Calif. Assembly OKs Budget Plan; Schwarzenegger Next

California's state assembly today approved a plan to close most of its $26 billion budget deficit, sending the package of financial fixes to Gov. Arnold Schwarzenegger, who's expected to sign it by Monday. The Assembly rejected two of the most controversial measures, a plan to take about $1 billion in transportation funding from local governments, and allowing oil drilling off the California coast for the first time in 40 years.

The loss of $1.1 billion from the budget package essentially eliminates the $900 million reserve fund Schwarzenegger negotiated with Democrats and Republicans. That will force him to use his authority to make even deeper cuts to close the gap.