Schwarzenegger: Federal aid to state is no bailout

Sacramento BeeDecember 4, 2008 

Gov. Arnold Schwarzenegger doesn't think you should call potential federal aid to California a bailout, handout or any other kind of out.

He prefers the term "investment."

The Republican governor emphasizes there is a distinction between the type of money he desires – public works money for California construction projects, as well as higher Medi-Cal reimbursements – and the type of direct budget aid that Assembly Speaker Karen Bass has suggested.

He sees his public works request as a $26 billion New Deal-type infusion into projects that create jobs and bolster the economy, not as a budget solution. He says his Medi-Cal request is a matter of fairness because California sends more money to Washington than it receives.

Schwarzenegger has philosophical reasons for balancing his request for federal money with his insistence that he is not asking Washington to rescue California from its budget failures. He does not believe the state should use one-time stimulus money to solve its structural budget problem.

He also has strategic reasons. He does not want legislative leaders to think they can use federal money to avoid tough decisions on spending cuts or new taxes, especially when there is no guarantee that money would ever come.

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