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In Ongoing Budget Debate, Republicans Oust Their State Senate Leader


California state senators didn't go home last night. They spent the night -- and the early morning -- in-session at the state capitol. But they still haven't been able to pass a spending plan to fix the state's $40 billion deficit. And now there's a new complication: Republicans have ousted their leader. Marianne Russ reports.

Legislative Leaders have been trying to push through a $41 billion package of cuts and tax hikes since Saturday. The plan is still one GOP vote shy of passage in the Senate - and days of arm-twisting haven't worked. An early morning vote on the tax increase measure was unsuccessful - and Senate Leader Darrell Steinberg told lawmakers they would have to stay put until the job was done:

Steinberg: "We're all exhausted and it's just not that much fun, but our minor inconvenience pales in comparison to the pain and the harm that will be done to the people of California if we don't do their business."

Prepared Senators brought sleeping bags, toothbrushes - and even cots. Meantime, the dynamic of budget talks may be changing. In an unusual late-night move, GOP Senators voted out their leader - Dave Cogdill -and chose a new one: Dennis Hollingsworth. Republicans weren't happy that the plan Cogdill negotiated with the Governor and Democrats included tax hikes. Hollingsworth didn't say whether he would insist that leaders go back to the drawing board with budget talks- but he did say this:

Hollingsworth: "I don't want to see a tax increase passed. I think the majority of my caucus doesn't want to see a tax increase passed in this budget package."

Meantime, California's financial troubles continue. The Schwarzenegger Administration sent out thousands of layoff notices, the Controller continues to delay tax refunds and payments to vendors, and hundreds of public works projects are slated to be shut down this week.

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