For the dozen lawmakers tasked with producing a deficit-cutting plan, the threatened "doomsday" defense cuts hit close to home.

Wall Street's volatility has hit state pension funds just as they were beginning to recover from the recession, turning what was merely a troubled forecast into a potentially stormy future for taxpayers who are on the hook for billions in unfunded liabilities for government retirees.

A study released Friday by a pension-reform group suggests California state and local governments could save billions of dollars a year by moving to a hybrid retirement plan similar to one used by the federal government.

Legal observers long expected the case would ultimately land in the high court, but experts said Friday's ruling striking down the centerpiece of President Barack Obama's health care overhaul could finally force the justices to take the case.