assembly speaker karen bass of los angeles charged out of the governor's office clearly distraught and walked briskly down the hall. she says "he should fix it." a luton to arnold torres and mariposa refusal to accept a budget deal that would have averted if the iou, but not closing higher deficits. the governor is using social media tools to give his side of the budget deal. he has his own page on twitter. let's show it to you. he is sending tweets of what is happening with the state budget. here is one from july 1 posted at 11:00 a.m.. that is a look at his page on twitter. something he and his staff are using is youtube. they've created a video that gives their perspective of how the legislature is approaching the budget. let's look at it. >> right now in the midst of a budget crisis, they are debating about cottontaiw tails. >> [unintelligible] >> [unintelligible] >> i think this is inexcusable. how can they explain this to the california people, that in the midst of the biggest budget crisis we're having a debate about cow tails. i'm asking legislators to stop debating about that

assembly speaker karen bass that of los angeles charged out of the governor's office clearly this truck and walked briskly down a hall. "he broke it,ty should fix it" abbas said tersely, alluding to schwarzenegger's refusal to fix it, but not closing the entire deficit. the governor's using media tools to give his side of the budget. he is actually sending tweets of what is happening in the state budget. for example, july 1, posted at 1:11 a.m., a "is almost 10:00 and they are still running drills of stairs, trying to pass the same bills id total hours ago. we need to solve the deficit." another mode he and his staff are using is youtube, they have created a video that gives their perspective on how the legislature is approaching this budget. >> right now, in the midst of a budget crisis, they are debating about couch tales. -- cow tails. >> [unintelligible] ç>> and i think that this is inexcusable. i mean, how can they explain this to the californian people, that in the midst of the biggest budget crisis, we are having a debate about khost tales. -- cow tails. >> here is what it look

here to talk about that is the speaker, karen bass joins us. it's a pleasure. thank you for joining us. you were quoted as saying these are cuts you did not want to make but you feel as though you had to because of the depth of this recession. >> we had no choice. california is one of three states that requires a two-thirds vote to raise revenue. raising revenue was not an option this time. we did have to make over $15 billion in cuts. they're devastating cuts because if you think about it, we just finished a couple months ago making another round of cuts to the tune of about $11 billion. >> one of the things that worries people though is the fact that the local municipalities will have to give money to the state and l.a. county, i don't know if you've had a chance to see this, l.a. county says it is going to sue if the state takes any local money. >> right. >> you may be facing a number of lawsuits because some of these municipalities themselves are hurting. >> i do have to tell you that the money we are taking from the locals is borrow. we will pay it back wi

and our station in sacramento kcra is reporting today that assembly speaker karen bass, a democrat, is threatening to boycott any budget discussions with the governor out of protest because she doesn't think he's "serious about resolving the crisis." maria? >> thanks very much. we get more on the financial crisis facing california right now including the issuing of those ious are w. another cnbc exclusive. joining me now from the state capital in sacramento is california state treasurer bill lockyer. mr. treasurer, good to have you on the program. thanks so much for spending the time. >> thank you. >> what is your reaction to this latest downgrade by fitch two, notches for the state? >> well, it wasn't a surprise, but it's disappointing of course, to have our credit ratings slip some more. we don't think there's any substantial risk of default, but that's not the only test that goes into their methodology. >> you don't think there's a risk of default, and yet so many people talk about these ious. the state issuing these ious. the redemptions will begin in october. thatwhat are the chan