Schwarzenegger Optimistic State Can Secure Loans

By: AP
By: AP

Gov. Arnold Schwarzenegger tells Treasury Secretary Henry Paulson that he's optimistic that California will be able to secure $4 billion in short-term loans to keep the state running.

Schwarzenegger wrote a letter to Paulson on Thursday with an update of California's fiscal situation. Last week, the governor asked the federal government to protect California if the state was unable to secure loans in the private market.

Since then, Congress has passed a $700 billion Wall Street bailout package and the Federal Reserve cut interest rates to improve credit.

Schwarzenegger writes that he's encouraged by news from other states, such as Massachusetts, which was able to secure $750 million in short-term notes Wednesday.

Paulson has not yet responded to Schwarzenegger's request.

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