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States slashing budgets, axing jobs, halting major construction projects With the economy in a slide and the credit markets seized up, states are slashing budgets, eliminating jobs, putting major construction projects on hold and nervously waiting to see whether their shriveled pension funds recover. They are also weighing lawsuits against Wall Street firms. And at least one state — California — may ask Washington to come to the rescue. Gov. Arnold Schwarzenegger warned he may have to beg the federal government for a short-term loan to cover operating costs for schools, nursing homes and police if the nation's most populous state is unable to borrow a short-term $7 billion on the credit market. Dozens of states are expecting big drop-offs in revenue and dispiriting pension-fund losses, and are making another round of... [read full story]
