June 16, 2009

U.S. refuses California emergency financial assistance

The Obama administration has refused requests for emergency assistance from senior State government officials. Calling California, “one of the biggest remaining threats to the economy” the Washington Post reported that top state officials have gone hat in hand to the administration, armed with dire warnings of a fast-approaching “fiscal meltdown” caused by a budget shortfall. Concern has grown inside the White House in recent weeks as California’s fiscal condition has worsened, leading to high-level administration meetings. But the Post reported that federal officials are worried that a bailout of California would set off a cascade of demands from other states. The administration is also concerned that California will enact massive cuts to close its deficit aggravating the state’s recession and further dragging down the national economy. After a series of meetings, Treasury Secretary Timothy F. Geithner, top White House economists Lawrence Summers and Christina Romer, and other senior officials have decided that California could hold on a little longer and should get its budget in order rather than rely on a federal bailout.

Filed under California Economy, California Government, California Politics, U.S. Government by

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