Simon drops out of governor's race

LOS ANGELES, California (CNN) -- Republican Bill Simon, who was a prominent rival to Arnold Schwarzenegger in California's race to recall Gov. Gray Davis, dropped out of the running Saturday.

"I come before you today to announce that I am withdrawing as a candidate for governor," Simon said in a videotaped statement recorded in Sacramento. "I strongly believe the desire of Californians must come before the aspirations of any single candidate. There are too many Republicans in this race and the people of our state simply cannot risk a continuation of the Gray Davis legacy. For these reasons, I think it is wise to step aside."

He did not endorse Schwarzenegger -- or any other candidates -- in his one-minute statement.

Simon lost to Davis in last fall's general elections and was one of 135 candidates seeking to replace him. Simon lost that race to Davis by just 300,000 votes in a state with 1 million more Democratic voters than Republicans.

Voters will decide October 7 whether to recall Davis and, if so, who should replace him in the governor's office. The recall was triggered by voter anger over the state's economic and energy woes.

Simon is a financier -- his investments include backing the family-friendly PaxTV network -- and father of four who once worked in the U.S. Attorney's office headed by former New York Mayor Rudy Giuliani.

Wednesday, businessman Peter Ueberroth, a former baseball commissioner, formally kicked off his Republican campaign, offering an economic plan that focuses on tax amnesty, spending cuts and protecting a voter-imposed cap on property tax rates. (Full story)

A recent budget agreement between Democratic and Republican legislators in Sacramento eliminated a $38 billion deficit through cuts and borrowing, but it created an expected shortfall of at least $8 billion for the next fiscal year.

Meanwhile, on the Democratic side, Lt. Gov. Cruz Bustamante picked up a key endorsement from fellow Democrats Thursday.

California's congressional delegation of 33 House Democrats endorsed Bustamante even as they stressed their opposition to the recall.

Bustamante has been criticized for tossing his hat in the ring, notably by Democratic Sen. Dianne Feinstein, who called Bustamante a hypocrite for first condemning the recall and then deciding to run.

Bustamante said he opposes the recall but that voters need a Democratic alternative if Davis is removed from office.