The Legislature has handed Arnold Schwarzenegger his first political setback. They rejected the governor´s plan to borrow $15 billion to balance the state budget and saying no to a plan to cap state spending.
Democratic legislators said the Republican governor´s proposed spending cap would strangle education and other programs, and his proposed $15 billion bond sale would burden state budgets for years to come.
The Democrats proposed less restrictive spending caps and a borrowing plan that would be paid off in seven years instead of 15. But Republicans rejected that.