WASHINGTON — Obama administration officials expressed concerns Thursday about California’s request for federal intervention in its budget crisis, and the state’s congressional delegation is split on the issue.
California has asked the administration to provide guarantees for billions of dollars in emergency loans, saying the state will soon run out of cash without help from Washington, particularly after the failure Tuesday of five budget-related ballot measures.
But U.S. Treasury Secretary Timothy Geithner expressed doubt Thursday that he had the authority, without new legislation, to help the state under the program Congress set up to rescue financial institutions.
He told a congressional committee that the primary burden rests with governors and mayors to bring their deficits down. But he added that to turn around the economy, “There are things that we’ve had to do I would never have contemplated doing.”
It’s a “difficult, complicated balance,” he said.
Geithner pledged to work with Congress to explore ways to help California. But some Congressional Republicans, including some from California, opposed any federal role, posing a political challenge should the Obama administration decide to step in.
In an interview Thursday, David Axelrod, a senior adviser to President Barack Obama, voiced concerns that if the federal government provides special assistance to California, it could open the door to other struggling states.
