The deal between Gov. Arnold Schwarzenegger and the Big Five lawmakers to close the state's $19 billion budget gap suffered a setback on Monday, and lawmakers are still struggling to approve a now-three-month overdue budget.
Last week, Schwarzenegger's office said a framework for a deal had been reached, and an agreement could be announced as soon as Monday. But the final details have proved more difficult than expected. Aides say Republican and Democratic lawmakers did work through the weekend, but reported little progress.
Schwarzenegger visited the Commonwealth Club in Santa Clara, where he told the audience it is still be possible for the state to have a deal "in the next week."
The sticking points are Schwarzenegger's demands for tax and budget and pension reforms.
Fiscally, things get a lot worse come Friday, the first day of October. The new month -- and new fiscal quarter -- means commercial lenders can cut off the state's credit card.
Among other things, it also means the Department of Parks and Recreation may not be able to buy restroom and other supplies.
As of early Monday evening, the Big Five lawmakers still had not met. A closed-door session was scheduled for Monday night. Even when the leaders reach agreement, the deal still requires support from two-thirds of lawmakers in both the Senate and Assembly.
