California officials scrambled Friday to scrape together a plan to keep the state solvent after the White House informed them that federal backing for emergency short-term loans is unlikely.
State Treasurer Bill Lockyer testified before the Legislature that he had been told by Washington not to expect the loan guarantees. The state’s senior U.S. senator, Dianne Feinstein, later said there was little chance of help.
The state is at the mercy of Wall Street for a multibillion-dollar loan necessary to get through the year. Lockyer had previously warned that it may not be able to obtain that much cash without federal help. Click here for the full story.