SACRAMENTO, Calif. – Gov. Arnold Schwarzenegger (search) and legislative leaders struck an agreement on a $103 billion state budget, ending a 26-day standoff that produced a new political insult: "girlie men."
With billions of dollars in borrowing and one-time savings, the spending plan contains little of the cuts the governor wanted in January. But the former bodybuilder shrugged off the criticism.
"I said many times, when I was lifting weights and shooting for a 500-pound lift and maybe ended up at 495 — I was still happy to get it done," the Republican said late Monday after an arduous day of almost nonstop negotiations.
The agreement still needs approval from two-thirds of the Democratic-controlled Legislature, but lawmakers are expected to embrace the compromise. A vote is expected later this week.
Taking a step toward improving California's shaky business climate, Schwarzenegger won agreement to scale back a state law empowering workers to sue their employers over labor violations (search).
But the nearly monthlong delay in getting a budget deal reinforced long-standing concerns on Wall Street that partisan gridlock still pervades the Capitol.
California, one of the few states that require passage of a budget by a two-thirds majority, has begun the fiscal year without a budget now nine times in the last 11 years. Two years ago the spending plan was a record 67 days late. Last year it was more than a month overdue.
Schwarzenegger was unable to keep his promise to enact an on-time budget this year. And during the standoff, he lost some of the good will he had stored up when he ridiculed the Democrats blocking his spending plan as "girlie men" (search) beholden to special interests. (He borrowed the term from a "Saturday Night Live" skit about a couple of Schwarzenegger-like bodybuilders."
The governor was promptly accused of sexism, misogyny and homophobia.
The plan imposes about $5 billion in spending cuts — far less than Republicans wanted and not as much as the Democrats feared.
The Republicans pointed out that the budget imposes no new taxes and may bring future savings through changes in the way the state does business.
The Democrats, on the other hand, got Schwarzenegger to back away from deep cuts to health and welfare programs. The administration also backed away from an enrollment cap on state universities and agreed to a cost-of-living increase for welfare recipients.
To pay for much of the added spending, Schwarzenegger agreed to dip into reserve funds, drawing down the state's rainy day fund from $1 billion to an estimated $400 million.
"We were able to produce a budget that I believe is fair," said Assembly Speaker Fabian Nunez, a Los Angeles Democrat. "It's not a perfect budget but one that we can stand by in a bipartisan manner."
Overall, the budget plan contains more than $5 billion in borrowing as well as at least $1.5 billion in accounting gimmicks and savings that may not be realized — such as a plan to take part of punitive damage awards in lawsuits.