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Budget Standoff Continues as Senate Republicans Oust Leader

The Senate is in lockdown to achieve consensus on a $42 billion quick fix, but passage is far from certain.

With insolvency looming, the state Senate convened an around-the-clock lockdown Tuesday in an effort to close California’s $42 billion budget shortfall. Passage of a plan has been stalled since Saturday by the need to secure a single Republican vote for more than $14 billion in new taxes.

Late Tuesday, the drama deepened. The Los Angeles Times reported that a group of Senate Republicans, unhappy with the tax hikes that Senate Minority Leader Dave Cogdill, R-Modesto, agreed to as part of a deal with Gov. Arnold Schwarzenegger and the Democratic leadership, voted to replace him during a private caucus meeting in Cogdill’s office. According to the Times, it was not immediately clear who would succeed him.

As a result of the latest impasse in the three-month budget standoff, the state began sending out layoff notices to 20,000 state employees while Schwarzenegger said he would immediately halt 374 construction projects — valued at $5.5 billion and employing 92,000 workers — if a budget isn’t passed Wednesday.

Schwarzenegger and legislative leaders were unsuccessful in their attempt to use an unusual three-day emergency session over the Presidents’ Day weekend to try to win passage of a $42 billion budget compromise. In addition to the tax hikes, the deal includes $16 billion in spending cuts and up to $11 billion in Wall Street loans. With Democrats united, one Republican vote is required to achieve the two-thirds majority for approval of the $14 billion in new taxes.

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