Budget

President Obama's proposal for direct government funding of student loans -- cutting out private industry -- sent shares of Sallie Mae, Student Loan Corp., Nelnet Inc. and other college loan companies plunging Thursday. For-profit vocational schools, such as Corinthian Colleges Inc., DeVry Inc. and ITT Educational Services Inc., also saw their stock prices drop. Their students often rely on government-backed loans from private lenders.

In a cheery classroom decorated with posters exhorting students to "Dive into a Good Book," four first-graders, who are struggling to read, recited words ending with the "ang" sound -- bang, rang, sang, fang, gang. The Foothill Ranch Elementary School students used their index fingers to trace the letters into squares of felt and carpet, imprinting the connection between the letters and the sound into their minds.

Based on my e-mail, a lot of folks think the solution to California's state budget deficit is to round up all the illegal immigrants and truck them down to Mexico. Wrong. Even if it were logistically possible and the deportees didn't just climb off the truck and hitch another ride back up north, their absence from the state wouldn't come close to saving enough tax dollars to balance a budget that has a $42-billion hole projected over the next 17 months.

The Obama administration's budget threatens to cut a benefit many Americans view as practically a right -- the mortgage interest tax deduction -- and powerful real estate interests are fighting back. The move would affect only households earning $250,000 or more, but opponents say it could prolong the housing crisis by slowing already torpid home sales and deal another blow to home values ravaged by the market crash.

As California lawmakers struggle with a budget gap that has now grown to $26.3 billion, one of the hottest topics for many taxpayers is the cost to the state of illegal immigrants. The question of whether taxpayers should provide services to illegal residents became a major political issue in California's last deep recession, culminating in the ballot fight over Proposition 187 in 1994.

California's auto dealers are worried that the state's new budget will put an even bigger dent in already miserable sales. Increases in the sales tax and vehicle license fees were key components of the measure signed by Gov. Arnold Schwarzenegger on Friday. Both raise the cost of buying a car.

Gov. Arnold Schwarzenegger vowed Wednesday to let California government come to a "grinding halt" rather than agree to a high-interest loan to keep the state afloat if he and the Legislature do not close the yawning budget gap in coming weeks. At the same time, the governor reversed himself on a proposal to end health insurance for families of police officers and firefighters who died in the line of duty.

Gov. Arnold Schwarzenegger and lawmakers scrambled Wednesday to avert a financial meltdown, and public officials across California braced for annihilating cuts on the day after voters trounced their leaders' rescue plan for the state. Within two hours of returning from Washington, D.C., the governor huddled behind closed doors with Democratic and Republican legislative leaders to grapple with a projected $21.

For years it has been this government town's equivalent of a stone fortress, a bastion of public policy under the watchful eye of a potent political army. But this summer, Proposition 98, the law that guarantees public schools roughly 40% of general fund revenue, is being tested as it has been only a few times before. In the final stages of the weeks-long negotiations over the state's $26.3-billion budget gap, what to do about Proposition 98 has emerged among the last, and toughest, issues.

Richard Rivera joined the Algebra Project at exactly the wrong time. After three years at charter schools, Rivera returned to the Los Angeles Unified School District last year as a math coach -- a kind of roving instructor and supervisor -- at Luther Burbank Middle School in Highland Park. He also agreed to work on the Algebra Project, a new program designed to keep low-achieving students involved in math.