Arnold's Last Stand: How the Lame-Duck Governor Is Fighting for One Last Win Over Unions

For months, California has been a laughingstock state, unable to pass an annual budget, facing a declaration of "fiscal emergency," fighting over pay cuts and furloughs for government employees, threatening to issue IOUs to creditors. With a "framework" budget agreement expected to pass later this week, Reason.tv looks at why this long fight over a bloated budget may be good news for California's future.

The Golden State is facing a half-trillion-dollar shortfall in funding its pension commitments to public employees. But this year, Gov. Arnold Schwarzenegger, who has fought the unions and lost many times, got the momentum on his side. As the public seethes over cuts to public services and excessive compensation to public employees, Schwarzenegger has used the budget negotiation as leverage to wring concessions from the Democrats and their patrons in organized labor.

The first steps toward reform have already been taken. Several government employee unions have agreed to less expensive contracts, and the budget deal reportedly includes the repeal of a 1999 law that drastically increased the unfunded pension burden on taxpayers. The termed-out Schwarzenegger won't be back. But the fight to get the state's pension crisis under control will continue.

Approximately 6:09 minutes.

Written and produced by Tim Cavanaugh. Shot and edited by Alex Manning.

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