(CNSNews.com) – House Speaker Nancy Pelosi told CNSNews.com that she is “uncertain” about whether the federal government should bailout California.
Pelosi said she hadn’t read California Gov. Arnold Schwarzenegger’s emergency request to the Treasury Department asking for $7 billion in federal loans, even though the letter had been forwarded to her office.
“I haven’t read it. It’s been delivered to my office. I haven’t made a statement yet,” Pelosi said Friday at the Capitol. The speaker added: “Let’s just take a look at the highly unusual request that was made. I do know that all the states do have tremendous needs, but I’m not going to comment on something I haven’t read yet.”
But House Ways and Means Committee Chairman Charles Rangel (D-N.Y.) told CNSNews.com that California wouldn’t be getting any money without going through Congress.
“There is no way that the federal government can give away taxpayer’s money without coming to the Congress,” he said. “No way.”
Rangel said that this was another example of Republican politicians begging for a bailout.
“It’s really difficult for me to understand (how) Republicans, who want to keep big government out of the private sector, find it so easy to ask us for $700 billion to get involved in the private sector and now comes California with a well-known Republican asking to be bailed out,” Rangel said.
Schwarzenegger asked the Treasury Department for a $7 billion bailout Thursday, according to The Los Angeles Times. The money is needed, the governor said, to avoid having to shut down state operations because the state fund is empty until sales and tax revenues can be collected.
Under normal circumstances, California would seek short-term loans from private banks, but due to the current credit freeze, no loans are available to the state. This lack of credit availability has forced California to seek federal help.
The request, meanwhile, was met with mixed reaction from others on Capitol Hill.
Rep. Ron Paul (R-Texas), a former GOP candidate for president, expressed contempt for the idea of bailing out a state.
“It’s insane, if we continue to do that,” Paul told CNSNews.com. “But that’s what’s going to happen. Everybody’s going to get bailed out. Everybody’s too big to fail.”
The congressman said that Schwarzenegger’s request was just the beginning – other states will follow.
“Would they let California go bankrupt? No way. Everybody’s going to get bailed out,” Paul said. “We’re on the verge of something very, very serious, a lot more serious than they think it is to have a credit crunch.”
Rep. Jim Moran (D-Va.), meanwhile, who agreed a California bailout would be “a dangerous precedent,” told CNSNews.com he didn’t think the Congress would take the issue up anytime soon.
“I don’t think Congress will take anything up until we know who our president is,” Moran said.