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With the Clock Ticking Governor Rejects Democratic Budget

Governor Arnold Schwarzenegger is soundly rejecting a sweeping package of tax increases and spending cuts put forth by Democratic lawmakers. They approved measures Thursday by simple majority votes to

With the Clock Ticking Governor Rejects Democratic Budget

Governor Arnold Schwarzenegger is soundly rejecting a sweeping package of tax increases and spending cuts put forth by Democratic lawmakers. They approved measures yesterday/Thursday by simple majority votes to address part of the state's nearly $42-billion budget shortfall. Jenny O'Mara reports.

Governor Schwarzenegger called the Democrats' plan a 34e "terrible budget". He says their $18-billion package of tax increases and spending cuts only hurt the people of California. He urged lawmakers to keep at it.

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Schwarzenegger:  "I don't think that anyone should go and celebrate Christmas. None of the legislators, and have people out there suffering. I think the legislature owes it to the legislature to solve this problem before Christmas…"

Schwarzenegger says he wanted more in the way of economic stimulus proposals-including help for those in danger of foreclosure. Democrats say their plan is a dent in the state's problem-and the only one with any votes.

Republican lawmakers had denounced the move to raise taxes as illegal-and were preparing to fight it in court. The State Controller has warned California could run out of cash as early as February.