ALBANY, N.Y. (AP) — An angry Gov. David Paterson said Tuesday night that the Legislature is failing its duty to New York because they aren't negotiating a fiscally sound plan to reduce a $3.2 billion deficit.

The Democrat says he will keep lawmakers in the Democrat-led Legislature until they come up with a plan that includes politically dicey cuts to programs protected by Albany's most powerful lobbies in education and health care.

"I don't know how people are walking around here saying we are close to a deal," Paterson said after the third closed-door negotiating session. "I don't know people think they are leaving here and I don't know why it is so difficult to understand we have a fiduciary responsibility to the state of New York ... and the only way to reduce this deficit are real, recurring cuts."

He threatened to draw up a contingency plans to be able to pay the December bills if the Legislature doesn't agree to cut programs including school aid and health care. Paterson said his plan could include worker furloughs to cut costs.

He had a message to lawmakers who had hoped to go home Tuesday: "Stop making plans because I'm making the plans. And the plans is we're going to keep working until we get this done."

Moments before, Senate Conference Leader John Sampson of Brooklyn was optimistic a deal could be struck in time for action as early as Wednesday. He said the Senate won't "commit government malpractice ... we need to get it done."

Even Senate Republican leader Dean Skelos described the session as "positive discussions" and Assembly GOP leader Brian Kolb called the talks "serious and deliberate."

After an earlier negotiating session, lawmakers and Paterson said they may settle for less than the $3.2 billion in spending cuts and new revenue to address the deficit.

Paterson said he could agree to less than a $3.2 billion fix, as long as 40 percent of it was in recurring spending cuts, rather than one-shot sweeps of agency surpluses and other stopgap measures.

Silver also said the deficit reduction plan could be negotiated over stages, as revenues start growing again with the economy. Even if the result is "one deficit, one plan" as Paterson seeks, talks could continue for days.

It's the kind of inaction in the face of opposition by powerful education and health care lobbies that has brought criticism on Albany's leaders for months.

On Wednesday, daily newspapers in Buffalo, Rochester, Syracuse, Watertown, Binghamton, Ithaca, Elmira and Poughkeepsie have coordinated a rare editorial blitz. In separate editorials, they will blast Albany for inaction in the face of a fiscal crisis that is hurting New Yorkers with rising taxes and reduced services as they suffer through a recession.

Paterson had first suggested a special session in September to address the deficit he says continues to deepen as tax revenues fall short of spending. That session never happened. Last week's extraordinary session didn't have an agreement to vote and Tuesday passed without a deal that could be voted on.

Paterson said that if the deficit isn't resolved, the Legislature will be forcing a deficit in the spring that could grow to $9 billion for the 2010-11 fiscal year, forcing even more politically difficult cuts in an election year.