“That would have staved off the IOUs and would have resulted in some real savings for the state,” Smyth said.
“I share the frustration because it’s not as though we didn’t see this coming.”
As lawmakers search for answers, the federal government will probably not play a role in helping to keep the world’s eighth largest economy from going bankrupt, even though that may be one of the best options to protect residents from drastic cuts in government spending, Democratic Rep. Brad Sherman said.
He and other state officials have pushed President Obama and federal officials to back California loans and help keep the state from spiraling into insolvency, but the effort hasn’t gained much traction in Washington, Sherman said.
Federal representatives would likely not support another cash contribution to California, which has already received about $12 billion in stimulus funds, he said.
Still, the option of using the Troubled Asset Relief Program to back state loans and help California recover might be a worthy investment for the nation and one that Sherman said he planned to continue promoting.
“The fact is, from a stimulus standpoint, what you want is shovel-ready [projects],” he said.
“Well, not firing teachers, not firing cops — that is immediate, whereas some of the stimulus money is going to take years to spend.”
For now, legislators will need to focus on reaching an agreement soon, before the deficit grows further and threatens more state programs, state Sen. Carol Liu said.
“In the meantime, yes, the people suffer for the inability of us to ‘get our act together,’” Liu said. “We are trying to do so, but with not much success.”
ZAIN SHAUK covers education. He may be reached at (818) 637-3238 or by e-mail at zain.shauk@latimes.com.
