Schwarzenegger unveils plan to fix Calif. budget

A state spending cap, up to $15 billion in loans


SACRAMENTO, Calif. - Since winning the California recall election, Arnold Schwarzenegger has been vague about how he would deal with the state's mammoth budget problems, the driving force behind the ouster of former Gov. Gray Davis.

Yesterday, his first full day as governor, Schwarzenegger offered a glimpse of his strategy: He intends to borrow up to $15 billion to cover most of the existing deficit and impose a constitutional spending cap to avoid future overspending.

To make sure his plan survives Sacramento's notorious political infighting, Schwarzenegger, a Republican, will ask the Democrat-controlled Legislature to put both proposals to a statewide vote in March.

"We cannot fail the people," Schwarzenegger said. "I urge all of the people to let their voices be heard. Write and call your legislators and let them know you want action, and you want action now."

Schwarzenegger unveiled his California Recovery Plan at a news conference here in advance of a special session of the Legislature, which was convened later in the day.

The lawmakers are considering several proposals by the Schwarzenegger administration, including an $11 billion overhaul of the state's workers' compensation system and a government reform package that would "allow sunshine into the darkest corner of state government," in Schwarzenegger's words, by opening up most books, including his appointment calendar, to public scrutiny.

Schwarzenegger has also asked the Legislature to repeal a contentious new state law, signed by Davis during the recall campaign, that allows illegal immigrants to obtain a state driver's license. Schwarzenegger said yesterday that he would be open to drawing up a different version of the law.

The Legislature must approve the various ballot measures by Dec. 5 for them to appear on the ballot in March, when the state holds its presidential primary.

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