Court battle brews over state budget


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The problem started when the legislature sent the governor a budget that did not solve the entire deficit. With lawmakers gone for summer recess, he said he had to take out his veto pen to balance the budget.

Senate President Darrell Steinberg is taking Governor Schwarzenegger to court next week over the $500 million in budget cuts he made with his blue pencil -- otherwise known as line-item vetoes.

He'll claim in the lawsuit, the Governor has no authority to exercise those executive powers because he signed a budget "revision," not an actual budget "appropriation."

"The precedent that would be set by allowing this to go unchecked is very troubling to me, because the system depends upon a healthy balance here," said Sen. Steinberg.

The cuts were unpopular among those who were affected the most: mainly the poor, blind and disabled groups that typically align with Democrats.

The Governor's office says the line item vetoes are legal.

"We have absolutely have the authority, and the courts will uphold that. But that's not really the issue. The issue is what would we do if not these cuts? Is the tax increases that Senator Steinberg is suggesting?" said the Governor's Press Secretary Aaron McLear.

The lawsuit comes at time when Democrats are privately questioning Steinberg's ability to be a strong leader. They have complained about the other $30 billion in cuts he's signed off on so far this year. This legal maneuver may be a way to show his party he can take on the Governor.

Senator Steinberg insists this is about keeping the balance of powers in check.

Whatever the reason, Randall Jose just wants his program restored. He's been going to his adult health day care program everyday for nearly 20 years.

The budget cuts are forcing him to be able to go only three days a week.

"If that's what it takes, I would appreciate it if he would," said Jose about the lawsuit to get the money back into his program.

If the lawsuit is successful, that would immediately create a $500 million shortfall, possibly jeopardizing the state's ability to issue IOUs to pay its bills.

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