The Senate Republican leader says budget negotiations between lawmakers and the governor are essentially dead, after apparently a very hostile meeting in Schwarzenegger's office that blew up on Thursday.
The Governor's strategy to pressure Republicans to cave by openly criticizing the pass apparently backfired. Now GOP leaders don't even want the Governor to be part of negotiations.
That is certainly an unexpected setback as the state is running out of cash in two months.
It's day 36 of the stalemate, and new projections show the budget deficit calculator is on track to being a record $42 billion by the middle of 2010.
New talks to solve the problem between the Governor and Legislative leaders, known as the "Big Five," apparently blew up as Republicans are still seething over Schwarzenegger calling them "unprepared."
"The Big Five process has been irrefutably compromised as a result of comments made in the press over the last couple of days, and it's pretty difficult to negotiate in good faith in that situation," said Minority Leader (R) State Senator Dave Cogdill.
The fact that Governor Schwarzenegger seems to appear publicly with only Democratic lawmakers these days, speaks to the strained relationship he has with his own party and his inability to bring any GOP votes to the table.
"I think that this compromised and all that might be an excuse not to negotiate. But the bottom line is we have to meet," said Gov. Arnold Schwarzenegger (R) California.
Leaders are so desperate for a solution, Assembly Speaker Karen Bass is considering a lockdown during Christmas break, meaning no one would be able to leave until the state's financial mess is solved.
"We might need to exert a little pressure. If we need to hold folks in for a while and let them come to their senses and recognize that there are many long term solutions we need to put in place. But the fact of the matter is -- we are running out of cash right now. Today," said Assembly Speaker (D) Karen Bass.
"It is not in anyone's best interest that we would halt construction on these on-going projects," said Caltrans Director Will Kempton.
Meanwhile, the Caltrans Director told the Assembly Budget Committee about the dire consequences of pulling the funding for the state's infrastructure projects. The move would cost 200,000 jobs.
"Everybody on the job right now is pretty nervous about the whole situation because we know if the funds are cut off, we will in the unemployment line," said crane operator Jeff Smith.
Despite the setback, Democratic leaders remain hopeful that a budget solution can be put up for a vote before Christmas.