US Turns Down California's Requests For Aid

[babylonsister]

Calif. Aid Request Spurned By U.S.
Officials Push State To Repair Budget

By David Cho, Brady Dennis and Karl Vick
Washington Post Staff Writers
Tuesday, June 16, 2009


The Obama administration has turned back pleas for emergency aid from one of the biggest remaining threats to the economy -- the state of California.

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 federal officials are worried that a bailout of California would set off a cascade of demands from other states.

With an economy larger than Canada's or Brazil's, the state is too big to fail, California officials urge.

"This matters for the U.S., not just for California," said U.S. Rep. Zoe Lofgren, who chairs the state's Democratic congressional delegation. "I can't speak for the president, but when you've got the 8th biggest economy in the world sitting as one of your 50 states, it's hard to see how the country recovers if that state does not."

The administration is worried that California will enact massive cuts to close its deficit, estimated at $24 billion for the fiscal year that begins July 1, 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.

more...

http://www.washingtonpost.com/wp-dyn/content/article/2009/06/15/AR2009061503249.html?wprss=rss_politics

[Raster]

1. I guess California will need to put on a "Goldman Sachs" t-shirt to get Geithner's attention.

[napi21]

2. I don't know Tim's reasons, but I would hesitate to bail them out too.

If he opens THAT door, I can see several other states asking for the same thing. Michigan for one!

[blue_onyx]

9. Exactly

They can't really help one state deal with its budget without helping all states.

[ContinentalOp]

32. Uh, we SHOULD help all of the states in need.

Oh wait, they're not corporations so fuck em.

[blue_onyx]

35. We have helped all states

All states have received stimulus money to help deal with the recession. I was referring to helping states balance their budget which should be the responsibility of the state. Michigan has been in recession for eight years and has lost more than 500,000 jobs (with 100,000 more expected to be lost in 2009). We received no assistance to help deal with the job loss or budget issues. We've had to cut spending and increase tax/fees to balance the budget. In order to pass the 2007 budget, our state was forced into a shut down (although for only a few hours).

If Obama decides he wants to help ALL states deal with unbalanced budgets, that's fine. Helping only California, however, would be ridiculous.

[Statistical]

50. Wait the money to help the states would have to come from the citizens of the US

who live in the United States.

It is like saying I should give my right pocket $10 from my left pocket.

States raise taxes to cover shortfall.

OR

Federal govt bails out states and then fed govt raises taxes to cover the cost.

Just like physics you can't get something from nothing.

[TiredOldMan]

3. Made Our Own Bed

I live in CA. We made our own bed with ridiculous overspending for years and now we have to deal with it. If they bail out one state then they would have to bail out every state and we just can't afford that in these terrible times.

[MUAD_DIB]

13. CA could always just raise its taxes.

Massachusetts is working on doing just that, and we're not in nearly the bind that California is.

[moondust]

40. Hey, nice idea!

Set up a referendum on paying higher taxes and poof...!! Let "The People" decide!!

:rofl:

[MUAD_DIB]

45. Well, either that or they are phucked. No joke.

[Garbo 2004]

17. "Ridiculous overspending" on what? Why does no one cite billions in corporate tax breaks that

reduced revenue over the last 10-15 years?

So it makes sense to cut programs that also loses the fed funding that comes with them, cut a program that put welfare recipients to work, or a program that provides in home assistance for disabled and elderly but the poor oil companies need their tax breaks.

[nichomachus]

19. It wasn't "overspending"

it was "undertaxing." Starting with the ridiculous Jarvis amendment decades ago, Californians tied the hands of their legislators and other public officials to raise the revenue needed. Come on -- the cost of gas has gone up something like 300 percent since the Jarvis amendment. The cities and towns, as well as the state, have to increase their revenue to pay for that. The cost of energy is out of site, but officials can't raise the revenue needed to cover it.

It's an idiotic system -- but it was designed to do exactly what it's doing -- destroy the state government.

The US can't bail out CA, because CA is just the canary in the coal mine. We started down this path first. The other states aren't far behind. If the feds bail out CA, they will have to bail out every other state. They can't do that.

This is all part of a plan on the part of the corporatists and it is succeeding beyond their wildest dreams.

[SammyWinstonJack]

22. Go ahead and let a state that has the 8th ranking economy in the World, fail.

That makes a lot of sense, doesn't it? :eyes:

ridiculous overspending

No worries there, Gov. Musclehead will take care of that problem and who will suffer the most from it? Hint: it won't be the greedy corporations nor the wealthy Californians.

[Mari333]

4. Michigan is using gravel to cover their secondary paved roads now

rather then repaving them. costs 10000 to use gravel, 100,000 to pave.
we are used to being the worst state in the union now.

[MUAD_DIB]

14. How fast can you go on a gravel road compared to blacktop?

[Mari333]

16. in my experience a lot slower

[Dappleganger]

5. Unless they had a natural disaster

I say fuck 'em.

To the poor and middle class stuck in that state, I am truly sorry that your leaders hate you so much.

[Statistical]

6. Good.

[slackmaster]

7. You don't give booze to an alcoholic who is at a crisis point that might lead to recovery

Good for the feds.

[Tesha]

8. They've been passing anti-tax propsitions for thirty years and now they want...

Uncle Sugar to come and rescue their Republican-lead
asses?

Guess again!

Tesha

[slackmaster]

10. No, we've been struggling for 30 years to try to get our legislature under control

Please do not send any money to California.

[TiredOldMan]

12. CA Not Republican

Do you know anything about us here in CA? We have a Rethug Governor, but our legislature that writes the budget has been strongly progressive for decades. Unfortunately they weren't very good at math though!! Now we have to deal with the consequences.

[Garbo 2004]

18. And it's a Leg that likes increasing tax breaks for corporations, which reduces revenue.

That's the other side that doesn't get much scrutiny.

[Tesha]

24. You seem to be confusing Bay Area politics with statewide politics.

Statewide, you elected Ronald Reagan, George Dukmajean
(sp?), removed the Democrat Gray Davis, and elected Ahnuld
Schwartzenegger. And didn't your voters just cause some little
bru-ha-ha over gay rights?

Yeah, you're Democrats like Joe Lieberman is a Democrat.

Tesha

[Xithras]

25. California has always been a bit schizophrenic when it comes to elections.

The voters have elected a progressive majority, but won't permit that progressive majority to grow large enough to overcome the voting requirements that the voters themselves implemented. We like to think of our government as "liberal", but we've only elected three Democrats to the governors office in the past 50 years (and we threw one of them back out). We like to vote for progressive things, but we get angry when we're actually expected to pay for them.

The problem with California isn't the government, it's the voters who put them there. Our democracy in this state is a reflection of the electorates voting habits, which is neither liberal OR conservative...it's simply confused.

It's going to be painful, and extremely so for some of us, but California needs this wakeup call.

[madrchsod]

11. "....there is no hope,no reasoning,this rainy day in june..."

we elected a man because he told us he had a vision of america where people would be as one. yet those who have the least will suffer the most. those who have no voice will not be heard.

we are bankrupt in mind and spirit and when we need leadership there is none. now it is up to us to demand that everyone in america has a voice.

[closeupready]

15. They should hire Hank Paulson to consult on how to get from Point A to Point B.

n/t

[Vidar]

20. Obama has already done his best to destroy Michigan. California is next on his hit list.

[babylonsister]

23. You have got to be kidding me. You're blaming the destruction

of Michigan on Obama? What don't you blame him for? :eyes:

[Cha]

28. You can just sit there in your chair and say whatever

you want..back it up with some links and facts.

[babylonsister]

29. That won't happen. This is a classic hit and run. nt

[Cha]

34. That's why I restrained myself

to ask politely and render the poster's "hit and run" invalid if it can't come up with the facts.

[ContinentalOp]

31. He didn't cause this but it sure doesn't look like he's interested in helping either.

Never mind the fact that Californians bankrolled a huge chunk of his campaign. We're just a state. A bunch of individual citizens. We should have become a corporation and then maybe we'd get some attention.

[RoadRage]

21. Fantastic!

I'm sorry.. but i'm sick of watching everyone who doesn't want to solve thier own money problems go crawling to the federal government for a hand out. We can't AFFORD to hand out money to every state that isn't doing well. Michigan is in trouble too - do we bail them out?

California spends money like drunken sailors... perhaps this will force them to enact their own laws to limit spending on neccesities.

The Federal Government should be there to help them when the next Earthquake hits.. the next flood or mudslide.. the next huge fire. That's it.

[Xolodno]

26. I say...

...good for the Fed. Let the cuts happen and let people realize that all those services don't come free. If they want them then they will push for tax to pay for them. If the budget really does have a lot of pork, then is should be cut anyway. Who knows, maybe the county and city governments will take more control and those that want the extra services will be willing to pay for them at the local level. Or perhaps, there will be so much outrage after the cuts they can finally start over on the state constitution. Who knows, maybe some good will come out of this...too bad it may be painful first.

[SidneyCarton]

27. Until the structural problems in our state government are solved...

(2/3 rule for budgets, prop 13, etc...) a federal bailout will not fix anything, all it will do is buy us more time, and we're already on borrowed time as it is. I wish we'd get a bailout, I might keep my job (I work for the UC which is looking at an across the board 15% cut in staff) but until we fix the problem at the core of our state, sending us more money merely justifies the perpetuation of the same old abuses by our leadership. We chose this state government, we got the government we deserved.

[ContinentalOp]

30. Is there any doubt left that Californians are the most powerless citizens of the US?

Our vote counts less than everybody else's. We have proportionately less representation in Congress. We help subsidize all of the red states with our federal tax dollars. We were the biggest funders of Obama's campaign and yet get nothing in return. We have no voice in the primaries. We have a governor that was installed in a shady Bush-styled coup. Businesses from other states can defraud us out of tens of billions of dollars with no repercussions. Yes, fuck us indeed.

All you Republican apologists on this thread are absolutely sickening.

[SammyWinstonJack]

33. "All you Republican apologist on this thread are absolutely sickening."

:applause:

[taught_me_patience]

37. "We were the biggest funders of Obama's campaign and yet get nothing in return"

so true. :mad:

[Lance_Boyle]

42. What did you want, Roland? A Senate seat? n/t

[Jack_DeLeon]

43. Yall have plenty of representation...

you are losing some though because the census says people are leaving your state, unfortunately those people are trying to take over the states they move too.

[depakid]

48. Nope- but unfortunately, it's a structural problem (and requires a structural solution)

As to the asshole Republican apologists- well, you'll be feeling the repercussions of this too as it roils through the economy, but like most stupid Americans who can't see beyond the ends of your sorry noses, you won't realize it or care until something affects you or yours personally.

[Starry Messenger]

54. Thank you.

I'm about to put my fist through my screen. Several states are going to collapse after us in the wake of this and "fuck California"? Enron hit us like a natural disaster less than 10 years ago. :grr:

[taught_me_patience]

36. The vitriol against California on this thread is amazing

considering California is a fairly progressive state. If we raise taxes any more here... it's going to have seriously negative political consequences. We are already taxed to our eyeballs and cannot afford any more. An increase in taxes, that clearly goes against the will of the people will drive the democrats out of the majority permanently. The only other option is to cut services. Are DUer's suggesting that California cut services to the poor?... how progressive. :sarcasm:

[ProgressIn2008]

39. Yes, I'm taken aback by "progressives" saying good, fantastic, fuck em

Is that who we are? Maybe so.

[blue_onyx]

41. Should we help all states balance their budgets?

[Statistical]

49. If your taxes are higher than anyone you should have plenty of revenue.

So yes it is that simple. Raise taxes or cut spending.

Or more likely do both.

Hasn't CA spending increased 30% in last 5 years? Going back to a mere 2003 level of spending would reduce most of the budget gap.


If US bails out CA then shouldn't other states simply overspend? Then they can get bailed out.

CA has enough money to try and implement a new CA only "fuel economy" standard for tires.
CA has enough money they spent $8 million dollars on a gun buyback (most useless form of reducing gun violence) last month.
CA has enough money for $10B in stem cell research.

CA seems to have enough money to do everything except pay for it all.

The voters need to accept reality and like giving a junkie another fix they never will if someone hands them more money.

So YES 4 choices
1) cut spending
2) raise revenue
3) do both
4) file bankruptcy

[Name removed]

56. Deleted message

Message removed by moderator. Click here to review the message board rules.

[Tesha]

52. You (as a state) recently proved *ONCE AGAIN* that you are anything *BUT* progressive.

Prop 13, Reagan, Duk, ejecting Davis, Schwartzenegger, anti-gay-marriage I and II...

[TomCADem]

38. California's Crisis Was, And Still Is, Self-Made - Can Easily Be Solved

...By the Legislature simply agreeing to a solution. Yes, there is a two third voting requirement, but that is also self-made, and the crisis is really political. California has not passed a budget on time in over 20 years. I am a Californian, but I don't see a federal bailout as the solution, because California can solve its problem at any time, if the Legislature decides to act.

[XemaSab]

44. Depending on how it's calculated, California has the 6th to the 20th

highest tax rate in the country.

Arguing that we're not taxed enough is not accurate.

[marketcrazy1]

47. the government WILL step in to help

count on it! with debt guaranties or low interest loans of some kind. California WILL get help ( some kind of bailout )............... and it will happen soon.

[TomCADem]

53. Our Republican Party Will Pull A Mark Sanford...

...and demand that it be used for debt relief, while the Governor continues with his war on the poor.

This is California where voters rule!

Voters adopted Proposition 8.
Voters imposed the 2/3 requirement.
Voters adopted Prop 13.
Voters mandated education spending with Prop 92.

Yes, with the mighty ballot proposition, we have locked in spending increases and tax cuts, term limits AND a super majority requirement. Thus, we have created a Legislature with no accountability whatsoever. Republicans just sign their no new tax pledge, then phone it in for the rest of their short terms. Yes, you have to love revolving door legislatures who have no skin in the game if the State falls apart.

California is the best example in the nation of a Direct Democracy and what happens when major, but arcane, policy decisions are decided at the ballot box in special elections decided by a small minority of the electorate.

Do I feel empowered yet? Perhaps I just need to vote again this week!

[KamaAina]

46. California is our largest single tourism market

if they go down, we go with them. Also a relatively small number of people leaving the largest state would translate into a huge influx, relatively speaking, to an island state that is already overbuilt in spots (as well as other Western states such as Oregon, home to the word "Californication"). Already O'ahu is kind of like the "59th county", complete with traffic, high rises, suburban sprawl, Jack In The Box, etc., with Maui bidding fair to become the 60th.

[tammywammy]

51. Good for the feds n/t

[NMMNG]

55. All you people shitting on CA

How many of you are from states that get back far more from the Federal Government than they put in, compared to CA which gets back far less?

State/
Federal Spending per
Dollar of Federal Taxes /Rank


New Mexico $2.03 1
Mississippi $2.02 2
Alaska $1.84 3
Louisiana $1.78 4
West Virginia $1.76 5
North Dakota $1.68 6
Alabama $1.66 7
South Dakota $1.53 8
Kentucky $1.51 9
Virginia $1.51 10
...
New York $0.79 42
California $0.78 43
Delaware $0.77 44
Illinois $0.75 45
....
Federal Spending in Each State Per Dollar of Federal Taxes
FY 2005
Source: Tax Foundation, Census Bureau

Now tell us again how we don't deserve anything and we should all suffer.

[MadHound]

57. I'm all for bailing out California, one condition though

Prop. 13 is gone, out of the law books, history. That one statute removed the major instrument that provided revenue stability to California, and thus precipitated this whole mess.

Get rid of that one law so that we don't have to be bailing California out again in another couple of decades.