It has become obvious that Gov. Schwarzenegger and legislative leaders of both parties simply won't be able to reach a compromise that comes anywhere close to closing California's rapidly growing budget deficit, now estimated at some $40 billion over two years. The state government is running low on cash. Within weeks, it may have to start paying people in IOUs.

Democrats simply won't agree to enough cuts. Republicans won't agree to tax increases, and they can block that because of the state's requirement for a two-thirds vote. The Democrats' convoluted (if politically smart) attempt to do an end run around two thirds and raise taxes by majority vote isn't going anywhere; even if it's revived and signed into law, it's all but certain to get struck down in the courts or overturned by referendum. The governor you ask? Schwarzenegger has little credibility with lawmakers of either party. When it comes to big deals, he simply can't close.