Capitol Alert

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Gov. Arnold Schwarzenegger and Democratic and Republican legislative leaders huddled for about three hours today to hammer out a long-delayed budget deal and bridge a $19 billion deficit.

The only concrete result appeared to be the governor taking off the table a proposal to borrow money from the California Public Employees' Retirement System to balance the budget.

The Big Five will meet again at 11:30 a.m. tomorrow.

"The governor told the leaders that we're not going to do that," said Schwarzenegger spokesman Aaron McLear about the CalPERS idea. "It's just not the responsible thing to do."

Senate President Darrell Steinberg, D-Sacramento, expressed some optimism that legislators could reach a deal by as early as tomorrow.

"We're hopeful to be done tomorrow or the weekend," Steinberg said.

Republican legislative leaders did not speak to press after the meeting.

McLear, however, said Democrat and Republican leaders hadn't made substantial process and blamed legislators for "not doing their job." Schwarzenegger returned yesterday from a six-day trip to Asia 77 days after the legal deadline for passing a budget had passed.

"No major breakthroughs at all," McLear said. "Just kind of working through all the issues."

McLear and Steinberg agreed that the impasse revolved around how much in cuts to make. Steinberg added that the governor needed to first finish collective bargaining agreements with state employee unions.


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