Senator Eliot Shapleigh - El Paso, Texas

AUSTIN – In creating a committee Thursday to explore a run for governor, Sen. Kay Bailey Hutchison sent her strongest signal yet that she's ready for a showdown against Gov. Rick Perry that would cost millions and sharply divide the Texas GOP.

Ms. Hutchison has considered running for governor before but always backed away. This time, by launching the committee, she has cleared the way to open a campaign office and raise money for the race.

Although the Republican primary is 15 months away, the contours of the race have already emerged – Mr. Perry casting her as part of the problem in Washington and Ms. Hutchison labeling him a divisive, ineffective leader in Austin.

"As any person watching the last legislative session could see, it was very contentious and acrimonious," she said. "Certainly Texas is looking for change in that office."

Mr. Perry, who has repeatedly said he will seek re-election, fired back through a spokesman by suggesting that the Republican senator has spent too much time outside Texas.

"There hasn't been much good coming out of Washington – record deficits, bailouts, spending," said Mark Miner.

Scramble in GOP

The intraparty feud signals a fractious scramble for Republican campaign money, leaving some donors with a difficult choice of where to place their bets. And the candidates will be positioning themselves on the conservative side of most issues.

Republican consultant Royal Masset said Mr. Perry will target Ms. Hutchison's votes in Washington on federal spending to undermine her fiscal credentials among GOP conservatives who traditionally dominate the party primary.

Moreover, he said, religious conservatives at the heart of the GOP base have traditionally been wary of Ms. Hutchison for her support of abortion rights and stem-cell research.

Mr. Masset said Ms. Hutchison will pitch herself as a conciliator with appeal to centrist voters, including independents and suburban women.

The filing of papers for an exploratory committee does not constitute a formal announcement as a candidate. That announcement would come next year, when she might resign her Senate seat.

On Thursday, she said she had not made a decision whether to resign.

"If I should quit, I would not intend to resign before the end of next year," she said, scotching rumors that she might resign as early as June to focus attention on the governor's race.

According to Ms. Hutchison's allies, she believes that Mr. Perry, who won re-election two years ago with 39 percent of the vote in a four-candidate field, is unpopular among Texas voters and politically vulnerable.

Difficult fundraising

Republicans hold every statewide office in Texas, which means that the winner of the GOP primary would be favored to win the Governor's Mansion. Among Democrats mentioned as potential nominees is Houston Mayor Bill White.

The race could cost each Republican candidate $25 million to $30 million and would present both with a difficult task of soliciting money from many of the same Republican-friendly donors.

Mr. Perry had $2.9 million in the bank at the end of July, the last time he was required to report his contributions. Under state law, Mr. Perry must stop raising money Dec. 13 through the upcoming legislative session in June.

Ms. Hutchison is not affected by that fundraising moratorium, which applies only to state officeholders. She had $8.6 million in her federal account as of Sept. 30 – virtually all of which can be used in a governor's race – and could actively raise money early next year while Mr. Perry is banned from fundraising.

Popular with voters

In polls, Texans consistently name Ms. Hutchison the state's most popular political figure. Mr. Perry has lower approval ratings but is strong with the Republican political base.

Two years ago, Ms. Hutchison abandoned a possible challenge after the Perry team launched early attacks signaling that the contest would be a hard-fought, fractious affair.

Ms. Hutchison said she was not scared off two years ago but merely decided the state was better off if she stayed in the Senate. And she added that a vigorous campaign won't intimidate her this time, either.

"The governor has run very mean campaigns in the past. I assume he will do so again," she said. "I will defend myself."

Mr. Perry has served as governor since late 2000, when he succeeded George W. Bush. He'll soon be the longest-serving governor in state history, something Hutchison advisers believe is a liability among Texas voters used to governors who don't stay long in office.

Bailout support

While Hutchison forces see the national mood as weary of polarization and desiring bipartisanship, Mr. Perry's political team believes the senator's support of a $700 billion federal rescue of Wall Street is not popular among Texas voters.

Mr. Miner has begun calling Ms. Hutchison "Kay Bailout," and the Perry campaign says its polls show that nearly three-quarters of GOP primary voters oppose the bailout.

On the day Congress voted for the economic bailout, Mr. Perry issued a statement urging action, then criticized the bailout after Ms. Hutchison voted for it.

On Tuesday, Mr. Perry joined fellow governors in Philadelphia in a meeting with President-elect Barack Obama, where the Texas governor declared his opposition to all federal bailouts and chided Washington.

Mr. Perry noted that while most states face big budget deficits, Texas is running a surplus – and cited tax cuts and limited spending under his administration.

Ms. Hutchison appeared to acknowledge the state's lean fiscal policies but complained that the Perry administration has failed citizens.

"Texas deserve a governor who, in the context of sound budgetary policies and low taxes, works for quality schools and universities, access to health care for our families, communities safe from crime and drugs, protection of private property rights, safe transportation and a government that listens and responds to them," she said.