The White House on Tuesday dashed hopes that the federal government would help California overcome a mammoth budget crisis that has brought the state dangerously close to an economic meltdown, saying the state will have to solve the problem on its own.
“It’s obviously not an easy time for the state of California,” White House spokesman Robert Gibbs told a briefing when asked if the administration would provide emergency financing for the state.
“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’s revenues are plunging amid recession, rising unemployment and the prolonged housing crisis, and the state is unable to borrow its way out of its immediate financial trouble by issuing debt because of its budget gap.
It will run out of cash within weeks if it does not balance its books, according to State Controller John Chiang, who estimated last week California was “less than 50 days away from a meltdown of state government.”