Pensioners shouldn't worry -- their benefits are defined by law and no matter how poorly the pension funds perform, they will still get their full monthly checks. But in some cases taxpayers will have to pay more into the funds to cover the shortfalls.... "The good news for CalPERS: We're large enough and diverse enough to weather the storm," Macht said. "We have been through many of the crises." 

The line-item spending vetoes hit services ranging from welfare-to-work programs and an anti-methamphetamine ad campaign, to senior citizen tax assistance and prostate cancer treatment.

The Schwarzenegger administration says posting advertisements on 674 freeway boards would raise millions for highways. Traffic safety experts disagree.

The incident spoke volumes about a problem that has long afflicted Schwarzenegger: his inability to develop the relationships with legislators that might rally them to his causes. While it's far from clear that another governor could have resolved this summer's budget morass more quickly, given the enormity of the problem, Schwarzenegger's weak ties to legislators made his task that much harder.

SACRAMENTO — Gov. Arnold Schwarzenegger signed the state's tardiest budget on record Tuesday after eliminating $510 million in spending, including financial aid for elderly renters and homeowners and a program he championed to lower prescription drug prices for low-income Californians.