Progress in budget talks?

Well, most of the major national banks have stopped accepting the state's IOUs, so perhaps they'll be picking up the pace in Sacramento. The governor and legislative leaders will be talking over the weekend. From AP:

Late Friday, lawmakers from both parties expressed optimism about the direction of the talks but cautioned that a lot of work remains. That is particularly true in meeting the demands for government reform by Gov. Arnold Schwarzenegger and Republican lawmakers. "It was the most productive negotiation we have had in weeks," said Senate leader Darrell Steinberg, D-Sacramento. "We still have a ways to go."

Not to sound like a broken record, but there is still little sense of urgency. In fact the LAT reports that much of Sacramento is operating as if there were no crisis at all.

The anxiety in the Capitol has not reached the level it did last time the state found itself doling out IOUs, in 1992, when fears of firehouses shutting down, parks closing and the state falling into receivership gripped the public. Since then, the state has hopped from one fiscal calamity to the next. The latest disaster has provoked far less alarm. Some say that gives lawmakers incentive to do what a discouraged electorate expects: dawdle, even as California collapses. "The public is not helping at the moment," said Barbara O'Connor, director of the Institute for the Study of Politics and Media at Sacramento State.

Again, keep in mind that most of the immediate pain to be felt from the massive deficit involves poor people, especially those who are old and/or sick. These are not sought-after constituencies - certainly no match for middle and upper-class voters who would not put up with the necessarily taxes/fees to help resolve the crisis. That may not be the entire story, but it's a good deal of it.