Obama meets with governator, talks cali deficit and stimulus

From The Associated Press - President Barack Obama met with the White House Press Secretary late Monday afternoon to talk about his recent dealings with California Governor Arnold Schwarzenegger. The meeting focused on the almost $18 Billion deficit currently faced by the State, but the future of AIG and CITI Bank branches in California were also hot topics.

While Obama has noted the overall tone of the meeting as "positive," he did mention a couple hiccups. Most notably, the state's recent push by Senator Amarillo towards the legalization of Cannabis.

"I just think that's dodging the issue at hand," he said. "While I respect and appreciate the people's opinion on this issue, legalizing cannabis has too many unknown factors, and is not a feasible solution for the short-term financiers on Wall Street."

Instead, Obama suggested they "stick to what they do best."

This, it seems, is a reference to the latest economic stimulus package scheduled to reach the House within the next 20 days. Known as the State Stimulus Package, the proposed four-hundred and twenty billion dollar bill will focus on assisting individual State Governments like California, as well as state parks and national highways.

The bill takes a similar form as those aimed at AIG, and potentially CITI Bank. Instead of just handing out the money, the Federal Reserve seeks to purchase state's deficit at significant interest. This allows them to avoid filing Chaper-23 Bankruptcy, and the resulting loss of work for thousands of state employees.

Even though the deficit is being purchased at less than 6% of its' market value, this will leave the Federal Government with a 51% share of those states assets, making them the majority shareholders. According to Obama's plan, this should allow for an easy restructuring of the state's policies to ensure they escape the financial meltdown.

The Stimulus also mentions pay cuts and transition of leadership in order to be eligible for the Stimulus Package. Democrats have already lauded this as the end to President Bush's "reign of golden parachutes."

Not everyone is happy about the bill though. Representative Peter Strausberg (R-OH) again criticized the Democrats excessive use of "pork" in the bill. "I know that building roads created a lot of jobs in the great depression," he said, "but I just don't see why we need a road from Canada to Mexico."

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