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(CNN) — Faced with a projected $42 billion deficit, California Gov. Arnold Schwarzenegger says his office will send out 20,000 layoff notices Tuesday if lawmakers fail to reach a budget deal before then, according to a spokesman.

The Republican governor, who declared a fiscal emergency in December, has butted heads for months with the Democratic majority over alleviating the state’s $11.2 billion revenue shortfall.

He warned lawmakers about the cuts last week, urging them to approve the latest budget proposal.

However, voting was stalled during a 30-hour weekend session as the legislature mulled over 26 pieces of legislation that make up the budget package.

By Monday night, there was still no vote on the floor, and the State Assembly in Sacramento was not in session as night fell.

A single Republican vote is holding the budget from passing with a two-thirds majority, Schwarzenegger spokesman Aaron McLear told CNN late Monday. 

Some Republican lawmakers, including state Sen. Abel Maldonado, R-Santa Maria, say they don’t agree with the $14.4 billion in tax increases tied into the budget package.

The cuts, if they happen, wouldn’t begin until the start of the fiscal year on July 1, starting with employees of least seniority, McLear said.

The cuts would save California $750 million for the year.

McLear added that state workers are under contract, meaning layoffs would be a slow process. Schwarzenegger and lawmakers have tried discussing alternatives to avoid the scenario.

Running short of cash, California last month started delaying $3.5 billion in payments to taxpayers, contractors, counties and social service agencies so the state could continue funding schools and making debt payments.

“The real-life impact will be the slowdown — the actual shutdown — of hundreds of state funded transportation projects, people not getting paid, taxpayers not getting refunds,” said Senate President Pro Tem Darrell Steinberg, D-Sacramento.

CLARENCE CENTER, New York (CNN) — A Continental Airlines plane crashed into a house near Buffalo, New York, late Thursday, killing all 49 people aboard and a person in the home, authorities said.

“This is easily the saddest day in the history of our airline,” said Philip Trenary, CEO of Colgan Air, which operated the flight for Continental. Continental Connection Flight 3407, a Bombardier Dash 8 Q400 74-seat turboprop, was en route from Newark, New Jersey, to Buffalo when it went down at around 10:20 p.m. ET, about seven miles from Buffalo Niagara International Airport.

Dave Bissonette, Clarence Center’s natural disaster services coordinator, said it was “clearly a direct hit” on the house. Four people were injured at the crash site, including a mother and daughter inside the house that was hit. They suffered minor injuries and were treated and released from a Williamsville hospital, a spokeswoman said.

Two firefighters also were brought in for treatment of smoke inhalation and minor injuries. The ferocity of the fire was such that officials don’t expect the crash site to be safe for investigators until about noon Friday, nearly 14 hours after the crash.

CNN has listened to a tape of communications between air traffic control and the flight crew. The first officer was calm. The plane was cleared for approach. About two minutes later, the air traffic controller came back, his voice full of stress. Radar contact was lost.

The question goes out: Can other planes see anything? No one responds. The controller says they might have a plane down. The pilot’s last comment was “Colgan Flight 3407.” There were no sounds of distress.

It was not clear whether the mix of sleet and snow in the area played any role in the crash of Flight 3407. Other planes continued to arrive and land safely at Buffalo about the time the flight went down. Delta Flight 1998, an MD-88 jet, landed at 10:17 p.m. The Delta crew did not see Flight 3407.

The Delta flight reported rime icing, a condition in which ice quickly builds up on the leading edge of the wings. A US Airways flight also reported icing. Authorities said the plane went down near a fire hall, so firefighters were quick to respond to the crash site. At least nine volunteer fire departments responded.

Witness Tony Tatro was on his way home from the gym when the plane flew about 75 feet above him. The craft’s nose was lower than usual and and the left wing was tilted, he told CNN. “The engines didn’t sound typical, didn’t sound normal,” he said.

Keith Burtis said he was driving about a mile from the crash site when he heard the plane go down. “It was a high-pitched sound,” Burtis said. “It felt like a mini-earthquake.”

Shortly after the crash, Burtis said he saw a steady stream of fire trucks rush by him as smoke billowed into the sky. Other witnesses told CNN they saw the plane nose-dive toward the ground.

Twelve people were evacuated from scene. Law enforcement officials are asking people not to go to the crash site in fear they may hinder the investigation. “I felt the impact … sounded like a large explosion,” said Brendan Biddlecom, who told CNN he lives two blocks from where the plane crashed.

Biddlecom ran out of his home to within a couple hundred yards of the crash. The smoke was thick and acrid, and the heat was intense, he said. Chris Kausner, who had a sister on the flight, rushed to the Clarence Municipal Center, where he waited for information after emergency teams turned him back from the scene.

“My parents are on vacation in Florida and I had to call down there and tell my father what was going on,” he told CNN affiliate WIVB-TV. When asked how his parents were handling the news, a shaken Kausner responded “To tell you the truth, I heard my mother make a sound that I have never heard before.”

The Erie County Medical Examiner’s Office established a command post at the scene and had investigators there, a statement from the office said. Officials said relatives of passengers aboard the flight should call 800-621-3263 for information. A team from the National Transportation Safety Board arrived in Buffalo on Friday morning.

NTSB board member Steven Chealander told CNN the plane’s voice and flight data recorders were likely intact in the still-recognizable tail section. The full investigation of the crash could take a year or more, he said.

Thursday’s incident is the first fatal crash of a commercial airliner in the United States since August 2006 when Comair Flight 5191 crashed when it attempted to take off from the wrong runway.

(CNN) – Sen. John McCain said Monday that President Obama and Democrats will have to “seriously negotiate” with Republicans if they want to pass a stimulus plan with bipartisan support.

Sen. John McCain says he’d vote “no” on the stimulus bill as it stands. “I think we are clearly prepared to sit down, discuss, negotiate a true stimulus package that will create jobs,” McCain said on CNN’s “American Morning.”

“We all know how tough the economy is,” he said. “But now it’s time, after the way it went through the House without any Republican support. It’s been rammed through the Senate so far. We need to seriously negotiate. We haven’t done that yet.” As the bill stands,

The former GOP presidential nominee said he is working with a group of fellow Republican senators to come up with an alternative package that emphasizes payroll tax cuts, provides incentives for people to stay in their homes and eliminates policy changes that have nothing to do with job creation.

Republicans have blasted numerous measures they say shouldn’t be part of a stimulus package, such as funding for veterans in the Philippines, sod on the National Mall and honey bee insurance.

“I can’t believe that the president isn’t embarrassed about the products that have been produced so far,” Sen. Mitch McConnell, the Senate minority leader, said Sunday on CBS’ “Face the Nation.”

McCain said the way to separate what’s pork and what isn’t is by asking two things: Does it take effect in the next year or so, and does it create jobs?

“Many of the policy changes they put in have nothing to do with stimulating the economy and everything to do with their agenda which they’re unable to get through,” he said.

McCain was optimistic that Republicans and Democrats could negotiate and come up with an acceptable package.

President Obama said Sunday he’s confident that his economic package will have Republican support once the final plan is hammered out.

“I’ve done extraordinary outreach I think to Republicans because they had some good ideas. And I want to make sure that those ideas are incorporated,” he said in an interview with NBC.

“We’re going to be trimming up — things that are not relevant to putting people back to work right now,” he said.

The House’s $819 billion stimulus bill passed last week without a single Republican vote, despite Obama’s efforts to work with both sides of the aisle.

This weekend, both Republicans and Democrats spoke in favor of scrubbing the bill of funding for programs that aren’t specifically geared toward stimulating the economy.

Sen. Ben Nelson (D-Nebraska) and Sen. Susan Collins (R-Maine) oppose the proposal in its current form and want to slash what they call wasteful spending from the bill, so moderate Republicans and conservative Democrats will be more likely to vote for it.

The two senators, known as consensus builders, spent the weekend eliminating measures that do not narrowly target job and economic growth.

“Our goal is to have a bill that is both bipartisan and effective. That’s what we want. There’s no doubt that the American people don’t want to see partisan politics in this debate,” Collins said Sunday on CNN’s “State of the Union.”

Collins said Sunday that the bill has become “a Christmas tree where members are hanging their favorite program on it.”

“A lot of these programs are worthwhile. But we have to focus on what the impact is on the economy and whether or not the spending creates or saves jobs. That’s the question. That’s the test that needs to be passed,” she told CNN.

The $819 billion version passed in the House is two-thirds spending and one-third tax cuts.

Much of the $550 billion in spending is divided among these areas: $142 billion for education, $111 billion for health care, $90 billion for infrastructure, $72 billion for aid and benefits, $54 billion for energy, $16 billion for science and technology, and $13 billion for housing.

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LOUISVILLE, Kentucky (CNN) — National Guard troops were going door to door Sunday in Kentucky, checking on families in the worst-hit areas of what Gov. Steve Beshear called “the biggest natural disaster that this state has ever experienced in modern history.” John Randolph moves fallen branches at his home in the Louisville, Kentucky, area Sunday.

The “unprecedented” call-up of the National Guard includes 4,600 troops in various roles.

Of 120 counties in the state, 92 had declared emergencies, the governor’s office said. More than 400,000 customers were without power.  Temperatures were higher Sunday — in the 40s — which meant some relief, but also new problems. Melting ice and snow can make it more difficult for utility trucks to reach certain areas.

And the National Weather Service warned of another potential problem: winds that could knock down loose trees.

“Although not particularly strong, winds between 10 and 15 mph can be expected later this morning and through the early evening over areas affected by the recent ice storm last week,” the NWS said.

Louisville resident John Randolph showed CNN tree branches that fell onto his two-story suburban home.

“Just the power and the … crunch and the crash and … just the overall power of the branches falling was actually pretty frightening” when the ice storm was setting in, he said.

He added, “The baby slept through the night and didn’t wake up once. My wife and I, once we heard the first branches falling, we didn’t go back to sleep the whole night. We didn’t know what to do. … Ultimately, we sort of just stayed in our bedrooms and I just kind of went outside periodically and assessed the situation.”

Randolph’s home — which escaped serious damage — is among those without power.

Beshear planned to visit areas in the western part of the state, the hardest hit region, where National Guard troops were also focusing their efforts.
“The troops have been instructed to attach green tape to the homes in which residents have sufficient food, power, water or communications. Red tape will be used to indicate homes where shortfalls exist,” according to a Kentucky Air National Guard news release.

“Houses marked with red tape will be reported to local emergency operations centers and will be placed on a list to be resurveyed for on-going support based on county capabilities.”

Arthur Byrn, mayor of Mayfield — one of the cities hit hard by the storm — told CNN Radio that authorities were conducting a “door-to-door welfare check of the entire Graves County area, which is 38,000 people.”

He said it could take “as much as two months” for the county to have 100 percent of its power back.

“It’s quite disconcerting to go out at 7 o’clock at night and not see a light anywhere other than [a headlight] coming down the street,” Byrn said.

He added, “Devastation is sometimes an overused word, but I would say that’s what we had.”

Jamie Gunnels, who was staying in a Louisville shelter with her 18-month-old son, said it was “entirely too cold” to stay in her house without power.

“We were sitting there being thankful that we still had power,” she said. “A few minutes after we said we were thankful we had power, it went out.”  Louisville Mayor Jerry Abramson said four people had died in his city. Two elderly people and their special-needs adult child died because of an “improperly vented” generator, and another person died after using a charcoal grill as a heater for the house.

Abramson said authorities were trying to let people know it’s dangerous to take generators and grills inside.

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