California Governor Arnold Schwarzenegger threatened to fire as many as 10,000 state employees if legislators do not approve a deal later this week to help close the state's projected 42-billion-dollar budget deficit.

The governor's spokesman said layoff warnings would be sent to about 20,000 state workers this Friday if there is no deal.

Saying the state is on the brink of running out of money, state Controller John Chiang already has delayed tax refunds and has warned that he soon will be forced to stop paying some state bills or providing funds for some state services. More here.