By Daniel Trotta and Basil Katz
NEW YORK (Reuters) - When Democrat Andrew Cuomo becomes New York governor on Saturday he inherits a $10 billion budget deficit, a notoriously corrupt political system and the legacy of his father, the popular former Governor Mario Cuomo.
But if he succeeds, the new job also offers a second chance on the national stage for Cuomo, 53, who became the youngest-ever U.S. secretary of housing and urban development under President Bill Clinton in 1997 but whose signature achievement there backfired.
"The Democratic Party does not have a lot of tall trees out there on the plain. If he is modestly successful on this prairie, he will stand tall, it's not going to take a lot," said Fred Siegel, a senior fellow at the Manhattan Institute think tank.
While at HUD, Cuomo pressured the Federal Housing Administration and housing finance giants Fannie Mae and Freddie Mac to expand home ownership by lowering mortgage standards, policies that opponents say contributed to the housing bubble and resulting financial crisis of 2008.
He was more successful as state attorney general the past four years, when he aggressively investigated institutions such as Bank of America and Lehman Brothers, incurring anger from Wall Street and building his reputation as "Sheriff of Wall Street."
Cuomo takes office in the state capital Albany on New Year's Day with restless public employee unions -- a traditional Democratic base -- concerned about cuts to pension benefits. The state liability to teachers alone is expected to quadruple over the next five years, according to a study by the Empire Center for New York State Policy.
He has promised not to raise property taxes to help close the nearly $10 billion shortfall on a $136 billion budget.
Cuomo's partners for tackling the problems include a legislative branch that has had a litany of lawmakers caught up in ethics investigations.
"It's almost like Barack Obama walking into the presidency with two wars and a deep recession," said Doug Muzzio, a professor of public affairs at New York's Baruch College. "There are so many things wrong it is difficult to figure out how you solve these things or even how you start."
The deep troubles in New York offer an opportunity for redemption and a chance to match the prestige of his father, who was defeated in his quest for a third term as governor in 1994 but remains fondly remembered in Democratic circles.
Mario Cuomo resisted calls to run for president in 1988 and 1992 from Democrats who were out of power and longing for a charismatic leader. Andrew Cuomo could put himself on a short list of presidential hopefuls with a productive governorship.
"Andrew is intensely, intensely political. He wants to succeed where his father failed," Siegel said.
But the governorship also comes with the risk of failure. Cuomo enters office after running unopposed in the Democratic primary and against a Republican rival, Carl Paladino, who was so mistake-prone that Cuomo merely had to avoid controversy.
"If the state government collapses, which is not entirely out of the question, he is not going to move on," said Ken Sherrill, a professor of political science at Hunter College in New York.
The governor also benefits from comparisons to his predecessors.
This could have been the second term for Eliot Spitzer, who entered office four years ago with high promise after serving as attorney general, when he became the original "Sheriff of Wall Street." But Spitzer resigned 14 months after taking office when he was caught patronizing prostitutes.
Lieutenant Governor David Paterson replaced Spitzer and alienated leaders of both parties. He quit a short-lived campaign for governor in disgrace following revelations that he intervened in a domestic abuse case against his chief political aide.
Those failures will not help Cuomo balance the budget, reform Albany or seize control of a government in which power is shared three ways between the governor and the heads of each chamber in the state legislature.
"The budget situation is worse and the state has experienced four years of being adrift," said Lee Miringoff, director of the Marist Poll. "Clearly the same sentiment to shake the system up is there, and probably even more so. It's a very, very daunting situation that the governor-elect finds himself in."
(Editing by Eric Beech)