For Californians who read political tea leaves, some signs are starting to emerge: A few months ago, the Republican was on the campaign trail for presidential candidate John McCain, lambasting Barack Obama as a guy with "skinny legs," "scrawny little arms" and socialist ideas. On Thursday, there he was standing next to President Obama - hugging him and praising him as the nation's economic savior and reformer.
The governor regularly dismisses talk of another political run - specifically for U.S. Senate - as something he's just not interested in, but recently he appeared to soften his words.
Asked by a Chronicle reporter at a Commonwealth Club of California appearance this month whether he ruled out a U.S. Senate run, the governor wasn't definitive - and deftly sidestepped the question.
"I have my hands full with all the stuff I'm doing now," he said, referring to his campaign to pass a package of budget-related propositions that are on a special-election May 19 ballot. "I'm concentrating on that and not what I'm going to do next," he said.
"You know," he added, as he signed autographs, "I'm not a politician. I'm a public servant."
Still, he has plunged with gusto into a new round of campaigning up and down the state to push the measures, and has now landed encouragement from some very powerful allies - like the popular Democratic president.
With a year until primaries begin for the 2010 elections - and an energetic crowd of Republicans and Democrats already preparing to replace Schwarzenegger in the governor's seat - political observers say the latest developments have tripped off a new round in the guessing game of what his next step may be. Another political campaign, a move into the Obama administration, or something entirely new?
'He really wants legacy'
"I do think he really wants legacy and that may be his sole and continued focus," said Barbara O'Connor, professor of political communication at Cal State Sacramento. "And that's contingent on passing the (reform) propositions, on getting health care reform, on getting a water deal and blowing up the boxes. And he's moving on all those fronts."
Though his poll numbers have been down of late, she said, he managed to get Obama's public encouragement - not a bad move.
"The governor is his own best salesperson on the road, and the endorsement of a wildly popular new president is critical with those new voters and netroots set," she said. "It's a match made in heaven."
Democratic strategist Garry South argues there's something more. He has already predicted that California's 2010 Senate race would be a contest between "a muscleman and a boxer," a reference to Schwarzenegger and Democratic incumbent U.S. Sen. Barbara Boxer.
He says last week's developments - Schwarzenegger's lovefest with Obama - only underscores the possibility.
"He needs money. The state's in perilous financial condition and the federal government has money to give out," he said. But clearly, Schwarzenegger "is someone who likes public office, and is probably not looking at himself as someone who will just be a retired governor."
Because he was born in Austria, "he can't run for president and vice president, and the only option is U.S. Senate," he said.
South argues that "there's going to be a lot of national pressure from Republicans on Schwarzenegger to run against Boxer," precisely because such a race would present a windfall of advantages for the GOP.
"He has 100 percent name ID, he can raise a substantial amount of money - even at the federal limit - and it gives the Republicans at least a fighting chance of capturing a Senate seat in California, which they haven't had since 1992," he said.
Diverting cash to California
A Schwarzenegger candidacy would also be another headache to Democrats: By putting Boxer under assault, "the party would have to divert a lot of national money into California, which is an expensive state. And every dollar it spends in California is a dollar that cannot be spent in other places up for grabs, like Ohio."
Conservative Republican activist Mike Spence says it's not a likely match-up. The state GOP grass roots have been fired up at the governor's recent budget, which included a tax increase of $12 billion. They're hardly ready to get behind a Schwarzenegger Senate run, not with "real conservatives" like Irvine Assemblyman Chuck DeVore and former Hewlett-Packard CEO Carly Fiorina exploring the race, he said.
"I am sure he would love to find some department where he can grow, govern and stay in the public eye - and that's a perfect stint in the Obama administration," he said, but Republicans see him as guilty of "political theater ... which is not working to solve our problems."
But GOP strategist Rob Stutzman, who was Schwarzenegger's press spokesman during the famed California recall, said that one of the governor's enduring traits is an uncanny instinct for surprises.
"He went where the cameras were yesterday, which is not a bad idea tactically when you're trying to get a message out to the public," he said of Schwarzenegger's appearance Thursday alongside Obama at a Los Angeles town-hall meeting. Voters may find it attractive that "he can be magnanimous to either side of the aisle, depending on who he's with."
Won't rule anything out
Stutzman said many believe Schwarzenegger will never be a good fit with the often ponderous role as a legislator in Washington - one of a cast of 100 in the U.S. Senate.
But no one can ever predict what cliffhanger he'll be starring in next.
"The great thing about Arnold is he doesn't rule anything out - even in his own mind - until it's game time," Stutzman said.
This article appeared on page A - 1 of the San Francisco Chronicle