State agencies spare many from Schwarzenegger ax -- State agencies spared thousands of temporary and part-time workers from layoffs and California's prison medical czar on Friday sought to exempt nearly the entire corrections department from a minimum-wage pay cut, raising doubts about how much cash the state will save under Gov. Arnold Schwarzenegger's executive order. Besides instituting layoffs and a temporary pay cut, the governor eliminated overtime and imposed a hard hiring freeze. He allowed exemptions for crucial health and safety positions, but also for those serving revenue-producing functions, providing leeway. Kevin Yamamura in the Sacramento Bee -- 8/2/08

Union fights governor on pay cuts, layoffs -- California's largest state workers union filed two challenges Friday to Gov. Arnold Schwarzenegger's order to lay off thousands of workers and drastically reduce the pay of most other state employees to save cash during the budget impasse. Matthew Yi, Samantha Sondag in the San Francisco Chronicle Michael Rothfeld and Susannah Rosenblatt in the Los Angeles Times -- 8/2/08

State's Medi-Cal program is being hit hard -- California's Medi-Cal program, which funds health care for 6.6 million low-income people, is being hit with a double whammy. Starting next week, Medi-Cal payments will cease for about 4,700 hospitals, clinics, adult day care centers, convalescent homes and other institutions until the state's budget deadlock ends. Elizabeth Fernandez in the San Francisco Chronicle -- 8/2/08

Gov. Arnold Schwarzenegger cuts hit services -- A day after Gov. Arnold Schwarzenegger ordered the layoffs of more than 10,000 state employees, officials said they expect that state facilities such as Department of Motor Vehicle offices, parks and beaches will stay open - but the lines could be longer and the service worse. Rick Orlov and Harrison Sheppard in the Los Angeles Daily News -- 8/2/08

Layoffs add to frustration at some local DMV offices -- Long waits at some Department of Motor Vehicles offices – more than two hours in Poway – were one result yesterday of Gov. Arnold Schwarzenegger's order to lay off 10,000 temporary and part-time state workers. Ed Mendel in the San Diego Union-Trib -- 8/2/08

Ad Watch: Radio spot opposes using gas taxes to balance budget -- Transportation, local government, labor and business advocates launched a radio campaign July 23 to fight rumors of a possible transportation raid to help balance this year's budget. Judy Lin in the Sacramento Bee -- 8/2/08

Senators craft bipartisan energy bill -- A bipartisan group of U.S. senators seeking to end the energy wars raging in Congress unveiled new legislation Friday that would allow some offshore oil drilling but also would invest heavily in wind and solar power, electric vehicles and alternative fuels. Zachary Coile in the San Francisco Chronicle Richard Simon in the Los Angeles Times -- 8/2/08

State utilities to miss energy deadline -- California's electrical utilities probably will miss the state's 2010 deadline for increasing their use of renewable power and could face a serious obstacle if Congress does not extend tax credits for wind farms and solar plants, according to a report issued Friday. David R. Baker in the San Francisco Chronicle -- 8/2/08

U.S. probe into salmonella outbreak criticized -- Two days of congressional hearings this week into the nation's largest salmonella outbreak in a decade revealed a Keystone Kops government investigation that spanned more than two months and stretched from a false alarm about U.S. tomatoes to suspicions about peppers from Mexico. State health officials and growers slammed federal officials for refusing to ask for help or use common sense. Carolyn Lochhead in the San Francisco Chronicle -- 8/2/08

San Francisco to lose millions for border billings -- San Francisco authorities have been able to justify the handling of just 127 border-prosecution cases out of the more than 2,300 that the city billed to the federal government under an anti-crime grant program. Jaxon Van Derbeken in the San Francisco Chronicle -- 8/2/08

Mayor accused of going back on transit deal -- San Francisco Mayor Gavin Newsom broke a promise to withdraw a measure from the November ballot that would change the makeup of the panel that oversees the city's transit system, a steaming-mad city supervisor charged on Friday. Heather Knight in the San Francisco Chronicle -- 8/2/08

National Guardsman wins suit for having been laid off -- George Juelch was in Baghdad, about to embark on a hazardous eight-hour road trip to Mosul, when he got a disturbing phone call from his wife in Pismo Beach. She told him she had just opened a letter from the California Military Department. The department runs the National Guard and had hired Juelch as a cook at Camp San Luis Obispo before he was mobilized for Iraq duty. John Hill in the Sacramento Bee -- 8/2/08

Dispute threatens casino run by tribe -- In a move that could force the closure of Valley View Casino, the Bureau of Indian Affairs said yesterday the tribal government for the San Pasqual Indian band has collapsed in a rift over tribal membership. Onell R. Soto in the San Diego Union-Trib -- 8/2/08

Food banks in demand -- Food agencies throughout the region are reporting a marked increase in people asking for charitable food assistance. Agencies that distribute food to the needy attribute the problem to the nation's economic downturn with more people finding it difficult to pay for gas and shelter, let alone the cost of food. Neil Nisperos in the Inland Daily Bulletin -- 8/2/08

Obama agrees to 3 debates with McCain -- Democratic candidate Barack Obama on Saturday backed further away from rival John McCain's challenge for a series of Lincoln-Douglas debates, agreeing only to the standard three face-offs in the fall proposed by the Commission on Presidential Debates. AP -- 8/2/08

Obama says he's open to some offshore oil drilling -- Democratic presidential candidate Barack Obama said Friday he would be willing to support limited additional offshore oil drilling if that's what it takes to enact a comprehensive policy to foster fuel-efficient autos and develop alternate energy sources. AP -- 8/2/08

McCain faces a tough crowd on affirmative action -- He tells a largely black audience that the practice should end. But his position on the issue is nuanced. David G. Savage in the Los Angeles Times -- 8/2/08

Sacramento-area schools add algebra requirement to the equation -- When the state Board of Education dropped its bombshell last month requiring algebra for all eighth-graders, many predicted a mess. Algebra is brutal, they warned. Schools don't have enough qualified teachers. Kids arriving in eighth grade can't even do basic arithmetic. Testing them all in algebra will drive test scores down and dropout rates up. Deb Kollars in the Sacramento Bee -- 8/2/08

UC keen to deal with stadium, not sitters -- UC Berkeley asked a state appeals court Friday to allow the campus to begin construction of a sports training center next to Memorial Stadium, where tree-sitters have waged a protest for the past 20 months. Carolyn Jones in the San Francisco Chronicle -- 8/2/08

Caltech researchers create a 'microscope on a chip' -- Caltech researchers have developed a "microscope on a chip" using an inexpensive lensless magnifying system that relies on a light-sensing chip to achieve the resolving power of a conventional microscope costing thousands of times more. Thomas H. Maugh II in the Los Angeles Times -- 8/2/08

College chefs stretch menus in lieu of rising food costs -- College students might find more beans and less beef in dining halls this year, as universities wrestle with rising food and fuel costs. Like families across the country, colleges are figuring out how to deal with food costs that climbed 4 percent in 2007 and are expected to go up an additional 4.5 percent this year. Jean Cowden Moore in the Ventura Star -- 8/2/08

Lawsuit over potato chip ingredient settled -- Frito-Lay and two other potato chip companies have agreed to reduce the levels of a cancer-causing chemical in their products in a settlement of a state lawsuit, Attorney General Jerry Brown said Friday. Bob Egelko in the San Francisco Chronicle -- 8/2/08

Bill proposes fees on more plastic containers to encourage California recycling -- Consumers would pay a redemption fee on a broader range of plastic containers, from ketchup bottles to peanut butter jars, under a bill pending at the Capitol. Daniel Zarchy in the Sacramento Bee -- 8/2/08

Lifting of travel ban a relief to HIV-positive immigrants and travelers -- Rosendo Sanchez wanted to join fellow health educators from across the world gathering for the International AIDS Conference that launches this weekend in Mexico City. But the longtime Oakland resident worried that if he attended, he might never return. Matt O'Brien in the Oakland Tribune -- 8/2/08

Chronicle to offer job buyouts to 125 -- The San Francisco Chronicle will offer at least 125 employees the chance to take a buyout before the end of the year, the company said Friday. "Obviously, we're not the first newspaper to be affected by the continuing downturn in advertising," said Publisher, President and CEO Frank Vega. "We are hopeful that by opting for our employees to voluntarily sign up for buyouts we can avoid any type of layoffs going forward." The item is in the San Francisco Chronicle -- 8/2/08

Losses cripple a family -- When Jasmine Sanders, 8, was shot to death outside her home, it was a painful shock -- one among far too many for her relatives. Ruben Vives in the Los Angeles Times -- 8/2/08

L.A. ethics panel investigates ex-city department head's new job -- Robert Aguallo Jr. has taken a job with Cardinal Americas. Earlier, the employee retirement system, which he then headed, decided to invest up to $10 million in the company. David Zahniser in the Los Angeles Times -- 8/2/08