In his initial budget, Governor Schwarzenegger proposed cuts to CalWorks for those moving from welfare to work.  Now he also wants to suspend cost of living increases for aid to the elderly and disabled.   Schwarzenegger says much of the budget is tied up with mandates and spending formulas, so there are few places to look for savings. 

 “I’m not happy about doing it. I wish we could fund all of those programs let me tell you. I think a lot of people deserve this money,  but I have an obligation  which is I promised the people of California that I would bring down the structural deficit to zero.”

Under his revised budget, the state would spend one-point-four billion more than it takes in.  In January, the Governor had eliminated that deficit.

Schwarzenegger is also proposing selling the state agency that guarantees student loans to bring in about a billion dollars.  The Governor releases a “revised” budget in May after state tax receipts come in.