After a long day of talks yesterday, the four legislative leaders and the Governor emerged from Schwarzenegger’s office together, smiling.

 “All these weeks and the last few hours, it was like a suspense movie.”

But there’s no Hollywood happy ending here.  The budget deal includes more than 15 billion dollars in cuts to schools, welfare programs and prisons. It also relies on about four billion dollars from local governments.  Some of that would be paid back – some would not…and that’s expected to prompt a legal challenge.  Democratic Assembly Speaker Karen Bass says it’s a hard pill to swallow:

"Many of the cuts that we had to make, in another time we would have thought were unthinkable, but because of the unprecedented and ongoing recession that’s plaguing our nation and our state, we certainly did not feel we had a choice.”

A major sticking point for the deal was education….and the plan includes six billion in cuts to schools and nearly three billion cuts to higher education.  However, it also calls for supplemental payments to schools in the future – something Democrats pushed for.

“I’m reminded of what I was taught growing up.  Never, ever give up.”

Democratic Senate Leader Darrell Steinberg:

 “I am proud of the fact that in the worst economic crisis in California history, that we held together California’s safety net.”

Under the Governor’s plan several welfare programs would have been eliminated; instead they’re facing reductions. The spending plan agreed to yesterday avoids the deep cuts proposed to state parks – though some are still expected to close.   It also includes the Governor’s measures aimed at eliminating fraud in the state’s in-home supportive services program, such as background checks and fingerprinting. Republicans are applauding the changes – and the fact that there are no new taxes in the spending plan.  Despite the deal, Assembly GOP Leader Sam Blakeslee points out this isn’t the end of the budget crisis:

“There will be more work to be done in the coming year.  The recession is not over.  But this was the right step to take today and I’m glad to work together with my partners here to make sure that we remain fiscally solvent.”