A deal on state budget

Gov. Arnold Schwarzenegger and California's top lawmakers are set to resume talks Monday with the hope of hammering out the final details on a deal to close the state's $26.3 billion budget deficit.AP in the Daily News.

The negotiations come as the state pays its bills with IOUs for the first time in nearly 20 years and as major credit agencies threaten the state's already basement-level bond rating. The dismal economy has forced a new round of cuts just 4 1/2 months after California closed a previous $42 billion deficit.

The state's four top legislative leaders had been scheduled to meet with the Republican governor Sunday to work out what all sides expected to be the final budget deal. But the meeting was abruptly postponed by scheduling conflicts.