Schwarzenegger, GOP reject stopgap for California budget

California's budget problems evolved into a game of political chicken Thursday, as Gov. Arnold Schwarzenegger and GOP state senators took an all-or-nothing stance that could lead to issuing IOUs to pay the state's bills.

On highly unusual bipartisan votes, the Assembly overwhelmingly passed three bills that would free up cash for the fiscal year that starts Wednesday, by cutting school spending and delaying some payments to schools, colleges and local governments.

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