We interrupt the election analysis to bring you a bit of policy news.

In the wake of the nation's deepening economic crisis, state leaders across the country are working hard to take action in response.

In California, lawmakers and Gov. Schwarzenegger are discussing the possibility of a special session to reassess budget priorities amidst the news that revenue for the state might fall as much $1 billion below the amount originally projected.

In New Jersey, both chambers of the legislature will meet for an address by Gov. Jon Corzine and the Senate Budget and Appropriations Committee plans a special hearing on the economy for next Monday.

State employees are among the people being impacted by the projected budget shortfalls. In many states, government workers are being offered early retirement packages, and others are being asked to work fewer hours or to pay more for benefits. Still other states, like Pennsylvania, have instituted a hiring freeze in an effort to balance their budget.

The possibility that municipal bond markets might become inaccessible is another huge potential problem facing local governments. State lawmakers have begun to appeal to the federal government for assistance, but it appears that there are legal barriers that would prevent Washington from coming to their aid. Namely, a longstanding provision of the Internal Revenue Code prohibits the federal government from guaranteeing the tax-exempt bonds that local governments issue.

We'll obviously have plenty more to say about politics as Election Day draws closer, but this crisis will be a major point of emphasis for our legislators in the near future, and we'll keep you posted on other responses as they develop.