Schwarzenegger Seeks Deep Budget Cuts

Governor Schwarzenegger is proposing dramatic budget cuts in order to close California's deficit:

This will be the third straight year that Mr. Schwarzenegger has proposed deep spending cuts. Tax revenue in California has plunged because of the collapse of the real-estate and financial markets. Legislators closed a $60 billion budget gap last year, but not before state officials had to issue IOUs to creditors to keep the state solvent.

The Republican governor proposed eliminating a $1.1 billion welfare-to-work program called CalWORKs, as well as reducing spending on health-care and child-care programs.

In all, the governor's spending plan for the 2010-2011 fiscal year calls for $12.4 billion in cuts. He proposed closing the remaining shortfall with federal money and funding shifts.

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