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SACRAMENTO, California (Reuters) - California Gov. Arnold Schwarzenegger said on Thursday the state "faces insolvency within weeks" and he will put new policies on hold until there is a deal to close the budget gap, which will top $40 billion over the current and next fiscal year.
"It doesn't make any sense to talk about education, infrastructure, water, health care reform and all these things when we have this huge budget deficit," Schwarzenegger said in his annual state of the state speech.
The Republican governor and Democrat-led legislature are at adds over how to fill the current year's budget shortfall and are poised for a struggle to balance the budget for the state's next fiscal year, which begins in July.
"The reality is that our state is incapacitated until we resolve the budget crisis," Schwarzenegger said.
"The truth is that California is in a state of emergency," he added. "Addressing this emergency is the first and greatest thing we must do for the people. The $42 billion deficit is a rock upon our chest and we cannot breathe until we get it off."
Schwarzenegger's speech stood in sharp contrast to his previous state of the state addresses. It was short, blunt and focused on the urgent task of balancing the state's books.
I have been warning about this in post after post and now here we are. My predictions are now coming true, and as I suspected, California will be the first to go:
For 2009, the base budget rose to US$515.4 billion, with a total of US$651.2 billion when emergency discretionary spending and supplemental spending are included. This does not include many military-related items that are outside of the Defense Department budget, such as nuclear weapons research, maintenance and production (~$9.3 billion, which is in the Department of Energy budget), Veterans Affairs (~$33.2 billion) or the wars in Iraq and Afghanistan (which are largely funded through extra-budgetary supplements, ~$170 billion in 2007) - the United States government is currently spending at the rate of approximately $1 trillion per year for all defense-related purposes.
Originally posted by projectvxn
Are there any Californians out there that have a closer view of what is going on? It seems that the MSM is being very quiet as to what this sort of news is suggesting. Why is this not bigger news?