California working on a budget to fix its $26 billion shortfall


California may soon have a budget and the ability to repay the IOUs it started issuing on July 1. The damage this budget stand-off has caused to California's bond rating could take a year or more to fix. California's bonds are just two steps away from junk status.

Lawmakers must vote on 31 bills to complete this task and many of those bills include severe cuts to the state budget. While Governor Arnold Schwarzenegger announced a tentative deal on Monday night, the devil is in the details. Those details must now be voted on department by department. The legislators must find a way to fix a $26.3 billion budget shortfall.