The Washington Post is reporting that the Obama administration has rejected initial pleas from the State of California for U.S. Government aid. However, the post report reveals that Tim Geithner told California it must get its fiscal house in order, suggesting that aid would be forthcoming if it did so.
Doubt lingers as to whether Obama will come to California’s rescue. This can’t be good for the municipal bond market. And it also makes it clear that the U.S. Government is going to have to get its own house in order if it wants any credibility on the fiscal discipline score. Let’s see what that means in the weeks and months ahead.
Source
Calif. Aid Request Spurned By U.S. – Washington Post