Facing what could be the largest cash flow problem in state history, California officials are asking the federal government to back billions of dollars in short-term loans the state must seek in July.Yay! Is this the lending that the President has been trying to get going again? I sure hope so. It sounds terrific!
"We're going to need cash-flow borrowing the likes of which California has never seen, at a time when market and economic forces are stacked against us," said Tom Dresslar, spokesman for state Treasurer Bill Lockyer. "That's a recipe for calamity."
A spokesman for the House Financial Services Committee, chaired by Rep. Barney Frank, D-Mass., confirmed that Lockyer had met with Frank in late March, and that Frank was in the process of drafting legislation designed to aid states and local governments with problems similar to California's.JACKPOT!
"There is something in the works," said spokesman Steve Adamske, "and that should be drafted by the end of this month ... there are several ideas being considered."
One idea is that buyers of RANs issued by states and local governments would be able to resell them to the federal government. The funds would come from the Troubled Assets Relief Program, or TARP, the $700 billion program that buys assets and equity stakes from financial institutions.