Two days after last year's recall election, having just vanquished Gray Davis by pledging to clean house in Sacramento, Arnold Schwarzenegger visited the capital city for the first time as governor-elect. The man who had campaigned as the ultimate outsider, the "people's candidate," swooped into town aboard his private jet to attend a party thrown by one of Sacramento's consummate insiders - his campaign chief Bob White - in honor of a longtime lobbyist who was dying of cancer.

The guest list was dotted with the leading names in California politics, including Willie Brown, the former Assembly speaker then serving his last days as mayor of San Francisco, and John Burton, the profane, irascible and unabashedly liberal Democratic leader of the state Senate. Atty. Gen. Bill Lockyer, expected to be a Democratic candidate for governor in 2006, cuddled his infant in his arms, fending off attempts by others who asked if they could hold the child.

As the evening wore on, two lobbyists approached Schwarzenegger and introduced themselves, half-jokingly, as the personification of the special interests he had promised to sweep from the halls of the Capitol, a campaign pledge he sometimes made with a broom as a prop to rile up his already agitated rally crowds.

"Oh!" Schwarzenegger said to the lobbyists, throwing one of his massive arms around each man's shoulders. "I was only kidding! I like you guys already."

Perhaps Schwarzenegger was just being polite. But in the weeks and months that followed, the new governor has demonstrated a mastery of the political game as if he had been playing it all his life. His first six months as chief executive - which end Monday - have been not so much the dawn of a new era as the return of an old one, reminiscent of a time when California's political leaders clashed over policy in the Capitol while maintaining a civil or even friendly camaraderie at the negotiating table and away from it.

As governor, Schwarzenegger has laid out a clear agenda and then moved decisively to enact it. Displaying the focus of a turn-around specialist brought in to rescue a troubled company, he has impressed California voters as a man of action who can get things done. The surprise is that he is doing it not so much with confrontation as with conciliation.

While from afar the novice governor appears to be taking the Capitol by storm, rolling over the opposition at every turn, the truth is more complex. He has combined dramatic deeds on things he can do by himself with well-disguised compromises on things he cannot accomplish alone, hurling harsh criticism at members of the Legislature one minute and then horse-trading behind closed doors with them the next.

Then, employing marketing skills honed during careers in body-building and acting, he has packaged the result as a triumph for his agenda, glossing over uncomfortable details while selling the public on the idea of his own success, a message that has made him still more popular and thus even more powerful. Schwarzenegger, in short, has become a political self-fulfilling prophecy.

"He's a real good salesman," says Joel Fox, an anti-tax activist and informal advisor to the governor. "He understands how things work. And he's a good salesman for his product and his ideas."

Former Assembly Speaker Herb Wesson agrees.

"He understands timing," Wesson said. "He knows how to seize the moment and he knows how to market things."

He also understands people, and human nature. While Davis was a loner who had few friends inside or outside the Capitol, Schwarzenegger is a social butterfly who loves being around others. He meets regularly with the legislative leadership and even rank-and-file members. There are Democrats in the Legislature, for example, who have visited the governor's office more in Schwarzenegger's first five months than they did in the five years that Davis held the job. And the personal ties he is building with others have come in handy during difficult negotiations.

He grasps the little things. Burton, the powerful Senate leader, was a constant irritant to Davis, his fellow Democrat, but he gets along great with Schwarzenegger. This is no accident. The new governor has cultivated him from his first visit to the Capitol, showering Burton with small gifts of friendship, flowers on his birthday and kind words about his leadership.

Now Burton, who couldn't stand spending time with Davis, is in the governor's first-floor suite of offices so often that aides who work there watch what they say for fear that the senator might be sneaking up behind them. Sharing a love for espresso with the Austrian-born chief executive, Burton recently bought his own machine for his office upstairs and has been seen shuttling a stainless steel carafe of steamed milk into the governor's office so he can top off Schwarzenegger's drink with a foamy flourish.

The typically tough-minded Burton has acknowledged that he enjoys working with Schwarzenegger, in part because the governor has extended himself to work with the Legislature, to the point of sometimes visiting members in their offices rather than demanding that they come to see him. Such modest gestures go a long way in a place steeped in symbolism.

"I don't remember the last time a governor would come up to the second floor to talk to the leader of another party," Burton said recently.

The diminutive Wesson had a running gag with Schwarzenegger about their relative height, with Wesson once pulling out a measuring tape in an attempt to assess just how tall (or short) the governor was. Schwarzenegger retaliated by placing a pillow on Wesson's chair before a negotiating session in his office.

"He laughs, he jokes, he talks about his family and your family," Wesson said. "He is the kind of person you could sit around a kitchen table with and just chat."

The governor has been equally open in his choice of advisers. He deliberately surrounds himself with people from different, sometimes contradictory points of view, to a degree greater than any recent chief executive. This first came to public notice during the campaign, when investor Warren Buffett was brought on to advise the candidate on economic issues and promptly proposed repealing Proposition 13, the state limit on property taxes. Schwarzenegger distanced himself from his friend's comments but kept him on board and has consulted him since becoming governor. But what gets less attention is that Schwarzenegger also relies on George Shultz, the former U.S. treasury secretary and secretary of state who is a respected conservative economist and opponent of higher taxes.

During the transition, the governor-elect brought in a Republican, former Gov. Pete Wilson, and a Democrat, former Assembly Speaker Robert Hertzberg, to advise him on fixing the state's fiscal mess, having them exchange views in a series of luncheon debates. He hired a mainstream Republican, Patricia Clarey, as his chief of staff and then named a liberal Democrat, Bonnie Reiss, as his senior adviser. He chose an environmental activist - Terry Tamminen - as his secretary for Environmental Protection and then paired him with a deputy - James Branham - who came from the Pacific Lumber Co.

This sort of personal, political and policy synergy has given his administration the kind of unpredictability that has always been part of the Schwarzenegger persona. He likes to keep people guessing, off-balance, wondering what his next move will be.

To this he has added a determination to constantly move forward, using achievements large and small to build momentum for what he has planned around the next corner. While he has concentrated public and political attention on one priority at a time, Schwarzenegger has done so while keeping in mind that each victory, no matter how small or how it was achieved, could lead to another.

And so he began his tenure by immediately following through with campaign promises to rescind an increase in the car tax, freeze state hiring and call a special session of the Legislature to demand repeal of an unpopular bill that would have allowed illegal immigrants to obtain driver's licenses. To these he quickly added an executive order suspending all pending state regulations, and before long a list of proposals for mid-year reductions in state spending. The fast start began to cement in the public's mind the image of a man committed to making change.

Then he faced a moment of truth. Just three weeks into his term, Schwarzenegger demanded that lawmakers place on the ballot a $15 billion bond measure and a strict cap on the growth in state spending. He needed the bond measure to ease his way back to a balanced budget without a tax increase, and to protect against the possibility that billions in borrowing set in motion by Davis might be struck down by the courts, which would have left Schwarzenegger with no choice but to raise taxes and cut more deeply into programs than almost anybody in the Capitol was willing to do. And he wanted the spending limit so he could promise voters that the borrowing he was proposing would not be repeated.

Democrats in the Legislature were willing to give him the bond measure, but not the spending limit he proposed. On Dec. 5, the deadline Schwarzenegger had set for action on the package, the Legislature rejected his plan, and he was forced to decide whether to carry out his threat to take his fiscal recovery plan to the ballot himself.

But that weekend, the new governor backed down and returned to the negotiating table. A few days later, he accepted a Democrat-drafted alternative to his spending limit, calling for a larger state budget reserve but little else of substance. His concessions infuriated Republicans, but he got the votes he needed, and a week later, Schwarzenegger celebrated the bipartisan approval of the package as the first step on the road to returning California to fiscal health.

Had Schwarzenegger taken the other path, toward confrontation, the first months of his administration would have been entirely different. He would have been in a partisan war with the Democrats who control the Legislature and the interest groups with which they are allied, and he would have had to gather signatures for a ballot fight that would have put everything on the line in a special election in early spring. That's exactly what his most conservative allies were pushing him to do, hoping to capitalize from the turmoil and perhaps enact quick and fundamental change in state policy.

"If he had gone to the ballot he would have got the spending limit, and the Democrats wouldn't have been happy, but they wouldn't have wanted to take that risk again," said Republican Assemblyman Ray Haynes, who generally gives the governor high marks. "Politics is not about everybody loving each other. The essence of politics is win or lose. It's not business, where in order to make a deal both sides have to win."

But that was exactly the attitude Schwarzenegger decided he wanted to change. Voters might have thought they elected a movie action hero to kick some tail in the Capitol. But the governor they got, while talking like a dictator, was acting more like a dealmaker.

His first big deal, though, still needed voter approval, and early polls showed the bond measure trailing badly. So Schwarzenegger made it a referendum on his leadership, telling voters clearly that these were the first steps in the plan he had promised to enact during the campaign. And he turned it into a bipartisan love fest. He enlisted help from across the political and interest-group spectrum (getting even Davis to endorse the package), and won going away. And while his victory owed much to the cooperation of Democrats, it strengthened him considerably for his next confrontation with the majority party: workers compensation.

Schwarzenegger had done something during his campaign that few would have thought possible, making the state's expensive and cumbersome system for compensating injured workers into a subject of household discussion. Now he had to make good on his promise to fix that system, and he used an ingenious two-track approach. First he endorsed a far-reaching ballot initiative that he knew Democrats could never accept, and he helped raise $5 million to gather the signatures needed to place it on the ballot. Then he started negotiating with lawmakers on a less ambitious alternative.

After weeks of talks, more threats from Schwarzenegger and several failed deadlines, the governor emerged with another compromise. He gave up important elements in the initiative, including proposals to allow compensation only for injuries caused predominantly by the workplace and to deny injured workers their choice of doctors. But he won crucial changes that are expected to shave at least 15 percent, and perhaps more, from the cost of the system.

"The workers compensation reform was far more comprehensive than anything I thought would be possible from this Legislature," said Republican Sen. Tom McClintock, who opposed Schwarzenegger in the election last fall and has not been afraid to criticize him. "It obviously didn't go as far as I think it should, or as far as what the people would have approved. But as a legislative victory it was stunning, given what he had to work with."

Now Schwarzenegger has turned his attention back to the budget, which, despite passage of his bond measure, is still projected to be $15 billion out of balance in the coming year unless big changes are made. To start closing that gap, he has negotiated a series of deals with interest groups, from teachers unions to local governments, to accept big cuts in the next year or two coupled with promises for greater, or at least more stable, funding later.

The agreements won't completely solve the problem that, as a candidate, he suggested could be fixed almost overnight. Instead, Schwarzenegger has once again turned more realistic than his rhetoric, mapping out the fuzzy outlines of a three-year plan to return the budget to balance as the economy improves. His strategy represents a major fiscal gamble, and contains elements similar to the budgets that got Davis into so much trouble. But it might work.

In the meantime, Schwarzenegger is likely to bask in the political glow, and voter approval, that comes from getting a budget done on time, without raising taxes. And that, in turn, will strengthen him for whatever battles lay ahead.

Assemblyman Darrell Steinberg, a Sacramento Democrat who has worked closely with Schwarzenegger despite sharp differences on some issues, marvels at the governor's ability to make modest achievements appear to be major milestones, turning each small victory into momentum for the next. The lawmaker thinks this is the secret to understanding Schwarzenegger's governing strategy.

"Nothing," Steinberg said, "succeeds like success."