davis adviser said of the budget impasse, “We need a Willie Brown” to make the necessary deals in the Legislature and deliver a badly needed success. But the legendary Assembly speaker and Davis ally is off in San Francisco, serving out his term as mayor. Although at least one Republican assemblyman is working to compromise with Democrats, Brulte’s threat makes it difficult for Davis to get the eight Republican votes he needs in the Legislature, and a bipartisan working group has fallen apart after months of effort. The state just borrowed $11 billion from Wall Street to tide itself over, but the cash runs out by August, so some semblance of a budget may yet be in the offing. Whether it passes the smell test of disgusted voters in a recall election is another matter.

In another ominous sign for Davis, the superrich moderate Schwarzenegger took time out last week from the run-up to the July 2 launch of Terminator 3 to be the featured speaker at the Silver Anniversary Gala of Proposition 13 in Century City. There he spoke of “another revolution in California politics,” gibing at Davis by saying it was embarrassing to admit he couldn’t remember the governor’s name, “but I’m sure you will help me recall him.”

Later, pressed on the actor’s plans, his political consigliere George Gorton, Pete Wilson’s and Boris Yeltsin’s former campaign manager, called it “just another day in the life.” But one highly placed Republican reports that Gorton is passing the word that Schwarzenegger, the only actor to make both the American Film Institute’s lists of top heroes and villains, will run.

Indeed, his friend former L.A. Mayor Dick Riordan endorsed Schwarzenegger Friday on Fox News. He also put a shiv into recall champion Issa, saying, “Wouldn’t it be ironic to have an Arab as governor?” before giving him pro forma praise.

The Weekly wanted to ask Davis about Schwarzenegger’s pointed recall joke after Davis gave a rare public speech — he is only now starting to talk in public about his budget — last week to the L.A. Chamber of Commerce (the chamber backs tax hikes), but the governor evaded waiting reporters by slipping down a back fire escape.

Democrats are starting to treat Schwarzenegger as a candidate, trying to start a right-wing backfire against him by sending material on his support for gay adoptions to conservative radio stations.

Issa wants to start a right-wing fire of his own, signing up noted conservative strategist Ken Kachigian and media consultant Larry McCarthy, maestro of the notorious “Willie Horton” ad that fatally damaged Michael Dukakis’ 1988 presidential campaign, preparing to begin TV ads and calling for a special Republican convention to unite around one candidate, namely him.

His candidacy may or may not catch fire, but his recall drive certainly has. Coordinator David Gilliard says 800,000 signatures have been gathered (900,000 valid ones are needed, with 300,000 more to be sure). Issa has increased the payment for signature gatherers from 75 cents to a dollar a signature, and a second million-piece mailing to conservative households is under way.

None of this is getting California a budget that works for the long haul, but it sure is great theater and will only get better. Or worse.

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