The federal bill would have provided an extension of funds to states—largely to cover health care costs for the poor. California’s share would have amounted to nearly two billion dollars. Governor Schwarzenegger, along with legislative leaders has been counting on the money. Schwarzenegger and other Governors are actively pushing U.S. lawmakers to include the funds in a future bill. California Department of Finance spokesman H.D. Palmer says if the money isn’t restored, the consequences could be grim.
“That would mean, if in the unlikely event that Congress doesn’t adopt this extension, that would translate into the state having to find another one-point-nine billion dollars in additional budget reductions above and beyond the very difficult choices that are on the table right now before the legislature.”
California faces a 19-billion dollar budget gap. In his revised budget, Governor Schwarzenegger has proposed eliminating the state’s welfare program and other painful measures to bridge it.