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SAN FRANCISCO (Reuters) - California Gov. Arnold Schwarzenegger on Thursday said he would not sign an $18 billion package of fee hikes and budget cuts passed by the legislature, dealing a mortal blow to the latest plan to narrow a yawning shortfall.

California is one of the largest debt issuers in the United States, but a political stalemate and the wider economic crisis have left it in budget crisis, facing a $42 billion deficit over the next year and a half and the possibility of running out of cash early next year.

"They call it economic stimulus but then there's nothing there," Schwarzenegger said. "The state is in terrible condition," adding that without proper action by legislators, "We are going toward a financial Armageddon."

Schwarzenegger said the package passed by Democrats would punish Californians by raising fees and taxes without making it easier to do business in the state or helping troubled homeowners.

The package has no chance of overcoming a veto, due to Republican opposition in the legislature.

Democrats in both chambers passed the measures by majority votes. Tax hikes require a supermajority, but the legislators used a complicated scheme including a new gasoline fee, which they say required a simple majority.

State Treasurer Bill Locker had urged adoption of the package. "If we throw away an $18 billion solution, under these circumstances, investors will throw up their hands in disgust, and we likely will suffer the humiliation of seeing our credit rating sink even lower," he said in a statement before Schwarzenegger spoke.

Taxpayer groups, meanwhile, had vowed to go to court to stop the package.



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Home arrow Blog arrow Obama Speaks Again to Rice, Gets Briefed on Mumbai Attacks
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Friday, 28 November 2008

Obama Speaks Again to Rice, Gets Briefed on Mumbai Attacks

November 27, 2008 2:11 PM

Chicago -- On Thanksgiving morning, an Obama aide tells ABC News, President-elect Barack Obama spoke by phone with Secretary of State Condoleezza Rice, receiving additional briefings on Wednesday's Mumbai terrorist attacks, which have left over 100 people dead and hundreds more wounded.

Additionally, said the Obama aide, the President-elect received an intelligence briefing on the attacks in the India coastal city.

Along with the updates from Rice, Obama is also getting regular situational updates from the State Department Ops Center and the National Counter Terrorism Center.

"He continues to monitor the situation closely and appreciates the cooperation and information sharing from the Administration," said the aide.

The Thanksgiving conversation marks the second time that Obama and Rice have talked since the coordinated attacks in India's financial capital.

On Wednesday evening, Obama called Rice to get an update on the situation.

The President-elect also called Indian Ambassador Ronan Sen.

According to an Obama aide, the President-elect "conveyed that his thoughts and prayers are with those affected by this tragic situation."

"He said that there is just one president at a time. He also told him that he is monitoring the situation and has been in communication with Secretary Rice."

The Obama Transition Team also established a team to interact with the State Department Ops Center and with the Office of the Director of National Intelligence. 

Amb. Wendy Sherman, an Obama Transition Team aide focused on the State Department, is part of that.

The Bush Administration has, an Obama aide said, "helpfully provided regular updates through several channels."

On Wednesday night, Obama Transition foreign policy aides Denis McDonough and Mark Lippert also briefed the President-elect, who is spending the holiday with 60 family members at his residence in Chicago.

-- Jake Tapper and Matt Jaffe



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Last Updated ( Friday, 28 November 2008 )
 
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