Pure editorial posturing.
It may be that after a year and a half, Arnold is finally learning that the compromise he thought he would bring to Sacramento will never work as long as he wants to spend one dime less than the Democrats would wish, but I seriously doubt he has any idea about the kind of heat he would experience should he actually invoke substantive cuts. The author has absolutely no clue what is going on. Given that the proposed level of State spending in Arnold's budget INCREASES SPENDING NINE PERCENT this year, one can hardly accuse him of trying to bring responsibility to Sacramento.
Here is an article that explains the situation. I know that the legislative budget isn't the same as the governor's submission, but it differs by substantially less than the deficit about which he speaks.
Chuck Hage, R-Nebraska, is saying essentially the same things you (and others) are saying. Have any ideas on what Hagel might propose to be "done about this"?