CHICAGO - In continued wrangling over Detroit's $3.04 billion budget for fiscal 2009, Mayor Kwame Kilpatrick yesterday vetoed the City Council's plan to borrow up to $78 million of fiscal stabilization bonds to balance the spending plan - blaming the move for Moody's Investors Service's downgrade of the city last week.

Moody's last week cut the rating to Baa3 - the lowest investment-grade credit rating - from Baa2 on the city's unlimited-tax general obligation debt. It cut to Ba1 - junk bond status - from Baa3 the rating on the city's limited-tax debt.

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