A year after he took office, following the voters' recall of Democratic Gov. Gray Davis, Arnold Schwarzenegger is riding high in California. A recent Los Angeles Times poll put his job approval rating at 66 percent, and his efforts to break through the political paralysis that had contributed to a serious fiscal crisis in state government have won commendation across the spectrum.

Among those who praise the efforts of the movie-hero-turned-Republican-politician is Leon Panetta, the former California Democratic congressman and Clinton White House chief of staff. With his wife, Sylvia, he now runs an Institute for Public Policy here, whose chosen mission is to convince promising college students that politics can be a means of solving problems -- not just of scoring wins and humiliating opponents.

The other night, after a banquet at which the Panetta Institute honored two senators who often rise above partisanship, retiring Democrat John Breaux of Louisiana and Republican Olympia Snowe of Maine, Panetta talked about Schwarzenegger's first year in Sacramento.

"No question," he said, "he really has made an effort at trying to govern the state. When he came in, he asked George Shultz and me to meet with him and his people, and we said, 'You have to start trying to cut deals, break the gridlock, show people the governmental process can still work.' He is doing it.

"The big decisions are still out there -- especially how to deal with the structural budget deficit. But he has brought in good people from both parties with a lot of experience and credibility to work with him. He knows how to deal with people, and the star power counts for a lot."

Bruce Cain, the University of California at Berkeley authority on state government, is another former skeptic ready to give Schwarzenegger high marks for his first year in public office. "He's done a pretty good job of hopping back and forth between Republicans and Democrats and carving out something worthwhile in the middle," Cain said. "He is a wheeler-dealer of enormous talent, and he's obviously very good at maneuvering public opinion. I don't think we've had anybody in California who could do this."

Schwarzenegger kept one key promise from the recall campaign by rolling back an unpopular increase in vehicle license fees, and he persuaded voters to support a $15 billion bond issue to refinance the state debt. This year Schwarzenegger negotiated his own deals with prison guards, public school teachers and local government officials to avoid the kind of logrolling and lobbying in the Democratic legislature that had inflated budgets to unsustainable levels under Davis.

But despite an improving economy, revenue is still expected to fall short of expenditures by an estimated $8 billion to $10 billion next year in a $103 billion budget. The governor also has work to do on prison reform and Indian gambling, not to mention an energy plan -- another issue that damaged Davis.

With term limits ending the careers of the last battle-tested veterans in the state Senate (the Assembly had been stripped of its experienced members earlier), Cain said the balance of power in Sacramento clearly has shifted from the legislature to the governor's office.

Schwarzenegger is using that power to push for big and long-term restructuring of the economy and the political system. He thwarted Indian tribes' efforts to use the initiative process to cut him out of their quest for expanded gambling. He pushed through a $3 billion initiative to put California in the forefront of stem cell research. Under the threat of a Schwarzenegger-backed voter initiative, the legislature agreed to reform workers' compensation laws. Now the governor is talking about a measure that would take redistricting decisions away from the legislature and give them to a nonpartisan commission.

The latest recruit to the Schwarzenegger administration, in the key post of finance director, is Tom Campbell, a maverick Republican ex-congressman and former law school professor. Campbell is a longtime advocate of an open primary system designed to promote the nomination of moderate Democrats and Republicans, instead of the partisan liberals and conservatives who now dominate the legislature.

All of this is happening with a minimum of bruised feelings -- thanks to Schwarzenegger's skillful touch with the Sacramento pols and their eagerness to stay on good terms with the popular governor and his Kennedy-kin TV-star wife, Maria Shriver.

The "changed climate" that President Bush promised but did not achieve in his first term in Washington is on display in Sacramento.