Arizona Senate President Tim Bee’s (R) announcement Saturday that he will challenge Rep. Gabrielle Giffords (D-Ariz.) in the Grand Canyon State’s Republican-leaning 8th district immediately erases some key advantages the freshman incumbent carried into her successful 2006 Congressional campaign.

The moderate Republican is a better fit for the district than 2006 GOP nominee Randy Graf, enters the 2008 race as a consensus candidate, and has secured the strong backing of Republican Jim Kolbe, the popular former 8th district Congressman. In 2006, Kolbe and his political machine sat on the sidelines and refused to endorse Graf, who entered the general election with little institutional support after winning a divisive September primary.

But Giffords will have significantly more money behind her than Bee, courtesy of her own war chest and those of the Arizona Democratic Party and the Democratic Congressional Campaign Committee. Although most Republicans argue otherwise, it’s not clear that Giffords has — in the eyes of her constituents — acted contrary to her moderate image and committed a fireable offense.

“She’s a pretty good candidate,” said one Republican consultant who followed Giffords’ 2006 campaign. “She was kind of weak on immigration [in 2006.] But I think Tim Bee is a waffler, and I don’t think he’s ready for prime time.”

The 8th district sent Kolbe to Congress for 11 consecutive terms, delivered 53 percent of its vote for President Bush in 2004, and supported Sen. Jon Kyl (R-Ariz.) over Democratic businessman Jim Pederson in 2006.

And with the possibility that Sen. John McCain (Ariz.) might top the 2008 Republican ticket as the presidential nominee, Bee could benefit from a favorable political headwind even if Republicans are still struggling nationally.

Many Republicans, even Bee’s campaign operatives, note that one of the state Senator’s greatest strengths is that he is not Graf.

Graf, a former state legislator who was identified with the illegal immigration issue, was viewed as an extremist by many voters in the 8th district. He waged a failed primary battle against Kolbe in 2004, leading many southern Arizona Republicans to abandon him in favor of Giffords when he won the 2006 GOP primary.

Kolbe, who opted for retirement, pointedly declined to endorse Graf in the general election, saying publicly that to do so would violate his principles. This time around, Kolbe is acting as one of Bee’s honorary campaign chairmen.

However, Republicans — who have long described Bee as their dream candidate to challenge Giffords this cycle — argue that he is well-positioned to beat the Congresswoman because of who he is, rather than who he isn’t.

“The Bee name is gold in Tucson,” said one Republican insider based in Arizona. “He is the ideal candidate to put up against Giffords … She’s not that moderate. I think that will get exposed.”

Republicans contend that Giffords is vulnerable, saying her floor votes on multiple tax and other fiscal issues prove she is far from the pro-business Democrat she campaigned as in 2006. In particular, they say Giffords is in trouble because of her vote in favor of a bill that would allow employees to unionize by checking a public card, rather than voting via secret ballot.

In its effort to unseat Giffords, the Bee campaign signaled Tuesday that it plans to tie Giffords to Speaker Nancy Pelosi (D-Calif.) and the rest of the House Democratic leadership, in an effort to paint her as partisan and too left of center for the district. Bee’s team also might argue that Giffords did not deliver on her promise to change Washington, D.C. — rather, the Republican is going to say, Washington changed her.

“It’s going to be a challenge for us, as any challenger race is,” Bee campaign spokeswoman Meg Econ said. “We feel we have a very good case to make as to why she shouldn’t be given the job again.”

Democrats concede that Bee’s entry into the race means Giffords is in for a fight. But they dispute Republican charges that the Congresswoman has veered left and abandoned moderation for partisanship, predicting that she ultimately will retain her seat.

Bee has chosen to keep his post as state Senate President and in the months ahead will be negotiating with Arizona Gov. Janet Napolitano (D) on how best to close a nearly $1 billion state budget deficit that amounts to around 10 percent of the overall state spending plan.

Democrats believe he will be forced to make some politically tough decisions that will have an adverse effect on his Congressional campaign, and they also contend that the time he spends in Phoenix on state legislative business will distract from his effort to unseat Giffords.

Fundraising, too, could be a problem for Bee, and even Republicans acknowledge he will not be able to match Giffords in campaign spending. Giffords had more than $1.1 million in cash on hand as of Sept. 30, while Bee’s exploratory committee, which just transitioned into full campaign status in the past week, had raised much less — more than $300,000.

Econ declined to reveal how much money Bee has in the bank, although fourth-quarter reports are due at month’s end. Meanwhile, the Democratic Congressional Campaign Committee has far more cash on hand than the National Republican Congressional Committee.

“It’s going to be a expensive race,” said one Democratic strategist based in Washington.

Emily Bittner, a spokeswoman for the Arizona Democratic Party, added that Giffords since she assumed her seat last year has worked hard to develop a bond with her constituents, which would be hard for Bee to break.

“She’s worked tirelessly for her district,” Bittner said. “We think there’s no question that the voters will send her back to Congress.”