White House Likely Won't Aid States With Budget Shortfalls

(RTTNews) - The White House Wednesday all but ruled out further assistance to California and several other states struggling to enact budgets for the upcoming fiscal year.

California, in particular, is facing a shortfall of tens of billions of dollars and lawmakers have raised the prospect of sending out IOUs to make some state payments.

Asked whether further aid might be forthcoming as the states enter the new fiscal year, White House Press Secretary emphasized that the federal government has already distributed roughly $144 billion in Medicaid and education funds to help states bridge their budget gaps.

"There are a number of states that find themselves at the end of the fiscal year and required to pass budgets. We're certainly watching," Gibbs said. "But I think the major contribution from the federal government has been an increase in Medicaid and education money to go to helping to close some of those fiscal gaps."

Gibbs also noted that California had applied to receive some of the funds available under the financial industry bailout, but had been told that it wasn't possible under the law.

"Understand, $144 billion represents a pretty large chunk of total state budget shortfall," he said. "It's not the whole thing, but I think it's an important step that we took, understanding that an economic recovery had to include individual state governments."

He added, "And we've certainly taken, I think, important steps to cushion as much as possible that blow."

But Gibbs did not flatly rule out another round of federal aid, saying the administration would continue to observe and see how the situation develops.

Gibbs also expressed pleasure at the certification of Al Franken's victory over now-former Sen. Norm Coleman in Minnesota, which gives Democrats 58 seats in the Senate. Along with two independents who almost always vote with Democrats, that theoretically gives Democrats a filibuster proof majority.

However, Gibbs rejected the assertion by Republican National Committee Michael Steele that the new majority means that it is solely up to Democrats to advance legislation in Congress.

"I hope the implication by Chairman Steele is not that addressing America's problems isn't the priority of all Americans that serve in government, it's not simply one party," Gibbs said. "This President is going to continue to pursue the policies that he believes are important to turn our economy around, to lay that foundation for long-term economic growth, to change our image throughout the world, and continue to reach out to Democrats and Republicans to make that agenda happen."

He added, "All of us, Democrat or Republican, have a unique responsibility serving in government in times like this to work as much as we can together to address and solve these problems. I don't think one party can simply say, okay, it's all yours."

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