Economy, immigration drive California governor race

Meg Whitman, Republican candidate for Governor of California, listens to a question during a campaign appearance at a concrete company in Redwood City, California May 28, 2010.

REDWOOD CITY, California (Reuters) - California's dismal economy and fears the nation's largest population of illegal immigrants are stealing scarce jobs are dominating a suddenly tight race for the Republican nomination for governor.

With a week and a half to go before the primary election, billionaire front-runner Meg Whitman, the former chief executive of eBay Inc, is betting that her focused agenda of creating jobs, cutting government spending and "fixing" education in the most populous state will assure a victory.

But self-described "underdog" candidate Steve Poizner, the insurance commissioner and former Silicon Valley entrepreneur, has seized on illegal immigration as a way to draw a clear line between himself and Whitman.

A surge in support for Poizner earlier in the month has turned what seemed to be inevitable victory for Whitman into a possible come-from-behind win for Poizner.

The victor of the June 8 primary will face off against Jerry Brown, the current attorney general and former governor who has sewn up the Democratic nomination by scaring off major rivals. He has hung back so far, allowing Poizner and Whitman to bloody each other.

Moderate Republican Governor Arnold Schwarzenegger is barred by term limits from seeking re-election. His 6 1/2-year tenure has been marked by battles over spending with the Democratic-controlled Legislature as the economy deteriorated.

Whitman has spent about $80 million and Poizner about $25 million, funded mostly by their private bank accounts, in a nasty contest to prove themselves fiscal and social conservatives. The contest left some voters confused.

Jobs was the key theme at dueling rallies by the Republicans on Friday about 3 miles apart in Silicon Valley, where each made a fortune before deciding to give politics a try.

Voters described Whitman as "commanding" with a more comprehensive plan and Poizner as "down home" with a clearer focus on immigration.

NO-LONGER-GOLDEN STATE

"Did anyone ever think California would have the third-largest unemployment rate in the country?" Whitman asked workers at a concrete plant.

State unemployment is at a modern high of 12.6 percent, a housing rebound seemed to fade in April, and every day is adding to the state's $20 billion budget deficit.

"I know we can make the Golden State golden again," she said, arguing that what was needed was focus rather than trying to "boil the ocean."

Whitman and Poizner both want to cut spending and taxes, improve education and address illegal immigration, but Poizner told reporters that immigration would be key to the last two weeks of campaigning. Many in the audiences echoed his words.

Poizner has embraced a controversial Arizona law that requires police to determine the immigration status of people they reasonably suspect are in the country illegally. Whitman has opposed it but said she would defend the border.

"She has three major objectives," Poizner told reporters before his event. "Illegal immigration is not one of them."

Whitman's strategy of ignoring immigration did not deter Julie Giannotta, a self-described ultraconservative who left the Whitman rally at a concrete plant feeling hope.

"Amnesty is contrary to job creation," Giannotta said, and so Whitman must oppose it, she reasoned. "I hope she is the real deal."

Contractor Erin Lucien, who attended both events, said immigration was top of his mind and he now favored Poizner.

"On a Friday afternoon I should be working, but what's out there is going to illegal aliens," he said.

(Editing by Peter Cooney)