Democrats Throw In Towel On Quick Budget Fix With Governor

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(Sacramento, CA)
Tuesday, January 6, 2009

Last month Democrats pushed a package of cuts and tax hikes through the legislature – without GOP votes.  It would have reduced the state’s 40 billion dollar deficit by 18 billion dollars.  But the Governor threatened to veto the package.  He wanted deeper cuts and changes to environmental law aimed at getting public works projects going more quickly.  So the leaders held off on sending the package to the Governor in the hopes of working out a deal….until now.  Democratic leaders say negotiations with Schwarzenegger throughout the holidays were promising…but that’s changed:

“I am perplexed.”

Democratic Senate Leader Darrel Steinberg says they’ve moved closer to the Governor’s requests – but Schwarzenegger has changed his demands:

“He appears to be shutting down.  Put simply, the Governor appears to be getting cold feet around the only solution with the required number of votes to make a difference.”

Schwarzenegger Press Secretary Aaron McLear says that’s not true. He says Democrats haven’t moved enough in the Governor’s direction:

“What we have in front of us though, is exactly what we passed a few weeks back, and what they passed a few weeks back, the Governor couldn’t support because it did not have real cuts and did not put people back to work.”

McLear says the Governor would prefer a budget solution that includes Republican support….but he’s willing to work with a Democrat-only plan, if it meets his demands.  Meantime, anti-tax groups and Republican lawmakers have filed suit to block the Democrats’ proposal.  They claim it’s illegal because it raises taxes without G-O-P votes.  The State Controller has warned that California may have to start issuing I-O-U’s instead of checks as early as next month because of a cash shortage.