Schwarzenegger Talks Budget Crisis

Los Angeles (myFOXla.com) - Gov. Arnold Schwarzenegger says California's Democratic-led Legislature is putting union interests over taxpayers' well-being as the state prepared to issue IOUs for the first time in nearly 20 years.

The Republican governor said at a Los Angeles press conference Democrats have resisted reforms he believes must be part of solving the state's $26.3 billion shortfall.

You can watch Tony Valdez's report in the video player.

The governor recently proposed changes to cut state employees' pensions and adopt fraud-prevention measures for in-home caregivers.

Democrats have criticized him for including long-term policy changes as part of budget negotiations.