California May Need $7 Billion Federal Loan

California is running out of cash. The Los Angeles Times reports that Gov. Arnold Schwarzenegger sent a letter to Treasury Secretary Henry Paulson informing him that the state might need to borrow $7 billion to keep operating. Evan Halper, who co-authored the story, tells Renee Montagne that California routinely borrows money to even out its cash flow, but this time it's locked out of the credit market.

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