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California governor cuts welfare
Arnold Schwarzenegger cuts $656m from programmes for the needy as he signs budget.
Last Modified: 28 Jul 2009 20:59 GMT
Schwarzenegger said the cuts made under his veto power are aimed at boosting a reserve fund [EPA]

The governor of the US state of California has cut $656m from welfare and healthcare programmes as he strives to curb a $26bn budget deficit.

Arnold Schwarzenegger invoked his veto authority on Tuesday to cut the cash from state programmes as he signed an $85bn budget plan for 2010.

"Those are ugly cuts and I'm the only one that is really responsible for those cuts because the legislature left - they didn't want to make those cuts," he said.

The additional cuts include $80m from child welfare programmes, $61m from county administration over government sponsored healthcare for the poor and $52m from Aids prevention and treatment projects.

Healthy Families, a low-cost health insurance programme for poor children, will lose $50m, while $6.2m will be cut from state parks.

Schwarzenegger said that he used his veto powers to fill a reserve fund that he says is needed for times for unexpected emergencies such as earthquakes and wildfires.

Economic crisis

But Darrell Steinberg, the state senate president and a Democrat, criticised the decision.

"We will fight to restore every dollar of additional cuts to health and human services … This is not the last word," Steinberg said in a statement.

California's budget deficit stems from the national economic crisis.

State tax revenues have fallen after hundreds of people in California lost their jobs and their homes.

The compromise 2010 budget plan was formulated in the hope that the state will no longer have to issue IOU-style promissory notes to vendors.

But Michael Genest, Schwarzenegger's finance director, said on Tuesday that California will probably need to borrow between $8bn and $10bn to cover its immediate cash needs for the rest of 2009.The state could face a budget defcit of between $7bn and $8bn in the 2010-11 fiscal year, he said.

Source:
Agencies
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