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White House again nixes idea of financial help for California

June 16, 2009 | 12:19 pm

The White House reiterated today that it won't be offering special financial assistance to California to help ease the state's budget crisis.

Robert Gibbs, White House press secretary, was asked at his daily briefing if the Obama administration would consider providing emergency aid to California.

Gibbs said the federal government has already given an extraordinary level of aid to states in the form of the stimulus package that was signed into law in February.

Robertgibbs He added that other states are finding themselves in difficult straits -- a suggestion that extra aid to California could invite an avalanche of requests from other states pinched by the recession.

"We’ll continue to monitor the challenges that they have, but this budgetary problem unfortunately is one that they’re going to have to solve,’’ Gibbs said.

California Treasurer Bill Lockyer in May formally asked Treasury Secretary Timothy F. Geithner to provide a federal guarantee on potentially tens of billions of dollars of short-term notes the state is expected to sell beginning in July. A U.S. guarantee conceivably would allow the state to borrow at relatively low interest rates.

But Geithner rejected the request, at least for the time being, Lockyer's office has said.

Credit-rating firm Standard & Poor’s today warned that it may further downgrade the state’s rating, which at "A" already is the lowest among the states.

-- Peter Nicholas

Photo: White House Press Secretary Robert Gibbs. Credit: Pablo Martinez Monsivais / Associated Press

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