As the battle over pension reform in cash-starved cities and states intensified, the Mayor of New York City fired another salvo by threatening municipal unions with huge layoffs if they don’t cooperate with his sweeping proposals to overhaul the system.

Michael Bloomberg, whose city faces a $2.4-billion budget deficit, is seeking to wrest control of pension contracts away from the state and work to reduce pension payments which he complains are overly generous.

If we don't have major reform, we're going to have a much smaller work force, he said.

If we cannot get the things that are going to save us money, then we're going to have to lay off people. The days of kicking the can down the road, I think, really are over. They're over in most states and most cities.

When asked how many public workers he might have to fire, Bloomberg replied: Take a look at what the cost is for the average employee and cut the budget by, let's say $1 billion, that's 10,000 people.

Then he softened his ominous statement by adding: We don't necessarily have to cut our budget by $1 billion. We may be able to find other revenue sources or find ways to do things with less.

New York Governor Andrew Cuomo, who is also mulling thousands of state job cuts to reduce the state’s $10to $11-billion budget shortfall; has promised to work with the Mayor on the pension issue.