Former U.S. Rep. Tom Campbell announced this morning that he is entering the race to unseat U.S. Sen. Barbara Boxer, confirming rumors that have flared this week that he was leaving the California gubernatorial contest.

Calling the nation's fiscal path "suicidal," Campbell said his economic background makes him the ideal candidate to rein in federal spending and growth.

"Our country is at a very perilous point in economic terms, and in terms of the size and intrusiveness of government" he said. "I believe I can help to restore our nation's economic health, and spirit of independence."

Campbell has a doctorate in economics and his faculty advisor was the Nobel Prize-winning economist Milton Friedman. Campbell was also the last person to serve as California's budget director who oversaw a balanced state budget.

Campbell, who represented the Silicon Valley for 11 years in the House of Representatives and the state Senate, acknowledged that he was unable to compete financially in the governor's race, with two rich opponents sinking millions of their personal fortunes into their efforts to win the GOP primary.

"The path of public service and teaching is rewarding, but it does not afford one the ability to invest millions of dollars in a campaign for office," Campbell wrote in an e-mail sent to supporters this morning.

Although his entry into the Senate race will clearly change the contest's dynamics, his prospects in the primary are not necessarily any stronger. He's facing multimillionaire Carly Fiorina, who has lent her campaign $2.5 million, and Assemblyman Chuck DeVore, who is the favorite of the party's most conservative and committed voters.

Campbell is a budget hawk, but his liberal positions on issues such as abortion, guns and gay rights and his support of some tax increases may not sit well with the conservatives who will turn out in the June primary.

Well-liked and affable, Campbell has some name recognition among voters and unveiled an interesting list of endorsements today, including former Los Angeles Mayor Richard Riordan and former U.S. Secretary of State George Shultz. But he has never been elected to statewide office. In the 1992 Senate race, he lost the GOP primary to a more conservative candidate, and in 2000, he won the primary but was crushed by Sen. Dianne Feinstein. [Note: An earlier version of this post misspelled "Shultz" as "Schultz."]

Conventional wisdom holds that Campbell's entry into the Republican primary for Senate will split the moderate vote and Silicon Valley support, benefiting DeVore. But others contend that Campbell will provide a liberal bookend for Fiorina, who can contrast her social positions -- she opposes abortion and voted for Proposition 8, the same-sex marriage ban -- with Campbell's. Fiorina, who has been touting her business experience and trashing career politicians on the stump, can also lump DeVore and Campbell into that category at a time when voters are deeply skeptical of elected officials in Sacramento and Washington.