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Federal bill means billions for California

August 10, 2010 |  2:11 pm

President Obama said he will sign a $26-billion aid package for cash-poor states passed by the House of Representatives Tuesday -- a bill that could be worth more than $2.4 billion for California.

According to Department of Finance spokesman H.D. Palmer, the bill will save the state's general fund $1.28 billion in MediCal costs. Another $1.2 billion in federal funds would go to local school districts in California, but that money will not save the state's general fund any money,  Palmer said.

Schwarzenegger and Legislative Democrats were hoping to get $1.8 billion in MediCal assistance.

Federal aid is a linchpin of state budget plans put forth by Democrats and Republicans alike. Gov. Arnold Schwarzenegger is counting on more than $3.5 billion in federal aid to help balance the state's books. Democrats are hoping for even more largess from Washington. Their budget calls for more than $4 billion in federal assistance.

-- Anthony York in Sacramento