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Schwarzenegger Gets Tough on Deficit

As the nation struggles to come to terms with its own deficit and breathtaking unemployment rates, at least one state is taking matters into its own hands. Governor of California Arnold Schwarzenegger has told state lawmakers he will lay off up to 10,000 government employees if the legislature was unable to pass a suitable budget to counter a staggering deficit and growing unemployment rate, which was at 8.4 percent as early as November, according to the governor's statements. Schwarzenegger on Friday delayed terminating (sorry, we had to use the reference) the government workers and halting the 275 state-funded public works projects underway to give lawmakers a few more days to negotiate. They failed to do so, and now the governor is preparing to make good on his word and send pink slips to 10,000 government workers, according to the Los Angeles Times. The governor and legislature have gone back and forth for months on the state's budget woes and a possible economic stimulus to create jobs and fund infrastructure projects. Lawmakers handed a version of the stimulus to Schwarzenegger in December that he refused to sign. "[W]e had a terrible budget that they sent down to me.... I was very disappointed," he said in a mid-December press conference. "I thought that when we negotiated that we negotiated a very balanced kind of a compromise where we agreed to raise revenues and increase revenues and also make the necessary cuts and also have a very, very strong economic stimulus package...." Even weeks later into 2009, Schwarzenegger publicly expressed faith in the state legislature to negotiate an acceptable budget and an effective stimulus. "Now, it is time for Republicans and for Democrats to put politics once and for all aside and to make the tough choices needed to keep our state from financial disaster that will take years to recover from," he said in early January. "I just want to provide a budget for the people of California so that we can stimulate the economy, create the jobs, make the necessary cuts and create the extra revenues so we can move forward. Because we are now talking about a $42 billion deficit, potential deficit." With the legislature having adjourned with no budget agreement and the deficit still looming over California, the months ahead look likely to continue to challenge Californian residents. It was unclear at the time this story was published when the governor will lay off the promised 10,000 state workers and in what departments the cutbacks will occur. Write to Diana Golobay at diana.golobay@housingwire.com.

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