States want their own federal financial bailout

[babylonsister]

So where and when will this end?


States want their own federal financial bailout

By Rob Hotakainen | McClatchy Newspapers


WASHINGTON — Led by California with a $28 billion hole in its budget, 41 states are in financial trouble, and many of their leaders are looking to Congress to bail them out.

State officials are hoping to join the ranks of the financial industry and auto manufacturers, who've found a sympathetic ear on Capitol Hill. They've found some key supporters: House Speaker Nancy Pelosi and other top Democrats are promoting aid to states as part of a broad stimulus package that could inject more than $300 billion into the ailing economy.

The idea is getting a strong bipartisan push from governors across the country, with California Republican Gov. Arnold Schwarzenegger and New York Democratic Gov. David Paterson among the chief proponents. Both are blaming Washington for their states' mounting troubles.

Testifying at a recent House of Representatives hearing, Paterson said that New York was "at the epicenter of a national emergency" after federal oversight bodies "utterly failed in their duty" to protect Americans' savings and the U.S. financial system. Speaking Wednesday before a Chamber of Commerce group in Fresno, Calif., Schwarzenegger said that "government is really at fault" and that Washington was obligated to "get us out of this mess."

One could argue that the federal government isn't in much better fiscal shape, with a $10.6 trillion debt that's been growing by nearly $4 billion a day for the past year. Unlike the states, however, Congress doesn't have to bother balancing its books.

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