Deal reached to close Calif. budget deficit

Posted: June 22, 2012

SACRAMENTO, Calif. - California will close its projected $15.7 billion budget deficit by restructuring the state's welfare program, streamlining health insurance for low-income children, and reducing child-care coverage and college aid under a deal Gov. Jerry Brown and Democratic leaders announced Thursday.

The governor and lawmakers provided only broad outlines of the cuts and few hard-dollar figures, but Brown said the deal met his demand for permanent welfare reform and he now was willing to sign the main budget bill Democratic legislators sent him last week.

Even with the changes, the state's new spending plan still relies heavily on voters in November approving Brown's initiative to raise the state sales tax and increase the income tax on people who earn the most.

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