Lawmakers returned to the state Capitol for their new session. Overshadowing everything is California's budget crisis.
During the winter holidays, Governor Arnold Schwarzenegger negotiated with Democratic legislative leaders. They've tried to reach agreement on a majority vote plan to address nearly half of the state's $41-billion shortfall.
Senate Democratic Leader Darrell Steinberg insists Democrats and the governor are close to a deal.
Steinberg: "These negotiations when you're talking about stakes that are this high are complex and take some time. But I'm patient and I'm persistent and I still believe that we're going to get there. There really is no other choice."
Steinberg says the sticking points include the governor's request to relax environmental laws to help speed up public projects.
Assembly Republican Leader Mike Villines says since no deal has emerged, it's a good time for GOP lawmakers to re-join negotiations.
Villines: "I think we can be helpful. I think us partnering with the Governor and sort of him seeing over the last ten days that it didn't go anywhere increases our position and helps us get to a final solution."
On New Year's Eve, Schwarzenegger's finance director unveiled the governor's budget plan to cover the next 18 months. It includes billions in cuts to education and social services as well as billions in proposed tax hikes.
