Sans Budget, Arnold to Slash Calif. Workers' Pay

Arnold Schwarzenegger is threatening to ease California's cash-flow crisis by slashing the pay of 200,000 state workers to the federal minimum wage of $6.55 an hour, the San Francisco Chronicle reports. A draft executive order obtained by the Chronicle also ends overtime pay for all but emergency employees and lays off 22,000 temporary workers. The proposal, aimed to pressure the deadlocked Legislature into passing an overdue budget, has enraged labor groups.

"We are the victims of the incompetence of the Legislature and Gov. Schwarzenegger," said a union spokesman. "Because they can't sit down and pass a balanced budget, state workers must live in fear of having their wages slashed as much as 90%." The state's Democratic controller vows to keep paying workers their full salaries. (More Arnold Schwarzenegger stories.)