The economic downturn is widespread. It’s even having an effect in the world of Sarah Silverman.

The show’s executive producers — Silverman, Dan Sterling and Rob Schrab — have threatened to quit after the cable network told them the budget for their series would be slashed by more than 20%.

At the center of the holdup is the proposed budget for Season 3. Citing cuts imposed on the network by parent company MTV Networks, Comedy Central had proposed that the trio bring back the Writers Guild of America Award-nominated show at about $850,000 an episode, sources said, down from the $1.1 million an episode for the show’s second season.

In broadcast, single-camera comedies are produced for about $1.5 million-$2 million an episode, and the budget for any series normally climbs from year to year.

Concerned they won’t be able to maintain the integrity of the show at the discounted price, Silverman, on behalf of the three executive producers, informed the network late last week that they can’t proceed with a third season. The move reportedly sent shock waves through Comedy Central’s executive offices, with top brass jumping into action to find a budget compromise that would keep the flagship live-action series on the air.

As of Friday night, the situation remained at a standstill. Both sides continued their back-and-forth during the weekend.

A 20% budget cut would be hard for anyone to swallow, but times are tough across the country. Everyone is having to do more (or at least the same) with less manpower, and Hollywood is no different. Let’s hope that they can come to some resolution that both sides can live with.