Schwarzenegger may order deep spending cuts |

Schwarzenegger may order deep spending cuts

SACRAMENTO (AP) ” Governor Arnold Schwarzenegger has directed state agencies to prepare for possible deep spending cuts.

He has ordered state department heads to draft plans for a 10 percent across-the-board reduction. If enacted, it would be the biggest round of budget cuts since Schwarzenegger took office in 2003.

The move comes as the governor has begun putting together his January budget proposal. The state already faces a projected $6 billion deficit next year. His administration has warned for months that the continued housing slump and credit crunch were cutting into state revenues.

But Schwarzenegger’s order indicates the state’s fiscal outlook may be even worse than predicted.

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